I can imagine the hotel asking any price under the sun for a room provided by the diamond Guaranteed Room Availability.

The hotel does need to
- bump someone (non-elite) from their reservation
- has some cost with the "walked" guest = reaccomodating at a different hotel

The official t&c about being "walked"
https://www.ihg.com/content/gb/en/customer-care/bwc-lp

A Guaranteed Room*
Upon arrival, if, for any reason, your reservation cannot be honoured, IHG will provide you with a room and transport to another convenient and comparable hotel. We will also pay for the full cost of the first night’s lodging price, plus tax. Any advance deposit will be refunded to you.
*Does not apply to reservations cancelled prior to guest’s arrival; relocation to comparable hotel based on availability.

So the hotel will offer a room to a diamond using the Guaranteed Room Availability but at a high price to recover some of the cost.