Hotel software for small hotels

Whether used by a large hotel group or a small boutique, hotel software has become an integral part of running a modern hotel business. The general benefits are obvious: professionalisation, increased efficiency, cost control, security compliance and much more. However, while most of the benefits apply equally to all types of hotels, the preconditions, requirements and needs can vary greatly depending on the type of business and are particularly relevant for smaller hotels. In this blog post we will look at why hotel software is valuable for small hotels, what types of hotel software there are, what benefits they offer and what to look out for when choosing one.

What is hotel software?

Hotel software refers to specialised digital systems or programs used to manage hotels and other accommodation facilities. The primary goal of hotel software is to optimise hotel processes. This includes areas such as marketing, sales, reservations, check-in, billing, customer management and much more. Many hotels use a variety of different and specialised solutions, each covering one or more areas. Others are satisfied with just a few solutions or even an all-in-one solution that attempts to combine many partial solutions into one product.

However, there is no generally accepted definition of what exactly hotel software is and what it is not. In some cases, the term hotel software is also used as a pure synonym for a system that corresponds primarily to a property management system (PMS). However, the definition introduced above is used below.

What types of hotel software are there?

The software and system landscape in the hotel industry is extremely extensive and complex, and some hoteliers also use a variety of other systems that were not developed specifically for the hotel industry.

Among others, the following types of hotel software are frequently used:

Property Management System (PMS)
Central Reservation System (CRS)
Channel Manager
Revenue Management System (RMS)
Internet Booking Engine (IBE) / Online Booking Engine
Digital Guest Journey / Guest Experience Software / Guest Management / Guest Apps
Housekeeping Software
…

A variety of other software is also in use, which may or may not be specially optimized for the hotel industry:

Customer relationship management system (CRM system)
Access control system (locking system)
Voucher software / voucher system
Conference software / event management software
Chatbot
Time and attendance recording system
Content Management System (CMS) / Hotel Website
E-Mail Marketing System / Newsletter Software
…

There are a large number of providers who offer a number of these solutions in a single product, or who even promise to provide an all-in-one solution. Other vendors are specialists in individual solutions. Ideally, the solutions can be linked via interfaces to ensure data transfer and to map more complex cross-system processes and automations. For small hotels in particular, both are possible options and the advantages and disadvantages should be carefully weighed according to requirements and conditions.

Why is hotel software relevant for small hotels?

Small hotels often face the challenge of providing a high quality of service with limited resources while remaining competitive.
In addition to their smaller size and lower economies of scale compared to large hotels or hotel chains, they often have fewer staff and financial resources, which makes it difficult to manage complex processes efficiently.
In addition, the lack of qualified staff often means that existing staff have to take on more tasks at the same time.
Despite lower budgets, guests’ expectations of service are particularly high, as this is often seen as a central component of the experience, especially in small family-run businesses.

Process optimization and automation

For small hotels, automating administrative tasks can be a particularly effective step, as they typically do not have specialized teams for many of the process areas involved.
Automation thus relieves employees, optimizes processes and results, increases efficiency, saves costs and reduces the risk of human error.
It also allows employees to focus more on guest care and creating personalized experiences.

Extended booking and channel management functions

Small hotels in particular can benefit from channel management systems, as they eliminate the need for constant manual updating of availability and prices on various booking platforms.
Modern hotel software enables real-time updates, improving occupancy and maximizing revenue.
These solutions are particularly relevant for smaller hotels, which often rely heavily on online booking platforms to fill their rooms.
The risk of overbooking or double booking can also be reduced through the use of hotel software.

Revenue management and data analysis

For a long time, complex revenue and yield management was reserved for airlines and later for large hotels and hotel chains.
However, good revenue management is also crucial to the success of smaller hotels and dynamic pricing can bring important competitive advantages and increase turnover.
Revenue management tools enable the automatic adjustment of prices depending on demand, occupancy, market trends and many other factors.
This function is particularly interesting for smaller hotels, as they often have to operate more flexibly and dynamically than large hotels, which work with different cost structures and can fall back on established pricing structures.
The ability to react quickly to market changes can be decisive for the economic success of a small hotel.

