What does "rack rate" refer to in hotel terminology?

"Rack rate" refers to the standard rate for a room in a hotel, which is the price that a hotel establishes as its full price for a particular room type before any discounts, promotions, or other pricing strategies are applied. This rate serves as a baseline for pricing and is often used as a reference point for determining discounted rates or special offers.

The significance of the rack rate lies in its ability to give potential guests a sense of the typical cost associated with staying at the hotel. While guests may pay less due to various promotions or when booking through specific channels, the rack rate remains an essential aspect of hotel pricing strategies and helps hotels manage their revenue effectively. Knowing this helps guests understand the value of potential discounts they may receive compared to the standard price.