What is the purpose of hurdle revenue?

The purpose of hurdle revenue is primarily to filter out excess demand. In the context of revenue management, hurdle revenue represents a pricing threshold that a provider sets, which helps to determine the optimal price point for a given service or product. By establishing this hurdle, businesses can effectively control the demand they receive, ensuring that they do not exceed capacity or overbook their resources.

This approach allows businesses to maintain an equilibrium between price and demand, optimizing their revenue without compromising customer satisfaction or service quality. Essentially, by setting a hurdle that must be met for a transaction to occur, businesses can manage demand flows and ensure profitability, particularly during peak times or high traffic periods.

The other choices focus on different aspects of business strategy, such as room rate maximization, flexibility in booking, and staffing cost management, but they do not directly align with the primary function of hurdle revenue in effectively managing and filtering demand based on pricing strategies.