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You've probably heard the term PBX thrown around a lot, but you may not know exactly what it is. A PBX, or Private Branch Exchange, is a telephone system used by businesses to manage and route calls.

In this guide, we'll explain everything you need to know about PBX systems including what they are, what they do, and how they work. We'll also cover the different types of PBX available and explain why you might want to use one in your business.

What Is a PBX System?

A PBX, or Private Branch Exchange, is a business phone system that allows employees to make internal and external calls.

PBX systems do a variety of things, depending on the type of system you have. But generally, they route calls, provide features like hold and transfer, and allow employees to use their office number on their cell phones.

How does a PBX work? It depends on the type of system you have. But generally, the PBX system will be connected to your phone lines and your employees' phones will be connected to the PBX. When someone makes a call, the PBX routes the call through the appropriate channels and connects the caller to the person they're trying to reach.

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What Does a PBX System Do?

A PBX system connects all of the telephone lines in an office and provides features like voicemail, auto-attendants, and conference calling.

What a PBX does is centralize all of the office's telecommunication needs. This way, employees can call each other without having to remember long phone numbers, and they can easily access voicemail messages from any phone in the office.

Additionally, a PBX can provide a host of features like auto-attendants and conference calling. With an auto-attendant, callers can be routed to the right person or department without ever having to speak to a human. And with conference calling, employees can easily host video or audio conferences with people from all over the world.

How Do They Work?

So we've talked about what a PBX is, what they do, and why you might need one. But how do they actually work?

Well, a PBX is essentially a telephone exchange that allows you to use extension numbers to make calls. When someone calls your office number, the system will recognize the extension and route the call accordingly. This also allows you to have multiple extensions for different departments or staff members, without having to purchase multiple phone lines.

Another great feature of PBX systems is their ability to connect to the internet. This means that you can use your phone system anywhere in the world, as long as you have an internet connection. This is a great option for businesses with remote employees, or those who travel frequently.

Why Use a PBX?

There are a few key reasons why you might want to consider using a PBX in your business.

For one, these systems can help you save money on telephone costs. With a PBX, you can make internal calls between extensions for free, which can save you a lot of money on long-distance and international calls.

PBX systems can also improve communication and collaboration within your team. With features like voicemail to email, call recording, and conference calling, you can easily keep in touch with your team no matter where they are.

And finally, a PBX offers a lot of flexibility and customization options. You can choose the type of PBX that's right for your business, whether it's an on-premise system or a cloud-based system. You can also tailor the features and functionality to meet your specific needs.

Types of PBX

There are two main types of PBX systems: on-premise and cloud. On-premise PBX systems are installed on your company's premises, while cloud PBX systems are hosted by a third party provider.

On-premise systems have a lot of advantages over cloud systems. Firstly, they're typically more affordable, as you're not paying for the added costs of hosting and maintenance. They're also more customizable, as you can tailor them to your specific needs. However, on-premise PBX systems require regular maintenance and updates, which can be a hassle for some businesses.

Cloud PBX systems are much simpler to set up and manage, as all the maintenance and updates are handled by the provider. However, they can be more expensive than on-premise systems and are less customizable.

So, which type is right for you? It really depends on your needs and budget.

How Hotels Use PBX Systems

Now that you know all about PBX systems, let's take a look at how they're used in the hotel industry.

Most hotels use PBX systems as a way to manage and route calls. Calls can be routed to different departments or extensions within the hotel, which allows guests to speak to the right person quickly and easily.

Hotel PBX systems can also be used to record calls, which is beneficial for both the hotel and the guest. For the hotel, it allows them to track and monitor customer service interactions. For the guest, it provides a way to capture important conversations in case there is a dispute or problem with their stay.

Finally, a PBX can be used to provide access to special offers and discounts for guests. This is a great way to encourage guests to book direct with the hotel rather than through a third-party website.

What to Look for in a PBX System

When it comes to choosing a PBX, there are a few key factors to keep in mind. Here are some of the most important things to look for:

1. Ease of use: The system should be easy to set up and use, with a simple interface that's easy to navigate.

2. Flexibility: The system should be able to grow with your business, and be able to accommodate new users and add-ons as your company expands.

3. Compatibility: The system should be compatible with your current devices and software, as well as with any future devices or software you may need.

4. Scalability: The system should be able to handle increasing call volumes and bandwidth requirements as your business grows.

5. Security: The system should include features like password protection and encryption to keep your data safe and secure.


A PBX can be an extremely valuable investment for your business. By understanding what they are, what they do, and how they work, you can make an informed decision about whether or not a PBX system is the right fit for your company.

Cory Masters
By Cory Masters

Cory Masters is a dynamic professional with 10+ years of experience working across hotel and hospitality management, accounting, financial management, office management, and operations. She's passionate about elevating other professionals in the community, using her 4 years as an Assistant Hotel Manager at Four Seasons to share the lessons she's learned about managing guest interactions, reservations, hotel staff, hotel services, hotel management systems, and more.