Last Room Value
Last Room Value, usually shortened to LRV, is the lowest rate you are willing to accept for the final available room on a given night.
The idea behind it is opportunity cost. If you have one room left for Friday and someone wants it at a discount, the question is not whether that booking makes money. It is whether accepting it costs you a better booking that would otherwise have taken the room, including the rest of a multi-night stay it might have brought with it.
LRV puts a number on that threshold. Anything below it gets refused.
Where you meet it
LRV is normally calculated by a [[Revenue Management System (RMS)]] and applied as a control in the [[PMS]] or channel manager. It commonly works alongside two other controls:
- Overbooking limits, which set how far past full you will sell
- Minimum length of stay, which stops a one-night booking blocking a profitable three-night one
Newer integrations write these values back into the PMS automatically rather than leaving someone to enter them by hand.
What to watch
LRV protects revenue by turning bookings away, which is uncomfortable to watch in real time. A front desk seeing empty rooms will want to override it, and sometimes they should.
Agree in advance who is allowed to override an LRV and when. If the threshold is overruled routinely, it is not doing anything, and it is worth asking whether the number is wrong rather than the people ignoring it.