Property Management Platform 15 mins read

What is a Property Management System (PMS)? [+recommendations]

By May 1, 2022 June 20th, 2022 No Comments
What is property management system (PMS)?

The stress of managing businesses using old-fashioned paper-based methods to coordinate basic operational functions is long gone. Today technology helps businesses function efficiently, and in the vacation-rental side of things, we can thank property management systems that automate most of our tasks, and make our life as owners and managers much easier. 

Today we aim to give you all the information you need to make the best decision for your business.

What is a Property Management System?

A Property Management System or a PMS is a suite of tools that work together to help vacation rental owners manage bookings, communication, and payment processing across all rental platforms. A Property Management System has many names including Property Management Software or Platform, Vacation Rental Software, or Hotel Management Software/ Hotel PMS and is used in the hospitality industry (it can also be used in the real estate, commercial & residential rental industries as well.) 

In our industry, this technology helps vacation rental managers keep everything in check and make a stay even more enjoyable for guests. Larger properties also use this type of accommodation software, but theirs tends to be more specifically hotel property management systems rather than vacation rental management software. 

A Property Management Software is a central system that orchestrates, schedules, and performs day-to-day functions that can be automated and completed by technology. These systems also make record keeping very easy and efficient. PMS platforms are also highly customizable for whatever features a client may need. They nearly eliminate the need for paper processes and even spreadsheet processes that are cumbersome and time consuming.

Success in the evolving vacation rental industry depends on the organization, guest communication, and analytics. Many PMSs, like Hostfully’s award-winning suite, are affordable, user-friendly, and help vacation homeowners stay in control of their rentals. And PMS isn’t just for large rental companies anymore. Now, small multi-rental independent owners are also reaping the benefits of innovative PMS platforms!

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The challenges of managing multiple vacation properties

Owning vacation rentals can be a highly profitable investment venture, but that is not to say that it’s easy. The more units you have, the more difficult it gets, especially if they are not all located in the same place and if you are managing remotely. They come with a unique set of challenges, such as:

Multiple properties means more operations management

When growing your portfolio, you have to devote more time to keep track of what’s happening at each location. You have to make sure your team is handling their tasks properly, ensure that the units are cleaned after check-out and before the next check-in, and that maintenance and repair work gets done.

When managing multiple locations, sometimes your team may mix up check-in instructions, sending the guest to a different property. These might seem like little mistakes, but they happen and a simple error like this can jeopardize your business’ reputation with negative reviews. 

More maintenance issues

Maintaining consistent quality is difficult when you have many properties to manage, especially if you’re doing it remotely and don’t get to see much of what’s going on inside your property. It’s a fact that all of your guests won’t have the same respect for your space, meaning there will be a broken item or two for your team to fix from time to time. An efficient system is required to make sure these things are kept track of and taken care of, and that’s where a PMS comes in. 

Keeping up cleaning standards

Multiple properties means lots of cleaning between check-outs and check-ins and also mid-stay cleaning. You probably will hire multiple cleaners to handle the different locations and give them the booking details and special requests made by the guest so the unit can be ready for the check-in. If booking information changes, then you need to update the right cleaner at the right time, or re-arrange cleaners if one is not available anymore. A PMS will help you automate and assign these tasks and updates. 

Accurate reporting

Preparing reports for each property increases your understanding of your performance. Doing this for each of your properties at the end of each month is time consuming and many mistakes can happen. Automating this, you’ll be able to generate reports with a few clicks, analyze for trends your eyes will not catch, and improve your performance. 

Staff management

Hiring a team to help you run your business becomes essential the bigger you get. However, you can’t hire someone and just leave it to them to figure it out. You’ll need to manage every single section of the operations they’re responsible for, and a PMS does this. 

Keeping track of all your bookings

One of the major requirements of managing multiple vacation rentals is to have a clear visual overview of all the bookings from your different properties. Who booked? When are they arriving? For how long will they stay? From which channel did the booking occur? At what rate? Any special requirements? Who’s handling the check-in? Using a PMS will help you centralize all your bookings into one calendar with all the necessary details you need to be efficient. 

Optimizing your listings

When you are using various channels to get bookings, making changes to the content, photos and pricing for each listing across multiple platforms gets so hectic. Imagine logging in and out, updating the wrong listing, and just not having enough time to sit down and do these. With a PMS, you can integrate with all these channels and with one click, adjust all the listings. 

