Cloud PMS Realities – Part 4

Local PMS vs Cloud PMS: True Cost Analysis

When choosing hotel software, cost is one of the most critical factors. The difference between cloud PMS and local PMS is not only about monthly subscription or license fees; total cost of ownership (TCO) and operational load are also decisive.

Initial Cost

- Local PMS: Requires significant infrastructure investment. Servers, networking, backup systems, hardware, and setup costs are high upfront.
- Cloud PMS: Initial cost is usually low, starting with a subscription fee. However, total cost may differ over the long term.

Maintenance and Updates

- Local PMS: Updates and maintenance are usually handled by hotel staff or vendors, adding labor and support costs.
- Cloud PMS: Provider handles updates automatically, but additional modules or services can increase monthly fees.

Scalability

Cloud PMS pricing is typically per user or per room. As demand grows, costs increase linearly. Local PMS depends on hardware capacity, requiring additional investment to scale.

Hidden and Extra Costs

• Cloud PMS subscription may require extra fees for additional modules or services
• Local PMS may incur costs for infrastructure upgrades and labor for maintenance
• Backup and disaster recovery may require additional spending
• IT personnel or support contracts

Conclusion: Which is More Cost-Effective?

- Small hotels with limited budgets may find cloud PMS attractive initially.
- Large hotels or those prioritizing long-term data control and customization may achieve lower TCO with a local PMS.
- The key is to evaluate not only price but also data control, operational load, and long-term risks.