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Last Room Value

IDeaS Revenue Management Systems (RMS) produce a rate availability control called Last Room Value (LRV). LRV is a value-based control against which all reservations are compared. In general terms, the value of the reservation must be equal to or greater than the value of LRV for the reservation to be accepted.

The primary advantage of using LRV controls is that they automate rate availability for Revenue Managers. Below are the key characteristics of LRV that you should understand:

  • LRV can be delivered by IDeaS RMS at either Room Type or Room Class level, but never both.
  • LRV decides the availability of certain rate codes based on yieldability and LRV value.
  • LRV is applicable to transient only business (non-group block business).
  • LRV is a value, not a selling rate to be applied.
  • When demand is less than capacity, the LRV could be sent as 0.00 but will never be a negative value.
  • Yieldable rates lower than the LRV value are unavailable for sale.
  • Yieldable rates equal to or greater than the LRV value are available for sale.
  • IDeaS RMS sends LRV decisions as a full overlay for all room types/classes within the systems configured Business Day End (BDE) or Intra-Day Processing (IDP) decision window.

For implementation of LRV at the Room Class level, a selling system needs to have the ability to group similar value room types into a single bucket (room class) to receive LRV at this level.

Enhanced Functionality for Last Room Value within the Selling System (optional):

  • Yield Status configurable for rate codes: Yieldable or Non-Yieldable.
  • Yield Status configurable for room types: Yieldable or Non-Yieldable.

Functionality of Last Room Value

Hurdle: A value provided by IDeaS RMS that is used to assess the minimum available rate values for a room type or room class. The RMS delivers the Hurdle in the Selling Systems base currency.

The Selling System needs to use its own currency translation service to convert the Hurdle value for rates in other currencies, if applicable.

Delta: A value provided by IDeaS RMS that is added to the Hurdle for each room sold or subtracted when a reservation is cancelled.

Ceiling: A value provided by IDeaS RMS that states the maximum number of reservations taken before the Delta stops increasing the Hurdle value.

MaxSold: A value provided by IDeaS RMS that states the maximum number of rooms that can be sold in the given Room Type or Room Class before availability is closed.

Counter: The Counter tracks the incremental number of rooms sold/cancelled for all transient rooms, by each occupancy date and for each Room Type or Room Class. This feature is implemented in the Selling System.

IDeaS Last Room Value Calculation

The Last Room Value formula is calculated at either Room Type or Room Class Level for each occupancy date:

    Effective Hurdle = Base Hurdle + (Delta * [Counter, Ceiling], MaxSold)