MSPeconomist

This would seem to benefit the hotel only if they have never accepted reservations on that date at a lower rate. The idea behind the guaranteed room (or a guaranteed seat on a full plane) is that it can pay the hotel--monetarily and in terms of goodwill from the high tier elite--to find someone without status who has a reservation at a low price. The other person is denied boarding or walked, with minor compensation, so that the space can be given to the elite who pays full price. For a hotel, selling a room at the guarantee (rack) rate is better than not doing so unless all of the hotel's other guests are paying an even higher rate (approximately, need to adjust for the cost of walking the unlucky person).