As others note:
1. Economy on screech.
2. The policy is apparently not hurting business.

In addition, many large corporate contracts waive the policy and substitute either 24 hours or sometimes 4 or 6 PM local day of arrival. It's the one-off customer or smaller business which is paying this.

To be fair, if you are looking for a room and see a property as sold out, you move on. This policy will cause people to book once they know what they need and will leave last minute high-rate rooms available for people who want to book and use them. Not really different than most typical US domestic penalty air fares.