CHAPTER 4

PROPERTY MANAGEMENT SYSTEM

 INTRODUCTION
• Since the front office contributes major portion in coordinating the
services requested by the guests, it needs a system that can help the
front office staff to sell services and track them seamlessly and
simultaneously.
• A Property Management System (PMS) is a software system employed
to handle basic objectives of all the departments in the hotel business
and coordinate functions between them for optimum business
outcomes.
 Why is PMS Required?
• It integrates all critical operations of the hotel on one platform. It
provides real-time information on accommodations, reservations,
restaurants, spas, bars, and about every working arm of the hotel.
• It provides highly accurate information that is helpful for the
management to plan new goals and handle the investments in a
better way.
• It boosts the efficiency of the front office staff and in turn maximizes
the performance of the hotel business.
• It simplifies the time-taking or complex operations otherwise done
manually.
• It works for the convenience of the hotel staff, managing body, as well
as the guests.
 Selecting a Property Management System
• Due to the wide variety of hotels currently in the marketplace, PMS‟s
have evolved to meet the differing array of needs.
• The hotel size,
• Product type,
• Location, and T
• arget market affects this analysis.
• In most cases, franchise and management con-tract hotels must use
the PMS chosen for them by their chain.
• Older PC systems are MS-DOS based; newer PC systems use a
Microsoft Windows™ platform.
 CONT…
• The functionality of the software platform is important when selecting the
PMS.
• Several PMS‟s on the market currently operate on different software
platforms.
• Such as OPERA, CENET, IDS, Destiny, Guest Way, Autoclerk, Skyware
MSICloud, CloudPM, eZee Frontdesk, Hotelogix, Hetello, Hoteliga,
OpenHotel,…
• Once the software is decided upon, the hotel must consider the requisite
hardware needs. Hardware is understood to be the actual machine the
software runs on.
• Nearly all PMS suppliers allow potential purchasers to view software‟s
capabilities through demonstration trials.
• Hotels that are given a mandated PMS by their chain typically receive a
system with many more capabilities than needed.
 CONT…
• Once the software is decided upon, the hotel must consider the
requisite hardware needs.
• Hardware is understood to be the actual machine the software runs
on.
• The chosen software will require specific processing speeds and
memory capability of its hardware.
 Common Software Options in a PMS
• Reservations
• Room availability , Yield management
Front Desk
• Check-in , Guest credit audit , Room status , Advance deposits ,Postings to
guest accounts ,Cashier
Night Audit
• Room and tax posting , Various operational reports ,
Marketing and Sales
• Client file ,Travel agent , Direct mail , Meeting room information , Guest
history , Yield management
Housekeeping
• Room status ,Laundry Charges , Maintenance request , Equipment/supplies
Inventory, Housekeeping Reports
 CONT…

Accounting
• Accounts payable and receivables , Payroll , Profit-and-loss
statement ,General ledger , Balance sheet
Human Resources Management
• Personnel files , Time and attendance and appraisals. 
Maintenance
• Work orders
Food and Beverage
• Point-of-sale ,Recipes , Inventory , Menu profitability
Call Accounting
• Guest information , Outgoing and incoming call records with date,
time, place, duration, and charges.
 Reservation Management System

• Reservation is an activity concerning the sale of room with advance

booking.
• These records should be filed in such a way that the staff is able to
refer to any individual reservation enquiry quickly.
• Below is the detailed process of reservation:
• 1. Conduct the reservation enquiry
• 2. Determine room and rate availability
• 3. Create the reservation record
• 4. Confirm the reservation record
• 5. Maintain the reservation record
• 6. Produce reservation reports.
 R ev en ue M a nag em en t S ys t em

• Revenue management is the technique of planning to achieve

maximum room rates and maximize profit for the hotel.
• This concept originated with the use of yield management, a similar
concept, in hotel management .
• in fact, yield management was borrowed from the airline industry to
assist hoteliers in becoming better decision makers and marketers.
• It forced hotel managers to develop reservation policies that would
build a profitable bottom line.
• A computerized yield management system automates all the 'juggling'
out of yield management calculations and reservations, sparing staff a
complex and time-consuming task.
• It is able to keep track of a wide range of forecasting data, and
responds more flexibly to changes in booking levels
Guest Account Management System
• The hotels profitability not only relies on efficient room selling,
professional attitude and standard of services provided to its guest
but also mainly on the accurate guest accounting system and
procedures followed.
• It is the responsibility of front office to prepare the guest‟s bill,
present it, and ensure that it is paid.
• This involves a lot of record keeping, for a guest may incur a large
number of separate charges during his stay, from the cost of room
and various meals through to telephone, laundry and entertainment.
 Cont…

The objectives of accounting system are:

• To maintain an accurate and current record of all the guest transactions
• Provide an effective internal control by monitoring credit given to guests
and prevent fraudulent staff practices.
• To provide management with accurate and up-to-date financial reports
Type of Accounts
• The record of all the financial transactions between the hotel and the
guest is called a guest account. It is also sometimes referred to as a folio
or an account.
• There are three main types of account maintained by the front office
namely the resident guest accounts, the city accounts and the
management accounts.
 Cont…

Resident Guest Accounts

• The front office cashier holds mostly the accounts of the resident
guest.
• This accounts show the financial transactions with guests who have
registered and are currently staying at the hotel.
• Some of the resident guests may settle their incidental charges
themselves while their company will settle the accommodation
charges.
• In this case the resident guest has to have two folios:
• The master folio or account for the room charges, which then will be sent out
to the company for settlement
• The incidental folio, which will be settled by the guest personally.
 Cont…

City Accounts
• The record of financial transactions between the hotel and non-
resident guests is referred to as city accounts.
• Local business people who use the hotel facilities and services for
entertainment or business meetings but are not resident in the hotel.
• Walk-outs.
• These guests leave the hotel without settling the outstanding balance
on their account. They are no longer resident, therefore their account
is transferred to the city (sales) ledger.
• Guests who have not arrived but have sent prepayments to guarantee
their bookings. This amount is normally recorded in the city (sales)
ledger
Management Accounts
• The expense accounts or allowance given by some hotels to the hotel
manager is referred to as management accounts.
• These accounts are usually used to entertain guests or potential
clients.
• City accounts and management accounts are transferred to the
accounts department, which will then handle their settlement later.
 Folios and Types
• A folio is a statement of all transaction that has taken place
in a single account.
• The front office staff records all the transactions between the
guest and the hotel on the folio.
• The folio is opened with zero initial balance.
• The balance in the folio then increases or decreases
depending upon the transactions.
• At the time of check-out, the folio balance must return to
zero on settlement of payment.
• There are following major types of folios:
•  Guest: Assigned to charge for individual guests.
•  Master: Assigned charge for group/organization.
•  Non-guest: Assigned for non-resident guest.
•  Employee: Assigned hotel employee to charge against coffee shop
privileges
 Cont…

Ledger and Types

The ledgers are a group of accounts.
• The front office handles two ledgers:
•  Guest ledger: A set of all guest accounts currently residing in the
hotel.
•  Non-guest ledger: A set of all unsettled, departed guest accounts.
• Vouchers and Types Vouchers
• Vouchers are detailed documentary evidences for a transaction.
• It transfers the transaction from its source to the front office.
• Vouchers are used to notify the front office about guest’s purchases
or availing of any service at the hotel.
 Cont…
The following typical vouchers are used in the
• Cash Receipt Voucher
• Commission Voucher
• Charge Voucher
• Petty Cash Voucher
• Allowance Voucher
• Miscellaneous Charge Order (MCO)
• Paid-out Voucher (VPO)
• Transfer voucher
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