Originally Posted by 59Impala

I've worked for 28 year in the airline industry, this practice is normal. Hence my thought it could be similar in the hospitality business.
your point ("it's no like you can book the base room for $") would actually support my theory. The base room category is already oversold, and they have planned upgrades to higher categories (e.g. for the Globalists), and to cover those upgrades, the sellable amount of higher category rooms is reduced.

This is exactly how it works with the airlines. Say physical capacity is 40C and 200Y class seats, but they don't expect much C class sales but more than 200 Y class, so they actually show inventory as e.g. 30C and 210Y. Now if they have sold 200 Y seats and someone cancels an award flight in Y, I doubt that would go back to inventory.