Pricing is another thing. Doing research about your listing vs similar competitors, the market, seasonal changes, etc. gets more and more difficult as you add to your portfolio. Dynamic pricing tools adjust these automatically daily using big data, saving you lots of time and missed out opportunities for profit. Price optimization is one of the big benefits of using PMS software.

It’s very clear that a PMS will solve a lot of problems. 

 

Benefits of using a PMS

The purpose of Vacation Rental Software is to streamline your day-to-day operations. A good PMS should help you achieve the following:

  • Have better control over your business: Using technology to automate your tasks gives you better control over your operations.
  • Improved guest experience: Your customers expect a smooth booking process, and easy communication all the way from check-in to check-out. A good PMS will help you with that by automating everything that’s relevant to the process.
  • Contactless service: Now more than ever, there is a need for contactless service. With PMS solutions, you’re able to automate check-in and check-out without ever needing to be present in the property during the guest’s stay.
  • Automated systems: Automating recurring tasks saves you a lot of time and creates efficiency. These tasks include paying bills, receiving payments, employee maintenance, property maintenance, maintenance management, communication and more.
  • Proper data collection & analysis: This saves you a lot of time away from spreadsheets and minimizes mistakes. With proper analysis, you will be able to measure occupancy rates, earnings, predict customer behavior & team productivity. You’ll also be able to collect guest data to be able to better market yourself.
  • Enhanced employee productivity: The use of a PMS to manage your business will help you keep an eye on and monitor the tasks handled by your team and monitor their productivity. This in turn will help to optimize everyone’s task load and together improve efficiency.
  • High efficiency and time saved: This is a no-brainer! You’ll also be able to use your PMS on your desktop and even on the go via mobile app.
  • Greater revenue: Another no-brainer. Everything the PMS handles comes together nicely in the form of more revenue for you and your team. This also means you’ll be able to start scaling better, add to your portfolio, and spend less and less time managing daily tasks.

 Although a PMS is a powerful tool, it’s not right for every vacation rental owner. While PMSs are relatively cheap, they’re still an expense. So those who manage a single property and only plans to rent the home occasionally can get away without it.

Connect to your favorite tools for more functions

Powerful PMSs allow you to connect to some of your favorite tools to increase the functionality of your PMS. For example, most PMS will offer a channel manager that will seamlessly integrate with multiple distribution channels like Airbnb, Booking.com, VRBO, TripAdvisor, Agoda, and HomeAway, allowing you to simultaneously make changes to these listings. They will then show all bookings in one central calendar, eliminating potential double bookings. Some PMS also allow you to create your own direct bookings website, which means you don’t spend much money on commissions to other OTAs.

Once you’re connected across multiple platforms, it is also helpful to connect dynamic pricing solutions. PMSs usually allow for this as well via tools such as Pricelabs, DPGO & Wheelhouse, meaning bookings will come through at prices optimized for the night. These automation tools help adjust your prices daily based on big data, saving you the hassle of time-consuming research.

In the age of contact free check-ins, software solutions such as a PMS also makes it possible to do keyless entry via tools such as Remote Lock that help your guests access your property with unique codes. Then a PMS can also connect to smart home systems such as Noiseaware that help you monitor noise levels in your unit, to ensure guests are following rules. 

There are many integrations that not only help make your life as a host that much easier, but also level up the guest experience.

4 basic things to look for in a good PMS

If you’re like most vacation homeowners, you want to increase your ROI and decrease the amount of time you spend handling details. Of course, you can do this with PMS, but there are a few basic things to look for, and you will find these functions offered by PMS on the lower price range of the scale. More advanced features like full reservation systems are possible, at higher costs. But let’s start with the basic:

1. The PMS lists your property simultaneously across various platforms

Listing your home on multiple sites helps increase your reach and maximizes the number of people who see your home. But with so many different platforms, it gets overwhelming to list yours on all of them. The flipside (not listing on platforms) means you might miss potential income. 

Updating the photos, listing descriptions, calendars, and rates across various platforms can be highly time-consuming. Add interacting with guests, and something difficult quickly becomes impossible! Innovative property management systems will allow you to manage your listings across all platforms without logging in and out of multiple sites. This feature is called a channel manager.

2. All your bookings must be visible in one central calendar

When guests can book across different platforms, your chances of a double booking increase. For guests, there is nothing more frustrating than trying to book a home that looks available only to find out that the owner has not updated the calendar. Some platforms may even penalize you if you cancel bookings without a valid reason.

