Avoiding price traps: Tips for choosing hotel tech systems

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Many property management systems (PMS) offer free basic features but later require costly upgrades for essential tools like revenue management, customer relationship management (CRM), and point-of-sale (POS) integrations. This pricing strategy often forces users into upgrading to more expensive packages.

The price trap

In the worst-case scenario, hoteliers can end up spending thousands more than anticipated. A basic package may appear affordable at first, but necessary upgrades can quickly push costs upward.

Furthermore, hidden expenses for customer support, software updates, and add-on services can significantly inflate the total cost, potentially doubling or even tripling the expected financial outlay.

Many software providers include terms and conditions that may not be fully transparent upfront, locking hoteliers into agreements that are difficult and costly to exit.

Ian Lumsden, managing director of Ankerdata Hospitality Systems, explains: "This is why we adopted a flat subscription fee model that includes all core functionalities. Our pricing encompasses integrated distribution systems (IDS), CRM, revenue management systems (RMS) and all generic standard interfaces needed for your POS, and revenue management tools without the hidden costs that often catch hoteliers off guard. You know what you are in for."

Lumsden further advises hoteliers to base their decisions on thorough research. At a recent Ankerdata demonstration, he provided the following tips to hoteliers searching for tech solutions:

1. Scrutinise pricing structures: Investigate all costs associated with upgrades and add-ons before committing.
2. Understand terms and conditions: Read the fine print carefully, especially regarding cancellation policies and potential fees.
3. Evaluate competitor options: Research and compare various PMS solutions to ensure you select one that meets your operational needs without unnecessary costs.
4. Consider your long-term needs: Anticipate future requirements to avoid being pressured into upgrades that may not be essential to your current operations.
5. Look for transparent pricing: Opt for vendors that offer a flat subscription fee model, mitigating the risk of hidden charges and providing clearer long-term cost projections.
6. Phone a friend: Seek recommendations and reviews of systems and products from fellow hoteliers.

Lumsden also highlights the value of local support: "It can be tough for users to deal with international time zones, language barriers, or even different ways of doing things when something goes wrong. Our clients rate our local support and after-sales service as one of the main reasons for referring us."

The devil’s in the details — and in the hidden fees. Look closely before committing to any tech solution.