Property Management for Hostels: The Good & The Bad
CEO & Founder
Platform, Facilities, Properties
7 Min Read
A Property Management System (wow, what a technical name...) at your hostel can be a great tool if used properly. But wait a second, what is a Property Management System anyway? According to Wikipedia, a Hotel PMS (in a short sentence) is:
A software application used to cover some basic objectives such as coordinating the operational functions of front office, sales and planning etc.
Essentially, it's a hotel's or a hostel's main back-office software. BananaDesk is a Property Management System designed for hostels!
So, how does a PMS help you? Well, if used properly, a Hostel PMS can streamline you business and back-office work, cut down labor costs, and help increase your hostel's visibility online among other things. It lets you focus on the hostel and not on the back-office. It's very important that you incorporate one the right way though. If not, it can be a burden on your hostel. I've seen it happen with some hostels that use 'free' software, and end up having a disconnected and overcomplex back-office. If you use a PMS, make sure it makes your life easier.
Cut Down Labor Costs
A PMS cuts down labor costs by getting more done with less effort. For example, you probably take care of some of your accounting every month and then send it to your accountant. If you use excel for administration, you probably create a new excel file for your monthly accounting, add everything up, subtract out expenses, categorize to some extent, and then send to your accountant for digesting. It's a manual process that takes time. With a good PMS, that process is simply export activity, then send to accountant for digesting.
Another good example of reducing labor costs is a PMS that's integrated with Channel Management. Gonna go out on a limb here, but your hostel is listed on many sites (OTAs) like hostelworld.com, hostelbookers.com, gomio.com, booking.com and probably more. When bookings come in, you go into each back- office and update availability. That takes up ALOT of your precious time. Channel Management Software takes care of that by 1) receiving all of your bookings in one place, and 2) updating the latest availability to your other channels. An integrated PMS extends that 1) receiving those bookings to your front desk directly, and 2) sending the most up-todate availability to the Channel Manager. Now, that's a benefit drawn from a PMS that is tied into a Channel Manager. But, I think this is the only way you should be using a PMS in today's world. BananaDesk also happens to be made this way ;)
Increase Your Hostel's Online Visibility & Streamline Your Business
Building off of that last example: If you manage everything on an integrated PMS + CMS (Channel Management System), you can publish your hostel's beds onto more sites with no maintenance. And that helps extend your online visibility, so you reach a wider audience. Every OTA has its audience. Certain backpackers prefer gomio.com over hostelbookers.com or prefer LonelyPlanet as a reference more than any reviews online. So, unless your hostel has 100% occupancy every day of the year, you want to appear in more places online. Channel Management tied into your PMS can help you achieve that.
If your PMS isn't integrated with a CMS or has one built in then you're missing out on one of the biggest benefits. Keeping everything central is key to optimizing your back-office. You could find yourself spending too much time and money learning new software that isn't even going to solve one of your biggest issues: managing multiple booking channels. That's bad.
Is Your Hostel Ready For A PMS?
Answer the following questions to find out!
Do You Need To Be At The Hostel To Know What's Going On?
You shouldn't need to call your front desk just to find out whether that 12-person group you were expecting checked in. With a modern PMS, you'll have remote access in some way and will be able to easily see exactly what's going on there (check-ins, check-outs, payments, bookings, etc.) BananaDesk is a web app, so you don't need to install anything and can access it from anywhere including your smartphone.
Do You Offer Beds And Rooms On Booking Channels?
If you do have more than 2 channels without a CMS, then you're probably going nuts! Updating availability and pricing for each of those channels daily is very very time-consuming. There's a little principle in programming called the DRY principle which stands for "Don't Repeat Yourself". I've really incorporated it in everything else I do and you should to: if you ever repeat yourself in a process, then there's probably something you can do better. Think of it as you should be lazier than you currently are :) In this case, you shouldn't be adjusting the same allocation on every channel manually. It's way more lazy to find a way to make a change once and other booking channels would just know about that update. Like we mentioned above, that's what a Channel Management System does. And most modern PMS either come with one baked in (like BananaDesk) or offer an integration with one. This is SUPER important.
Check-in and Check-out Preparation Eating You Up?
In high season, you've got lots of guests checking in and out. The list for your front desk staff should already be put together beforehand. Putting it together everyday is simply repetitive. But it shouldn't be, and this is another example of the DRY principle. A good PMS gives you that kind of information, by day, week, month or whatever. You have that list of check-ins ready to go as soon as you start the day.
Want To Know How Your Hostel Is Performing?
Ever wonder how your business is actually performing? Or what percentage of guests return to your hostel? How they heard about you?
First of all, graphs, metrics, statistics, and a Dashboard are soooo cool to look at, especially when they are relevant! But all kidding aside, relevant metrics give you the tools you need to make decisions. Remember, data trumps guessing every time. Reports allow you, technical or not, to see exactly where your hostel stands financially, in your marketing efforts, and more. Excel does give you some pretty nifty tools for crafting interesting charts, but you need to be an excel-Guru to make them. And you need clean, organized data that can be filtered through to really dive into what's going on. We'll definitely cover the power of data analytics in a post soon, I think it's a rabbit hole. As an example, below are screenshots of BananaDesk's Dashboard:
Do You Have A Complete Grasp Of Your Accounting?
Similar to the last question: you need to know exactly where you are standing. And setting up a good system yourself can be tedious. This is another place in your business where a PMS can alleviate some of that time and pressure. Your accountant will probably love you more too.
Hard Time Finding A Reservation Or Transaction That Happened A While Ago?
The front desk needs to be simple enough that you can go back 2 months from now and find something that happened today easily. You shouldn't be searching endlessly for a reservation, even if you only remember one thing about that reservation like the person's first name. A good PMS will have an organized database and let you search through it with any data point (name, country, date, room, room type, channel, etc.) Almost like searching for a friend on facebook.
Are You Copy / Pasting A Lot?
Do you need things to be more connected (reservations, accounting, new bookings, your bar inventory)?
Building off of that programmers' DRY principle, copying and pasting should not be part of your routine. Why? 1) you deserve to be lazier and 2) if anything changes in that transaction, you have to go back and update it in every place you copied / pasted. Here's an example: a guest buys a Coke for $10. In an excel environment, you would 1) add a Coke to that guest's tab, 2) add a payment in cash of $10, 3) add a cash-in amount of $10 to your cash register, and 4) decrease your Coke stock by one. In a good PMS, that all happens behind the scenes when you sell that coke for $10 (in one transaction.)
Do You Manage More Than One Property?
You definitely need a central PMS to manage multiple hostels. Administrative headaches are multiplied and streamlining everything into one place is super important. That way you don't have to split yourself up into many little pieces and can save your sanity!