Originally Posted by
supatight80
I may be wrong here but if the Hotel has a really high occupancy rate (e.g. 90% up), aren't they paid RACK rate for points reservations which could be higher than 249$?
I'm sure they have a complicated formula to determine what payment is made for reward stays with lots of factors to consider. The bottom line here is the property was not playing by the rules and needs to be reprimanded. I truly hope it wasn't for nefarious reasons.
Originally Posted by
MSPeconomist
It wouldn't be rack rate because the hotel could be completely full and still not have sold any rooms at prices approaching rack rates. Rack rate is a fictional price posted on hotel doors for cases like major national political conventions, sporting events like the SuperBowl, etc. Outside of such times, no one would be paying the rack rate at the typical hotel.
Yes, rack rates are outrageous and probably rarely actually paid. The law calls for a "published rate" be listed for all rooms so it can be used in various cases, such as special events and unannounced extended stays (to encourage departure). It may be aspirational, but not really fictional. Typically the contacts will call for something based upon Average Daily Rate (ADR) that is readily available as a performance metric of a property.