Configuring Hurdle Rates

An integrated Revenue Management (yield) solution calculates the actual hurdle rates which OPERA Cloud compares against. The revenue management software fetches data from OPERA Cloud and evaluates changes in occupancy, average rate and RevPAR. Based on these changes, as well as historical and predictive data, the revenue management solution determines hurdle rates, which are then updated in OPERA Cloud. These hurdle rates are used to determine the rate code/room type availability at the time of making a reservation. Hurdle Rates represent the monetary hurdle value calculated by the revenue management solution after considering the information received from OPERA Cloud. This is the value that must be reached for OPERA Cloud to display a rate code/room type on the rate grid. Hurdle rates are sometimes referred to as bid prices or opportunity costs. All values are in your property’s base currency.

Before any consideration is made concerning hurdle rates OPERA Cloud first checks its own rate availability controls to determine whether the rate code is open or closed and visible in rate availability. OPERA Cloud completes the following checks to determine whether or not a rate code is available:

The Rate Code Start Sell and End Sell dates are valid.
Pricing schedule for at least one room type is available for this rate code.
During a Look To Book sales query, OPERA Cloud checks if the proposed reservation falls within the boundaries of these two fields, Max Rooms Sold and Actual Rooms Sold.
OPERA Cloud’s normal rate availability status still applies and therefore the dates must at least be open.

Adding Hurdle Rates

From the Administration menu, select Financial, select Rate Management, and then select Hurdle Rates.
Click New.
1. Property: Enter or select the property.
2. Hurdle Date: Enter or select a date when this hurdle rate is effective.
3. Room Type: Select a room type from the list.
  
  Note:
  The Yield Category is selected in room type configuration.
4. Delta: Represents a monetary value, which is added to the hurdle rate for each additional room sold up to the ceiling. If the hurdle rate is set at $80.00 and the delta is $1.00, for the first room sold the rate value needs to be $80.00 or more. For the second room the rate value needs to be $81.00, for the third $82.00 and more up to the Ceilingvalue, at which time no additional delta values are added.
5. Ceiling: Enter the number of rooms to be sold to which the delta value should be added. For example:
  - Hurdle is $90.00
  - Delta is $5.00
  - Ceiling is 3
    - The first reservation must achieve the hurdle value of $90.00.
    - The second reservation must achieve the hurdle value of $95.00.
    - The third reservation must achieve the hurdle value of $100.00.
    - The fourth reservation must achieve the hurdle value of $105.00.
  All subsequent reservations must achieve the hurdle value of $105.00 until Max Room Sold is reached, at which point the date is restricted.
6. Max Rooms Sold: Enter the maximum number of rooms to be sold for the selected room type.
7. Actual Rooms Sold: Displays the actual number of rooms sold for the selected room type.
8. Length of Stay: Enter a length of stay.
9. Yield Market: Select a yield market type for this hurdle rate. (Available when the Yield Market Types OPERA Control is active).
10. Click Save.

Editing Hurdle Rates

From the Administration menu, select Financial, select Rate Management, and then select Hurdle Rates.
Enter search criteria, then click Search.
Select the hurdle rate in the search result then click the vertical ellipsis Actions menu and select Edit.
Update configuration.
Click Save.

Deleting Hurdle Rates

From the Administration menu, select Financial, select Rate Management, and then select Hurdle Rates.
Enter search criteria, then click Search.
Select the hurdle rate in the search result then click the vertical ellipsis Actions menu and select Delete.
Click Delete to confirm.