Rooms are the entities that users can create bookings for.
Some room information (e.g. owner, location, photo and any custom fields) will be visible to users when clicking on the room from the bookings page.
The Room owner setting allows you to designate a user account as the 'owner' of that room. This gives the user the special permission of being able to delete other user's bookings in their room. Selecting a room owner is entirely optional.