What is the meaning/ definition of Rate Hurdle in the hospitality industry?
The term Rate Hurdle also known as Lose-It Rate refers to a type of rate that sets a threshold that must be crossed by the channel manager to reserve a room. It generally frames the case at which a hotel is better off leaving the room vacant than to sell it. Hotels commonly do this in peak times in advance of reservations. The Hurdle Rate helps informing that rooms should be sold to whom, when and at what price to achieve maximum profitability for a hotel.
A hotel calculates this rate if it plans on selling the rooms individually or to a group at a higher rate closer to the date.
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