How should an Irish hotel calculate the full first-year cost of a PMS?
A monthly software quote is only the starting point. Use this worked budget for a fictional 20-room hotel in Kerry to compare complete offers and plan the changeover.
Calculate the full first-year cost of a property management system (PMS) by adding setup, migration, training, twelve months of subscriptions and integrations, payment processing, transition costs and staff time. Keep a possible exit reserve separate. Compare identical scope and payment volumes, then add any irrecoverable value-added tax (VAT) confirmed by your accountant. The example below totals €10,600 before VAT adjustments, or €11,100 including an unspent €500 exit reserve.
Define the system you are budgeting for
A PMS manages reservations and daily accommodation operations. Your budget should cover the connected system: the booking engine for your website, channel management for online travel agencies (OTAs), payments and required accounting or till connections.
- Request the same scope from each supplier: 20 rooms, named users, booking channels, modules, connections and support requirements. Mark each item included, optional or separately invoiced.
- Set a twelve-month period from the first subscription charge. Add implementation bills paid before that date separately, so starting the calendar at go-live does not hide them.
- Record setup charges, monthly or annual billing, promotional expiry dates and renewal terms. Ask both suppliers about a connection: either side may charge.
Compare the whole system before cancelling existing services. A booking engine included in a bundle should not appear again as a separate subscription unless another service is genuinely retained.
A twelve-month budget for a 20-room hotel
This is a hypothetical worksheet, not a RoomRaccoon quote or a market benchmark. Assume twelve billed months, €300,000 of guest card charges processed through the selected service and 1,500 charge transactions. Card volume means the amount actually charged, including guest-facing taxes where applicable; it is not necessarily the hotel's net revenue.
Copy this table into a spreadsheet and replace every rate, quantity and duration with your own figures. Supplier costs below exclude VAT where applicable; staff time is an internal cost allocation.
| Cost and timing | Example calculation | Year-one amount |
|---|---|---|
| Core subscription · recurring | €250 × 12 months; PMS, booking engine and channel manager assumed included | €3,000 |
| Configuration · once | €600 fixed setup fee | €600 |
| Data migration · once | €300 for the agreed import scope | €300 |
| Supplier training · once | €250 for agreed sessions | €250 |
| Connection setup · once | €150 activation fee | €150 |
| Connection subscription · recurring | €30 × 12 months | €360 |
| Card terminal rental · recurring | €20 × 12 months; no purchase fee assumed | €240 |
| Payment processing · variable | (€300,000 × 1.5%) + (1,500 × €0.20) | €4,800 |
| Old-system overlap · transition | €150 × 2 months | €300 |
| Supplier-cost subtotal | €1,300 one-off + €3,600 recurring + €4,800 variable + €300 overlap | €10,000 |
| Internal staff time · once | 24 combined staff-hours × €25 loaded hourly cost | €600 |
| Year-one economic cost | €10,000 + €600, before VAT adjustments | €10,600 |
| Possible exit reserve · contingent | €200 export assistance + €300 notice-period overlap, only if needed | €500 |
| Planning total including reserve | €10,600 + €500, before VAT adjustments | €11,100 |
The €300,000 is a transaction-fee base, not another expense. The €600 staff allocation is already-paid time unless extra shifts are required. The €500 reserve is not a bill or an incurred expense.
Budget the payment mix, not just one headline rate. The example deliberately assumes one blended rate. Replace it with separate card categories and online or terminal rates where quoted. At 1.8% instead of 1.5%, the same volume adds €900: the economic cost becomes €11,500 and the planning total €12,000.
Turn the total into a cash-flow plan
Add columns for invoice month, VAT treatment and payment date. Annual prepayment moves cash forward even when its monthly equivalent looks affordable. Allocate processing fees using your seasonal forecast; do not assume a Kerry hotel processes equal volumes in January and August.
- Check whether deposits and balances generate separate transaction charges. Request the treatment of refunds, chargebacks, foreign cards, currency conversion, minimum fees and any retained processing charges.
- Separate costs from benefits. Existing merchant fees may be replaced, but do not deduct hoped-for booking growth or staff savings from invoices you must fund.
- Confirm old-contract notice dates, export scope and new-contract exit charges. Add known termination costs to the base budget; use a reserve only for uncertain future costs.
How should VAT be handled?
Revenue's VAT recovery guidance links recovery to taxable business use and supporting records; exempt or non-business use can restrict recovery. Its reverse-charge guidance covers services received from abroad that are taxable where received.
Ask your accountant to check the invoicing entity, your VAT status, each charge's treatment and any reverse-charge obligation. Add irrecoverable VAT to economic cost and model VAT payment or recovery timing separately. Do not apply one blanket VAT percentage to software, payment fees and payroll time.
Build a property-specific RoomRaccoon quote
The RoomRaccoon pricing and package comparison lists PMS, channel manager, booking engine and payments in its entry package, with tools and integration allowances varying by plan. Payment functionality being included does not establish your transaction tariff. Use the hotel property management system overview to identify the workflows you need demonstrated, then request written costs for your room count, modules, migration and payment mix.
Bring your 20-room requirements and processing figures to a demo, then use the resulting quote to replace the worksheet assumptions.
Book a demo for your propertyFirst-year PMS budget questions
Should OTA commissions be included?
Keep distribution commissions in a separate hotel trading budget. Include any booking-related fee charged by the software supplier here, but avoid treating every OTA commission as a PMS cost.
Does commission-free mean payment processing is free?
No. A booking commission and a card-processing charge are different costs. Ask for both fee schedules and the subscription price before comparing offers.
What changes in the second year?
Remove genuinely one-off setup, migration and training charges. Keep subscriptions, processing and required connections, then apply confirmed renewal rates. Allow for additional training or modules only where planned.
Sources and checks
Checked 13 November 2026. Supplier pages establish product scope; all worksheet prices and volumes are invented planning assumptions.
- RoomRaccoon: packages and included tools; PMS overview.
- Revenue: who can reclaim VAT; reverse charge.
- Additional scope references: GuestDiary's connected hotel software and Little Hotelier's small-property software. Supplier descriptions, not an independent comparison.
