A property management system (PMS) is the hotel's main software. It holds every room, every booking, check-in and check-out, each guest's bill and each room's cleaning status. Every other hotel system connects to it. The word "property" here means a hotel or a resort.
The PMS is the hotel's system of record: the one database that the hotel treats as the official version of its rooms and bookings. A booking may arrive from a travel site, the hotel's own website, a phone call or a company's travel desk. Wherever it comes from, it ends up in the PMS.
A PMS does four main jobs. First, the reservations module holds the bookings for each night, and shows which rooms are free. Second, the front desk module checks guests in and out, and records each guest's identity document, as hotels in India must do. Third, the housekeeping module tracks each room's status: occupied, dirty, being cleaned or ready. Fourth, the billing module keeps each guest's bill, which hotels call the folio. Room charges, restaurant bills, laundry and taxes are all added to it.
Take, for example, a 40-room business hotel in Nagpur. A sales manager from Pune checks in at 1 p.m. for two nights. The front desk executive finds her booking in the PMS, scans her Aadhaar card and gives her room 214, which housekeeping marked ready at 12:40 p.m. The room rate is ₹3,200 a night. That evening, she eats in the hotel's restaurant. The restaurant's point of sale (POS) software sends the ₹850 bill to her folio, so she does not pay at the table. At check-out, the PMS adds up two nights at ₹3,200 with GST at 5%, and the dinner with its own GST, and prints one invoice. Room 214 is marked dirty, and housekeeping is told to clean it.
The PMS also sends data to the other systems. It tells the channel manager when a room is booked or cancelled at the front desk, so that travel sites show the right number of free rooms. It sends each night's bookings and revenue to the revenue management system (RMS), which uses them to set future prices. It sends each guest's stay to the hotel guest CRM.
Older hotels ran their PMS on a server in a back room. Most new ones use a cloud PMS, which runs on the internet and is paid for every month. A cloud PMS needs no server at the hotel, and the owner can see the bookings on a phone. This is why many independent hotels in India have moved to cloud PMSs. Chains often require all their hotels to use one PMS, as a hotel franchise chain does.