The rack rate at hotels represents the highest possible rate a guest may be charged for a room. However, with a little planning, a traveler can easily avoid paying the rack rate.
What Is It?
The rack rate is the full, published room rate and does not contain any discounts. The rack rate also does not take into account any taxes or surcharges. It is generally posted on the wall or door of the hotel room itself as the maximum amount the hotel may charge for the room.
When Is It Charged?
In many instances, the rack rate is quoted when calling a hotel for a reservation. Without further prodding, the telephone reservation agent may not offer an available discount rate. The rack rate is also charged when a guest arrives without a reservation and requires a room for the same night. As a result, the rack rate is also commonly known as the "walk-up rate."
An advance reservation is the best way to prevent paying the rack rate. Hotels utilize yield management in the same fashion as the airlines and regularly adjust room rates based upon demand. If rooms for a given period of time are being reserved quickly, the hotel will continue to increase the rate up to the maximum, or rack rate.
Ask for a Discount
Reservation agents are able to search for discounts and offer them to the caller when requested; not asking for a discounted rate will result in the rack rate's being quoted. Membership in certain organizations such as the Automobile Club or AARP provides discount benefits at many hotel chains.
Use Online Discounts
Internet booking sites offer many discounts to travelers making reservations through their interface. The hotel's own website will also offer discounts off the rack rate, with higher discounts often available for prepaid, nonrefundable rooms. Opaque booking sites offer significant discounts during slow periods for hotels or at the last minute if rooms are still available and would otherwise remain empty.