You’ve checked in to your hotel and your room is ready. Before you unpack (does your room have a dresser? If not, here’s why), you decide to get a lay of the land.
- You know your hotel hasn’t been reported for bed bugs because you checked, but you look at all the places where they tend to hide, just in case.
- Your in-room safe is electronic – welp, you know how unsafe those safes can be, so you definitely won’t be using that.
- Your electronic thermostat is set for 72, but there’s no way it’s actually that cool in the room, so you look up the hack so the room temperature will be where YOU want it to be.
- You check in the bathroom and discover the water pressure in the shower is crap. You know how to hack it, but since you’re only staying for 1 night, decide not to bother.
Rack rates
Your next step is to look at the map on the back of the door so you know where to go in the event of a fire. Then, depending on what state you’re in, you also see the rack rate for your room.
PC: Nancy B.
In case, it’s hard to read, these are the rack rates, from 1/1/2018 through 12/31/2099, as printed on the page:
| Single | Double | Double | |
| One Person | Two in one bed | Two in two beds | |
| Daily | $1,000.00 | $2,000.00 | $2,000.00 |
| Weekly | $7,000.00 | $7,000.00 | $14,000.00 |
| Extra Person | $500.00 | $500.00 | $1,000.00 |
The above photo was recently taken in an actual hotel in Florida, the OYO Waterfront Hotel – Cape Coral/Fort Myers.
Just for the record though, the OYO Waterfront Hotel – Cape Coral/Fort Myers is not the type of place that would ever charge $1,000 to $2,000 per night. On its own website, it’s charging $105. Booking.com lists it at $90/night. And Trivago can get it for you for $64. And no wonder – it’s rated 2.5 stars on TripAdvisor, where it’s also listed as the #7 of 7 hotels in Cape Coral, FL.
On top of that, the OYO Waterfront Hotel – Cape Coral/Fort Myers doesn’t get very good reviews. In fact, recent (all 2024) TripAdvisor reviewers use the word “dirty,” “horrible,” “unsafe,” “rude,” and “uncomfortable,” with “misleading marketing.” With those kinds of assessments, I think the only reason they’re getting away with charging even THAT much is because of its location. Hotels in beach towns, especially when they’re water adjacent, tend to get more money.
Anyway, it’s advertised as a “boutique hotel,” but based on the history I can find about the building, it’s really just an old extended-stay motel (here are the differences between a hotel and a motel) on a canal. They slapped an OYO label on it when it most recently changed owners a couple of years ago (originally built in 1985, the building was sold in 2002, 2015 and 2017, according to Remax).
So how does a 2-star hotel get off potentially charging $1000-$2000 per night?
How?
It all has to do with legalities. Many states have statutes on the books that require “rack rates” (the most the hotel will charge) to be posted somewhere in the room or in a public space.
The laws in question are decades old, written during the times when hotel room rates didn’t fluctuate much, there was no internet to do online booking, etc. The only way to find out a hotel rate was to call or just stop in. The laws were intended to prevent hotels from gouging customers, especially during natural disasters. It was thought this would also stop discrimination by charging someone of a different race, religion, gender, etc., a ridiculously high rate as a way to discourage them from renting a room there. This way, customers would know the “ceiling”/rack rate.
About half the states in the US have such laws. Here’s how they read in some of the states with the most tourists:
California
As per Civil Code Section 1863), “(a) Every keeper of a hotel … shall post … in every bedroom of said hotel, boardinghouse, [or] inn, a printed … statement of the rate or range of rates by the day for lodging. … (b) No charge or sum shall be collected or received for any greater sum than is specified in subdivision (a).”
Florida
“In each public lodging establishment renting by the day or week there shall be posted in a plainly legible fashion, in a conspicuous place in each rental unit, the rates at which each such unit is rented. Such posting shall show the maximum amount charged for occupancy per person; the amount charged for extra conveniences, more complete accommodations or additional furnishings; and the dates during the year when such charges prevail. … [An] establishment may not charge more than the rates posted in the rental units.”
Nevada
“Every owner or keeper of any hotel … shall … maintain a printed statement of the charge or rate of charges by the day for lodging and make the statement available for viewing, upon request, at the registration desk. … No charge or sum may be collected for any greater or other sum than the owner or keeper is entitled to charge pursuant to the general rules and regulations of the establishment.”
New York
“Every keeper of a hotel or inn shall post in a public and conspicuous place and manner in the office or public room, and in the public parlors of such hotel or inn, a … statement of the charges or rate of charges by the day and for meals furnished and for lodging. No charge or sum shall be collected or received by any such hotel keeper or innkeeper … for a higher rate or charge for the use of such room or board, lodging or meals than is specified in the rate of charges required to be posted by the last preceding sentence.”
The bottom line is that the hotel must keep its rack rates on file with the state and post them conspicuously. Many put them on the back of the hotel room door.
But here’s where it gets interesting
A hotel that charges more than the rack rate on file can be fined. However, it won’t be fined for charging less than what it’s told the state. So hotel managers have learned to get around the law by making sure the posted rates are much higher than what they would ever actually charge for the room.
So, rooms at the crappy, 2-star OYO Waterfront Hotel CAN be sold for $1000/$2000. But they never will.
They could change the laws, but that would be more trouble than it’s worth. So the hotels continue to claim these exorbitant maximum prices and never charge them.
In other words, those posted rates you see in hotel rooms are pretty meaningless.
***Many thanks to Nancy B. for mentioning this topic and for her photos!
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