How Much Does Hotel Management Software Cost?

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I love sales. Especially at T.J. Maxx.

hotel management software

My aunt actually calls it T.J. Saxx, like Saks Fifth Avenue, for all their deals on designer duds. On every tag isn’t just the in-store price, but also the original retail price so you can see the deal you’re getting. Finding out how much I saved at the register always softens the blow of my total.

It’s a smart sales tactic. And I don’t mind that it works.

So I was pretty shocked when I heard that T.J. Maxx actually estimates the original retail price themselves. Some of their ‘sales’ might even be a higher price than at other retailers.

Tricky tricky.

But I no longer trust T.J. Maxx’s prices. Because how do I know now if I’m really getting a deal or if they’re taking advantage of my addiction to toe socks and moto boots?

Similarly, when you’re searching for hotel management software, how do you know if you’re getting a good deal? Not to mention, how much does it cost in the first place?

Sounds like something that would take a lot of time and effort to figure out. Shouldn’t more of that be spent on your guests instead?

This is where I come in.

Below, I’ve compiled a list of the three most common pricing models for hotel management software products, including their price range and a list of solutions that use each model so you can budget and compare your preferred solutions accordingly.

Let’s get started.

Pay-per-room

Pay-per-room is by far the most popular pricing model for hotel management software, though this model may also overlap with the tiered model (below). In this type of overlap, different tiers are available, with each one increasing in both cost and number of features, but your hotel’s number of rooms will also affect the overall cost. A larger number of rooms will result in a higher price per tier. However, discount packages may be available for larger hotels. Pricing that is based solely on your hotel’s number of rooms may also include a one-time setup fee.  

Cost: Can be as little as $4/room/month with an accompanying $500 initial setup fee. Generally, the cost rises when the number of rooms rises. When overlapped with a tiered structure, prices also start around $4/room/month and can top $425/room/month if your hotel has over 250 rooms and if you choose a higher edition. Enterprise hotels may have to speak with a sales representative for a customized price.

Software with this model:

Tiered model

Tiered models can overlap with pay-per-room, though most tier-based models include a room range rather than a specific number that affects pricing. Tiered models are often subscription-based and depend largely on the edition level of your choosing. Different levels offer different features with the more expensive usually resulting in more features and other functionality (like additional storage).

Cost: Cloud-based solutions are a cheaper route, with monthly subscriptions starting at $50 for the first tier, though if you sign up for setup and training, you could also pay a one-time fee around $1,200. A more traditional, subscription route can start at $119/month and max out around $300/month, though possibly more depending on how many extra rooms you have outside of their prescribed range.

Software with this model:

One-time license

The initial investment is high for this model, but benefits can include no mandatory license fees, contracts, or term commitments. In this model you typically pay a single license fee to own and use the software. This is usually coupled with an installed or on-premise software.

Cost: Because this is a one-time license, initial costs will be higher than a subscription-based service. Depending on edition and room number, cost can begin around $995 and rise to more than $10,000. A higher edition and higher room number will result in a higher cost. Be sure to read the fine print and details as there may be restrictions or extra fees when factoring in your number of workstations or users.

Software with this model:

Other Pricing Models

Know of any other popular hotel software pricing models I missed? Let me know in the comments below.

Header by Rachel Wille

Looking for Hospitality Property Management software? Check out Capterra's list of the best Hospitality Property Management software solutions.

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Capterra

Capterra

At Capterra, we believe that software makes the world a better place. Why? Because software can help every organization become a more efficient, effective version of itself.

Comments

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From my experience, different software companies charge differently. Some charge by user, and others charge flat rates, most have different pricing models that work for them. Some of them charge heavy implementation fees on year one and charge for training and support, this was the old model and it worked well because there were no alternatives. Now that there’s a lot of companies in the hospitality space its become quite competitive, hotels have much more choices and legacy systems are getting replaced by more modern cloud versions that are more intuitive.

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Hi Tracy, i can help you develop one that you can install on site. Let me know if you are interested. I am currently working on one for a local hotel.

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I am looking at buying a Hotel Property Management Software, however I need one that is installed onsite, as we frequently have mobile phone and internet go out of service for extended periods of times (we are located in PNG). We are also relatively small, so would need something that is not too expensive. Do you have any suggestions?

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We have made one standalone for a local hotel and can also making one like booking.com. Needless to say that the prices are way too low. We have 170 million people in this country the size of smallest state in USA. Good news is, a huge % of them are programmers!

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This is very informative article. I am in the process of creating what I would think is a next big Hospitality on-demand service app . I have been trying to understand the market and also understand where I should stand when it comes to pricing my product. So thank you again for your help. Sam

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Hi William,

Not necessarily. While luxury hotels, resorts, or chain hotels do seem more visible, even smaller hotels make use of hotel PMS software. For example, according to a 2014 survey by the AHLA, the majority of hotels in 2013 had under 75 rooms, which is considered to be a small hotel. B&Bs and boutique hotels have also been taking off in the industry, and while they tend to be smaller, they still need software to keep their staff and bookings organized, especially if guests are using third-party sites like TripAdvisor.

Hope that helps!

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Hi Jennifer,

Is hotel management software considered enterprise software in general?

Thank you!

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Thanks, Justine! Glad to be of help!

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Will do Jennifer 🙂

Off to share this with some friends. Keep up the great work.

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So happy to help, Justine!

Hotel software can be an expensive investment, so it’s great to know the ballpark ranges for each pricing model before setting out on your own search.

Be sure to come back every Tuesday for my latest in the industry!

Thanks again!

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Thank you for this great post Jennifer,

I always get something new when i read your blog posts.
Pricing is really a big deal to consider in almost everything especially when planning to purchase a hotel management software. Now i can get an overview of how the prices are determined through different pricing models

Cheers,
Justine

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