Doesn't that only apply if you have previously paid in full for the room? If I'm wrong I want to know.

Hotels and other travel companies operate on a similar notion of counting on all that book, don't necessarily show up. It's built into the pricing. Often, you have lower rates for those who book very far in advance because it may be more likely those people don't show up. Sometimes there is a deposit or other fee you get stuck with for not showing up. I didn't know holding empty rooms in case someone shows up was a thing. It blows my mind that a customer with cash in hand would be turned away after midnight for a "person that might come."