The Complexity of Condo Hotels
Condo hotels have quickly become a concept with which we're all very familiar. This booming trend has transformed the hospitality industry, and it shows no sign of slowing down. So, the question is, what kind of technology solution is needed to effectively run these properties? I'll explore what management companies and owners need to know and demand in a property management system (PMS) with a fully integrated condo solution.
Condo hotels present a number of software complexities and challenges. Traditional solutions for operating typical transient hotels are inadequate to successfully run a condo property. Much of the functionality necessary to manage these types of properties is missing from a standard PMS. Condo hotel software needs to track specific and complex owner accounting including revenue splits, management fees, unit maintenance, property and government taxes and much more. Management companies are also responsible for ensuring proper room rotation so each unit owner has an equal revenue opportunity.
The software needs to easily adapt to the various owner contracts as they vary from property to property and, in some cases, even within the same property. Since no two contracts are the same, aspects like owner usage, multiple seasons, charge backs, promotional days, state laws and pool versus individual revenue need to be customizable.
In addition, management companies in certain geographical regions must adhere to contract limitations set forth by each owner. In these areas, should owners not want children, smokers, pets, discounted rates or more than four guests for their units, the system needs to track and prompt the user of these requests in order to maintain the wishes of each owner. Therefore, the solution must be configurable for every region, contract and need of a given property.
Payment and financial considerations must also be efficiently managed. At the end of each month, users need to have the ability to perform pre-closings to ensure all figures are correct before moving on to month-end closings. Once completed, owner payments must be made either by cutting checks directly from the system or through direct deposit. Owner statements and tracking must be accurate and unit owners must have remote access to their statements and forecasted revenue.
Another important aspect is the transparency of the condo system for front-end users. These people shouldn't be confronted with or asked to perform different tasks than they would when working in a normal hotel environment. Every important facet is found behind the scenes, where management, back-office and accounting personnel easily track and adjust owner statements based on their condo formula, gross revenue and management fees.
Owner confidentiality must be secure with only certain personnel having access to revenue information, while the property and owners still gain the intrinsic benefits of revenue-generating features that premier PMS systems can provide.
A PMS that interfaces to a standalone condo module will never achieve the same level of core functionality, true data exchange and work flow as a single application system, resulting in possible lost revenue opportunities. The clear goal is to achieve the best of both worlds with one fully integrated PMS/condo system. Settling for less handicaps both management efficiency and owner satisfaction.
With more than four years of experience in this market segment, I've learned that constant development is absolutely necessary in order for condo hotels to meet individual client requests, ever-changing landscapes and unique state condo laws. The configuration of the system varies from property to property based on the management style and specific owner contracts and must be in place before the first contract is ever signed or reservation is taken.
As a result, a seamless PMS/condo system supported by industry experts is an indispensable tool for successful property management companies in achieving what should be their only goal: maximizing owner revenues.
David Perkins is CEO and president of IQWARE, Inc., providing a global property management system with a suite of fully featured hospitality solutions that integrate a wide range of applications for every market. He can be reached at 954-698-5151, ext. 28 or firstname.lastname@example.org.
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