What is the meaning / definition of Last Room Value in the hospitality industry?
The term Last Room Value (LRV), refers to the maximum revenue a hotel can expect to make from the last room it has available for sale. It is used to avoid selling the last room below a certain rate – as when market demand is high the last room may be sold at a higher rate then normal.
The calculation is part of dynamic pricing practices and is done by revenue management departments of a hotel. Last room value is important in order for hotels to control their prices and inventory efficiently while making a profit. LRV calculations are a standard practice within most Revenue Management strategies.
The system uses the Last Room Value as a restriction control for low value rates, during busy periods. While it opens all rates during slow times.
- Revenue Management
- Dynamic Pricing