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When I'm travelling, I often see hotel room rates posted on the back of the hotel room door (typically in the US) or in the lobby, behind the check-in desk. These rates are typically eye-wateringly high - $/£/€100s above what you would pay even for a fully flexible regular "rack rate" on the hotel's website, and probably more even than you would be charged if you walked off the street and asked for a room (although I rarely do that!).

What are these rates for? I assume they must be a legal requirement of some sort; perhaps they are a legal maximum?

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What country is this in? –  Karlson Feb 6 '13 at 15:07
    
Karlson, I've definitely seen it in the US, and I believe some European countries (Germany, Switzerland?). –  Andrew Ferrier Feb 6 '13 at 15:16
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Don't recall this in the hotels I stayed at. The only thing I remember is the evacuation plan. –  Karlson Feb 6 '13 at 15:18
    
The European ones I'm less sure about (as in, I'm sure I've seen it in Europe, just not sure which countries). But I've never stayed in an American hotel where this hasn't been behind the door. –  Andrew Ferrier Feb 6 '13 at 15:19
    
I've seen it in Europe multiple times. My guess for that is that it's the actual price, back in the day it was used but now I suppose it's not the case with all the pricing management rules –  Vince Feb 6 '13 at 15:34

2 Answers 2

up vote 18 down vote accepted

California, USA is one place where you see these posted rates.

I believe this is to comply with Civil Code Section 1863:

(a) Every keeper of a hotel, inn, boardinghouse or lodginghouse, shall post in a conspicuous place in the office or public room, and in every bedroom of said hotel, boardinghouse, inn, or lodginghouse, a printed copy of this section, and a statement of 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). For any violation of this subdivision, the offender shall forfeit to the injured party one hundred dollars ($100) or three times the amount of the sum charged in excess of what he is entitled to, whichever is greater. There shall be no forfeiture under this subdivision unless notice be given of the overcharge to such keeper within 30 days after payment of such charges and such keeper shall fail or refuse to make proper adjustment of such overcharge.

I assume the intention was to prevent things like price gouging for distressed travelers, special events, or customers the management sees as undesirable (e.g. racism). However, as you point out, hotels often set this rate very high, so that they can charge high rates when they want, and claim everyone else is getting a discount.

Given this, I'm not sure why they stop at prices that are 3-5 times the actual rates; why not post a rate of a million dollars per night, and have complete freedom? There may be some additional regulations that I don't know about.

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This guy seems to broadly support your answer: travel.booklocker.com/2012/10/25/… –  Andrew Ferrier Feb 6 '13 at 15:39
    
yes, and the same is true for many/most other states. And chains with branches in the US will have it turned into company policy as a result. As to the actual rates posted, most are pretty much the rate you'd pay if you were to just walk in the door one evening and ask for a room. Prebooked rates are (almost) always lower, the hotel trading income for income security. –  jwenting Feb 7 '13 at 7:56
    
@jwenting: On all occasions when I've walked into a hotel and asked for a room without having prebooked, I've still paid far less than the rate posted on the door. The same when I've booked just a few hours in advance. –  Nate Eldredge Apr 24 '13 at 23:05
    
What I don't understand, is how these laws ever came to pass? It seems obvious that hotels will just post extremely high rates that are never charged. Is there any requirement of the hotel to show that they actually charge the posted rate in any circumstance? –  epsalon Dec 13 '13 at 3:25

You may actually be asked to pay this amount if you ask for a room at the reception. It happened to me once in Hong-Kong. We had 2 nights booked over the internet, and wanted to extend our stay. The manager at the reception advised us to go to an internet cafe round the corner and do the booking there...

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I'm surprised by this. The rates I've seen on the doors have been well above even the standard fully flexible rate on the website (or well above what anyone would reasonably pay for that hotel). I'm also confused why the manager would ask you to do this. Surely he has a lot of flexibility in the rate he charges you? –  Andrew Ferrier Feb 8 '13 at 17:07
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@AndrewFerrier, I was surprised as well. He claimed he can't do anything... –  Grzenio Feb 9 '13 at 20:26

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