CRM for hotels and B&Bs: do you really need it?

A CRM for an accommodation isn't an extra button in your system, it's the list of who your guests are and when you want to see them again. Most small hotels and B&Bs don't have that list anywhere, while it's the cheapest source of bookings that exists.

The problem

Suppose you have 6 rooms and run 72 percent of your bookings via Booking.com. Every guest who sleeps at your place, leaves and disappears. You don't know their name anymore, you don't have their email, and if they come back next year they book via Booking again. So you pay commission twice for the same person. With an average booking value of 240 euros and 18 percent commission that's just over 43 euros per stay you give away for someone you already knew.

Multiply that. A B&B with 200 bookings per year where a quarter are repeat guests is giving away roughly 2,000 euros per year in commission to people you already knew. That's money you can mostly keep if you can reach those guests yourself. That's what you need their data for, and you're not storing it anywhere if you're not deliberately collecting it.

That's the gap a CRM closes. CRM stands for Customer Relationship Management: software to track your guest relationships and data in one place. Who came, when, with how many people, what they spent and how you reach them. With that data you can approach a guest you already know directly for another stay, without middleman and without commission. That's the whole point of saving their information.

The confusing part is that "CRM" sounds like another system to add. For many small accommodations it's not. It can be a spreadsheet, a feature in your email tool, or part of software you already have. The question isn't which CRM you buy. The question is whether you actually keep guest data somewhere that you can use later.

Important to keep separate: a CRM isn't a PMS and isn't a booking module.

• A PMS (Property Management System, the software that manages your room scheduling, check-in and invoicing) runs your daily operations.
• A booking module (the reservation tool on your own site) takes in the booking and processes payment. Read in what a booking module is how it fits your accommodation.
• A CRM sits alongside them and uses the data from both to follow the guest across multiple visits.

A simple way to remember it: the PMS knows room 3 is occupied tonight, the booking module just filled room 3, and the CRM knows the guest in room 3 stayed here before too and ordered a gluten-free breakfast. The PMS thinks in rooms and dates, the CRM thinks in people over time.

In practice the line between those three blurs. Many modern PMS systems and booking modules have basic CRM features built in: a guest list, a notes field, sometimes a mail button. For a small accommodation that's often enough, and you don't need to buy a separate system. Check first what your current software can already do before you buy anything new.

The data you need is often already in your systems. How to collect and use it is covered in managing guest data.

Calculation example

A CRM subscription costs money, a spreadsheet doesn't. The question is whether the extra bookings you get from it cover the costs. Here the two options side by side for a B&B with 6 rooms.

Now calculate what one recovered booking brings. Say your average booking value is 240 euros for two nights. One direct return booking that would otherwise go through Booking saves you about 43 euros at 18 percent commission. A 60-euro-a-month CRM costs 720 euros a year. You thus need roughly 17 direct return bookings per year just to recover the software costs, before you make a cent profit.

With 6 rooms and mostly new guests you don't hit 17. A spreadsheet does the same work for 0 euros, and you keep the full saving yourself. With a solid core of repeat weekend guests and a full list the math flips: the automatic linking saves you hours and you easily hit more than 17 return bookings. That's where the dividing line is. The mistake most owners make is buying software when the list is still empty, instead of when you can't maintain the list by hand anymore. Calculate it for your own nightly rate and occupancy via the savings calculator.

Action plan

Decide first if you need it, then start as simple as possible.

1. Count your repeat guests. Look at your bookings from the past year: how many guests came for a second or third time? Under 10 percent repeat guests a spreadsheet is enough. Above that, targeted relationship management starts to make sense.

2. Start with a spreadsheet. Make four columns: name, email, last visit date, booking value. Fill those after every booking. This is your CRM in simplest form and costs nothing. How to build a list without being dependent on Booking is in building a guest base without Booking.

3. Collect emails directly. Ask at check-in or in the confirmation email for permission to mail guests later. A guest who books via Booking doesn't share their real email with you. You have to ask. Why this matters so much is covered in first-party data for accommodations.

4. Send the first return email. After the stay a short thank you, and months later an offer to book again. For weekend guests an email in September for fall vacation, for cyclists an email in March for the new season. This is the whole reason you keep data. Start small with setting up a hotel newsletter.

5. Switch to CRM software only when the spreadsheet starts pinching. Notice your list is getting too big to manage or you want to auto-target guests, then a paid system makes sense. First check whether your PMS or booking module already has CRM features built in, so you don't pay double.

Common mistakes

• Buying software before you have data. An empty CRM is an expensive address list with no addresses. Collect guest data in a spreadsheet first, see if you actually use it, then buy software afterward.

• Mixing up the CRM with your PMS. Many owners think their reservation system already "does everything". A PMS runs today's operation, not the relationship across years. Check what guest data your system keeps and whether you can send an email from it.

• Collecting data but never emailing. The bookings don't come from keeping track, they come from reaching out. A list of 400 guests you never make an offer to produces nothing. So plan two fixed email moments per year in advance, like for high season and holidays, so sending doesn't depend on whether you happen to think of it.

• Not asking permission. Emails you use without permission for marketing, you can't send that way. Ask briefly when collecting whether the guest wants offers, then you're good.

• Starting too complex. A CRM with automatic workflows, scoring and pipelines is built for sales teams, not a B&B with 6 rooms. Start with name, email and date. You don't need more at first.

• Seeing the OTA booking as the end. A guest who books via Booking is a customer of the platform, not you. As long as you don't ask for their email yourself, they stay with Booking. Treat every booking, even those through a platform, as the start of a relationship you can continue.

What you can do now

A CRM for a small accommodation is at its core a list of guests you want to see again, plus the emails you send them. For most B&Bs and small hotels a spreadsheet is the right first step. Buy software only when you can't maintain that spreadsheet anymore.

Make the list today with four columns and fill in last month's bookings. Ask your next guests for their email and permission. That's your guest relationship management in action, without having spent anything. Once that list hits hundreds of names in half a year and you can't manage by hand, that's when to look at paid software. Not before.

Want to know exactly what data to collect and how, read managing guest data and building a guest base without Booking. Prefer we set the whole setup for your accommodation, from data to return emails? We handle that at marketing for hotels.