It is entirely the hotel’s decision to offer or not to offer a gov rate for any given night. There are dozens of hotels that I’ve stayed at repeatedly on government rates that, at other times, I can’t get a gov rate. It’s a free market and there’s nothing wrong with that.

What is wrong is when hotels offer a gov rate or other perks with a gov rate and then complain about it to the traveler, tell them that they’re losing money, or flat out tell them that they can’t give them the rate that they booked. That’s where legal and contractual issues come in, and frankly it’s just plain bad for business.

If the hotel doesn’t want to offer gov rates for a particular night or nights, they don’t have to, so if they don’t like them, just don’t offer them. That way they avoid angering their customers.