Efficient personnel management

Small hotels can also benefit from software solutions in the area of personnel management.
Solutions that create shift schedules, record working hours and automate payroll accounting lead to a more efficient use of human resources and reduce the administrative burden.
This is a great added value for smaller hotels in particular, as they often do not have dedicated HR departments.

Security & Compliance

Companies, especially in Europe, have to comply with a large number of regulations and laws.
Be it data protection, information security, occupational health and safety or taxes.
There are also special regulations for hotels, such as the Federal Registration Act or the Accommodation Ordinance.
Here too, software solutions can help to meet requirements and simplify and automate complex processes.
Examples include the electronic recording of working hours or the digital registration form.
But the following also applies in general: data is much safer in good software than on paper or in an Excel spreadsheet.

Improved guest experience through digital solutions

One of the great strengths of many small hotels is their personal contact with guests and their ability to create special and personal moments.
But this is another area where guests’ rising expectations are making themselves felt.
Mastering rising service expectations and increasingly complex administrative processes is a major challenge.
At the same time, many small hotels are reluctant to use new technologies or do not have the necessary knowledge and resources to use them efficiently.
This combination can have a negative impact on service quality and the guest experience.

But some technologies themselves are also being taken for granted by more and more guests.
The availability of services such as online check-in, self-service kiosks, digital payment and digital communication options are increasingly becoming standard.
Where years ago they were still exciting, today they are already part of the service or basic features in some customer segments.
In general, guests today want more and more flexibility and independence when traveling, want to be able to check in on the go and make adjustments themselves with just a few clicks.
At the same time, however, personal service should also be convincing, only in a more targeted and conscious manner and, above all, when the guest has had the choice and has been able to consciously decide against self-service.

For smaller hotels that do not have the extensive IT departments of large hotel chains, hotel software solutions offer a cost-effective way to meet these expectations.
In addition, as already mentioned, they help to automate administrative processes and minimize errors.
This allows employees to concentrate on the essentials and one of their greatest strengths – guest care.
Digitally well-positioned hotels are also better equipped for future developments, including in terms of rising guest expectations.
With the right technologies, they can react even faster and more efficiently to the changing needs of guests.
Small, independent hotels benefit particularly here, as they are already able to act more dynamically and at short notice.

Summary

Hotel software also offers small hotels the opportunity to optimize their processes, improve the guest experience and increase their competitiveness.
The use of modern technologies enables small hotels to work more efficiently, improve service quality and ultimately increase customer loyalty.
These points are particularly relevant for small hotels, as they do not have the extensive resources and structures of large hotels or hotel chains and are therefore dependent on efficient and flexible solutions.

What should small hotels look out for when choosing hotel software?

For all the benefits that hotel software of all kinds can offer small hotels, there are also some challenges and aspects that need to be considered when making a selection.
Above all, it is important to ensure that the chosen solutions meet the specific needs and offer a good cost-benefit ratio.
Below we have compiled some important points and questions that hoteliers should ask themselves or the providers of potential solutions:

1. the love of money

Although hotel software can help hotels to save resources and costs and maximize revenue, the solutions themselves are of course also associated with costs.
For smaller hotels in particular, it is therefore important to carefully weigh up the costs and benefits.
Hoteliers should ask themselves the following questions:

What is my budget?
What are the total costs of the software including license fees, implementation costs and ongoing maintenance fees?
Will I incur additional costs such as training costs, support costs or usage-dependent fees?
Are there flexible pricing models such as monthly subscriptions or performance-based cost models?
What costs are incurred for additional modules or integrations?
Do the price models take my company size into account, e.g. depending on the number of rooms?
What is the relationship between the benefits of the software and the costs?
What savings, increases in turnover or other added value can I expect?

2. integration with existing and other systems

At the latest when a tech stack with several solutions is created, the question of integrations or interfaces to existing and potential systems arises.
But even those who opt for a supposed all-in-one solution at the beginning may want to connect a specialized and more comprehensive partial solution for certain processes at a later stage.