Businesses sometimes plan spontaneous trips for sudden growth opportunities. It becomes difficult to find a vacant room during peak season and at the last minute, and that too at a discounted price. This is why, companies hire travel management companies for hassle-free travel. The travel managers specialize in booking accommodations for business travelers at discounted prices at the end moment. Hotels and hotel chains generally provide an option of LRA (Last Room Availability) to travel management companies that can sometimes prove to be beneficial to all the parties involved.
What is the hotel last room availability?
Last room availability is a contract between the hotel chain and the travel management company that mentions the clause to provide the vacant room at a predetermined rate irrespective of any peak season or demand fluctuations. According to this contract, the hotel cannot deny the TMC to provide a room at the price they settled for earlier as long as there is one room available.
This particular facility was introduced to occupy the business traveler segment who are always in need of accommodations even during busy periods. By providing this facility, the hotels ensure to maintain a strong business relationship with the corporates and travel management companies.
Advantages of last room availability
1. Guaranteed accommodation
Regular travelers are aware of the fact that it is very difficult to get a room at their destination during high demand. This contractual arrangement guarantees the stay of a certain customer in their property even during high-demand periods or when availability is limited. This facility especially benefits corporate clients, special guests, and individuals having specific accommodation requirements. Although the contract is generally limited to certain types of rooms.
2. Customer Satisfaction
By having a pre-contractual agreement with the hotel chains, the customer is certain that they will not be turned down during check-in. The LRA agreement ensures that the customer will have access to a room whenever they want to travel for business. This helps in building customer loyalty and satisfaction. The hotel can benefit from repeat bookings from such companies.
3. Competitive advantage
LRA’s guaranteed accommodation can be a differentiating factor for hotel chains. It attracts many corporate clients and travel management companies who prioritize certainty over money. These hotels are classified as reliable and customer-centric as they provide hotel room assurance at a pre-determined price even during high-demand periods.
4. Increased revenue
LRA attracts many repeat customers due to the fact that they can have access to guaranteed to stay at the hotel and that too at a discounted rate irrespective of high demand season. The hotel chains generally charge a fixed rate over the basic room price. It might be less expensive during peak season, but the same amount is charged during the off-season which in turn leads to increased revenue. By having a good business relationship with the company and travel management company, the hotels maintain regular customers.
Suggested Read: Top 8 Tips To Streamline Hotel Group Booking For Corporates
Disadvantages of last room availability
1. Revenue optimization
The hotels have the opportunity to charge high during peak demand periods. LRA may restrict such ability of the hotel as they are liable to provide hotel rooms to the travel management companies as and when they need one. This can sometimes lead to missed revenue opportunities and lower overall profitability.
2. Impact on walk-in guests
If a room is reserved under LRA policy and a customer walk-in into the hotel, the hotel will not be able to provide accommodation for the same. They’ll need to turn down the customer which can lead to customer dissatisfaction or negative reviews. The ratings serve a huge role in the hotel business and one negative review can badly influence the hotel’s market value.
3. Expensive rooms
Hotels charge a premium on their LRA agreements in order to provide a last-minute room to the clients of travel management companies. Hence, it sometimes costs more than booking the hotel without any agreement.
4. Operational challenges
It is a rather hard job to maintain the inventory of the hotel rooms under LRA. The hotel management needs to handle online bookings, walk-in customers as well as LRA clients. They need to ensure that the room is not double-booked to avoid any unforeseen problems. Otherwise, it can lead to potential operational complexities and customer dissatisfaction.
LRA vs NLRA
NLRA stands for Non-Last Room Availability. In contrast to the LRA agreement, the hotel is not liable to provide a room to the customers of travel management companies till the last room is booked under NLRA. They can even charge competitive rates according to the demand season and availability. However, the TMCs will still be charged with a preferential rate in comparison with the rest of their customers. It not only helps in revenue maximization but also helps in maintaining good business relationships with travel management companies.
Conclusion
LRA has become a universally practiced agreement that provides convenience to business travelers that are looking for accommodation for a spontaneous corporate trip with all the facilities they need. Hiring a travel management company can provide them access to such exclusive offers where they can book a high-end room at a discounted price with the help of LRA.
Suggested Read: Corporate Lodging Solutions: Perks On Hotel Bookings
Last Room Availability FAQs
Can LRA provide access to all rooms in a hotel?
It all depends on the contract. The hotel usually reserves certain types of rooms for the LRA policy to serve their regular customers as well.
Who benefits from LRA?
LRA benefits all the parties involved in some way or another. Corporate clients get the best deal for hotel rooms at unexpected times. The TMCs and hotel chains get customer loyalty and good business relations with the company.
Is LRA a standard practice in all hotels?
No, LRA is not universally practiced by hotels. However, some hotels provide NLRA agreements to their clients where they do not guarantee a fixed rate at any given time.
Can hotels change their LRA policy?
Yes, the contract of LRA is between two parties and they both can modify or cancel the contract. The hotels have the power to make changes in the agreement as long as it is officially communicated to the concerned TMC.