Good PMSs should also adjust room availability on other platforms once an online reservation comes through. This reduces the likelihood of overbookings! It should also give you easy access to one central calendar that shows bookings from any platform. This will help you see your home’s availability in one place, making it easier to coordinate cleaning and maintenance.

3. Messaging guests is handled by the PMS across any listing platform

One of the main reasons guests book vacation rentals is because they want an authentic and personal experience. On top of that, guest engagement is now critical across all industries. Homeowners who are trying to juggle messages, emails, and alerts across multiple platforms can’t give the guests the interaction they’re looking for.

An effective property management software system will give homeowners a central space to communicate with guests. This is typically referred to as a unified inbox. It will notify them of any activity across the platforms they are working on, and allow them to easily and quickly address guest questions or concerns. It must also include event-based triggers. This allows guests to get the information they need at check in without the owner being involved.

4. Your income statements should be one click away

Owners who want to generate substantial income from their properties must treat their vacation rental as a business. Any successful business must keep track of income.

Basic PMSs will help you stay on top of payments by the platforms. They’ll also allow you to charge extra for cleaning fees and late checkout, as well as put a hold on security deposits.

9 advanced features great vacation property software should also offer

Most PMS on the market will cover the features listed above. However, for busy homeowners that want to make managing their rentals even easier, Hostfully offers property management software with game-changing features such as:

  1. Reservation system

    A reservation system is a software that allows you to digitize the full reservation process all the way from reservation taking to payment processing. No more tiny errors that cause huge losses.

  2. Customer data management

    To grow your business and be sure you are making sound decisions for your rental business, keeping track of customer data will allow you to create guest profiles and also predict customer behavior. With all this data, you can make better decisions for your customers and business.

  3. Analytics and reporting

    Accurately analyzing data can also help you determine trends from similar businesses, track your successes, and even understand the risks involved in your business. Spending quality time analyzing and reporting out your data to interested parties will only benefit your business.

  4. Property data management

    A quality PMS system will provide you with easy-to-understand data that will lead to actionable results. They may even make recommendations as to what to do with your data.

  5. Payment processing

    Another advanced feature is that of a point of sale (POS) system. Some PMS platforms accept payments from your customers and even keep track of sales you have completed.

  6. Upselling platform

    When you upsell, you give your renters an option to upgrade their rental. Some PMS systems provide these options to your potential guests. This may help you increase your profit. These upsells may include late checkout or extra cleanings, among others.

  7. Automated messaging

    Communicating with guests is absolutely essential. However, it can also be time-consuming. Therefore, some PMS have automated systems in one place to make it easier to communicate with your guests.

  8. Integration

    As we mentioned earlier, many PMS platforms allow for integration. However, not all do. So, if integrating with your favorite tools is important to you, make sure your PMS allows for it.

Are vacation rental PMS platforms expensive?

One concern new vacation rental owners have when learning how to manage multiple vacation rentals is the price of property management software. Many homeowners are surprised to learn that basic property management packages cost under $60 a month, which covers up to five properties!

After that threshold, property management software systems usually increase in price, but they also offer more features. Most property owners who book more than one week a month will easily make their money back.

 

Other things to consider when purchasing a PMS

Obviously, features and cost matter, but so does quality support, easy integration, migration, and transparency. When looking over reviews for various PMS platforms, pay attention to the reviews made by other vacation rental owners. What do they have to say about the support and customer service available? Do rental owners feel like they get support? 

If you care a great deal about your third-party apps, do they seamlessly integrate, or is the connection clunky? Make sure the PMS tool will make your life easier, not harder. In much the same way, will it be a platform that helps you honestly, or does the platform seem a little unreliable? Is there dedicated customer support that will help you with any issues that arise? There are many quality PMSs out there and teams behind them, and they vary in quality. Be sure to do your homework before committing.

See a PMS in action before buying

Before taking the next step in your vacation rental business, why not see PMS in action?

Check out this webinar and get an in-depth tour of the ins and outs of an advanced property management software!

Hostfully’s PMS offers many of the seamless interactions you are looking for, and it was created to make your life easier. With easy channel integration and management, you’ll have everything you need at your fingertips. You’ll even be able to accept payments and check out important data on your rental. You can start with a free demo before fully diving in.