Although hotel guests may not know a hotel’s PBX by its name or know that “PBX” stands for “Private Branch eXchange,” they benefit from the PBX every time they use speed dial on their room phone to chat with the front desk, place a room service order, or request a wake-up call.

While few guests use their room phone to place an outside call, hotels can still use their hotel PBX to deliver a positive guest experience. A hotel PBX, whether premise-based or hosted (we will address these distinctions below), benefits guests by providing easy access to guest services. These include the aforementioned room service and wake-up call requests as well as the all-important emergency/E911 calling (access to which also happens to be required by federal law).

Given current staffing challenges (the leisure/hospitality industry’s 9% unemployment rate in August was the second highest across all industries), hotels must now support their guests using fewer staff members. The PBX can utilize functionalities like Automated Attendant and Interactive Voice Response (IVR) to assist guests without in-person interaction from a hotel staff member. In the article “Five Essentials for Present Day Hotel Operations,” Cedar Hospitality Partners CEO Antoine Berberi recommends outsourcing as a vital way to cut labor costs. “Focus on the things you can do well and that you make a difference in your operation,” he writes. “Outsource the rest.” This is exactly how many hotels use their PBX.

If you are considering such a system for your property, whether opening a new hotel or looking to replace an old and/or failing PBX, below are a few things to consider as you evaluate your options.

Deciding Between a Hosted PBX vs. Premise-Based PBX

When considering what PBX to purchase for your property, you must first decide whether a hosted (aka, cloud-based) or premise-based PBX is a better fit for your property. Regardless of your decision, neither your guests nor staff will know which type of PBX is in place, nor should they. Theoretically, a hosted PBX will have less physical equipment onsite. However, unlike older premise-based PBXs, the amount of onsite hardware of new, premise-based is much lower.

While the controller of a hosted PBX is hosted at the provider’s data center(s), all premise-based PBX servers, including the main controller, are located onsite at the hotel. Both types of PBXs offer advantages, so you should make your decision based upon what works best for your hotel. Read on for factors to consider when determining the best choice for you.

With a premise-based PBX, the total cost of ownership is usually lower, especially the longer the PBX is in place. Premise-based PBXs typically come with a one-year warranty, and once that is over, the hotel can choose to sign a full-coverage, extended warranty agreement; a manufacturer software support agreement; both; or neither, instead opting for a “Time & Materials” support coverage model (aka, pay if and when you need service). Since PBXs are essentially computers, many hoteliers opt for the Time & Materials model after their warranty ends, paying only for lower cost, manufacturer-only software support.

In contrast, hotels pay for monthly support (aka, monthly recurring cost) with a hosted PBX beginning the day the system is installed and continuing as long as it remains in place. Thus, hosted PBXs are always under a support agreement, and upgrades are included at no additional cost, so the PBX always has the latest available features.

While a hosted PBX requires that the vendor’s SIP telecom services be in place, a premise-based PBX can use the vendor’s SIP services or traditional PRI, T-1, and/or copper (“POTs”) trunk lines. Regardless, SIP trunking services should be utilized, as they provide the best “bang for the buck” for hotels.

Should you have questions regarding the above, “telecom services” information, or other details included in this post, please reach out to, and we will be happy to discuss your questions with you.

From a technology standpoint, even though higher-end, premise-based PBXs (e.g., Mitel) have improved considerably, hosted PBXs still provide the best current and future applications, the ability to interface with other technologies, and support for multiple properties. Additionally, if you do not expect to hold the PBX for more than three years, hosted PBXs usually have a lower acquisition cost.

However, hoteliers who are looking for a solid, long-term solution that will provide the hotel with the best value should opt for a premise-based PBX. Upon installation of a premise-based PBX, you should take advantage of the “free” one-year warranty and manufacturer support coverage and then opt for minimal, post-warranty support coverage, such as manufacturer software support.

After deciding to purchase a PBX either for installation in a new hotel or for modernizing an existing hotel, you must decide on a communications provider partner. Here are a few things to look for as you make that choice

Good Listening Skills: First and foremost, find a partner that listens, understands your priorities and specific needs, and offers clear guidance. Your provider should offer both hosted and premise-based options and should help you decide on the perfect fit for your hotel.

Respect for History: It is an advantage if your provider supports older, “legacy” PBXs and understands that maintaining current equipment is the best short-term solution in some cases.

Great Relationships: Your provider should partner with top-rated hospitality PBX and voice technology leaders, such as Avaya, Hitachi, Mitel, NEC, and Nortel for legacy PBX support, as well as Mitel for new, premise-based system sales.

Flexible Options for Your Industry: It is also advantageous if your chosen provider offers both premise-based and hosted PBX solution options, made exclusively for the hospitality industry. Hotels are not office buildings, and their needs are different from other industries. Choose a partner with a reputation for excellence in hospitality.

Reliability: Find out what your provider offers in the way of failover should you experience a system outage.

Value: A partner who can increase the productivity of your resources, immediately lower operating costs, and provide guests with superior communications experiences saves you money now and well into the future. Ask for an audit that can help you understand enhancements you can make to reduce your communication expenses today.

Integration: Make sure your PBX integrates with all major property management system (PMS) providers, including Oracle, MSI, Galaxy, FOSSE, OnQ, and Sabre, to name a few. If you change your PMS system down the road, you want your PBX to keep up!

Support: When technical issues interrupt communications, you’ll want the industry’s best support technicians to resolve the issues 24/7—nationwide, remotely, or on-site. Don’t settle for multiple support calls and slow resolution.

Learn More About Cloud5’s Hotel PBX System

To learn how Cloud5’s hotel PBX system is built for hospitality, watch our short overview video. Whether you opt for a hosted or a premise-based PBX, Cloud5 has offerings to fit the unique needs of your properties.

Lastly, if you’re considering other ways to fulfill—and exceed—guest expectations with fewer staff resources, consider Cloud5’s Internet solutions, managed IT services, and contact center services. Contact us today to discuss how Cloud5 can support all your hotel’s communications needs.