What Is a Rack Rate?
A rack rate is the standard price a hotel assigns to a room type for the year or season, and the benchmark from which its other rates are calculated. In one large US hotel owner's reporting, the rack rate typically applies in high-demand periods and is the highest rate category available (HSMAI Academy glossary) (Host Hotels & Resorts 2025 Form 10-K).
Last updated: October 2026
How a rack rate works
A hotel sets one rack rate per room type and works its other rates out from it. A group of 20 rooms might be offered 20% off the rack rate, for example, while New Year's Eve might carry a 100% premium on top of it. The percentages show the method and are examples only (HSMAI Academy glossary).
Host Hotels & Resorts places the rack rate inside its retail category: the benchmark rate a hotel publishes and offers to the public, typically charged to travelers without access to negotiated or discounted rates (Host Hotels & Resorts 2025 Form 10-K).
The published figure covers the room only. Resort fees, parking and other charges can be added on top (Booking.com for Business).
Why rack rate matters for hotel distribution
The rack rate sits at the top of the rate structure, and in Host's reporting much of the channel business is filed below it. In its 2020 Form 10-K, Host counted rooms booked through online travel agencies (OTAs) as non-qualified discounts, alongside packages, advance-purchase discounts and promotional offers. Bookings through wholesale channels count as qualified discounts, with AAA and AARP rates and loyalty redemptions (Host Hotels & Resorts 2020 Form 10-K). Keeping the same room priced consistently across those channels is a separate question, covered in our post on rate parity in hotels.
A higher published rate shown next to a lower one is a discount claim, and UK rules govern how online accommodation booking sites present it. A strikethrough price or savings claim needs a real like-for-like saving (UK CMA guide for online accommodation booking sites). A "was/now" claim has to say what the "was" price relates to, such as different stay dates or occupancy, and the total price shown must include unavoidable fees and taxes (UK CMA guide for online accommodation booking sites).
In the US, the price posted in the room has a legal job of its own. About half of US states had statutes in 2008 requiring hotels to post rates in the room or a public space (Travel Weekly, 2008). Hotels post rates so high that the actual rate never exceeds them. The idea of a fixed maximum rate is outdated, because rates change every day with occupancy, booking source and the traveler's affiliation (Travel Weekly, 2008). Texas requires a maximum room rate notice in each guestroom, set at what the hotel would charge in a sell-out, and a raised maximum can only be charged once 30 days have passed since it was posted (Texas Hotel & Lodging Association, 2016).
In vacation rentals, the rack rate is the full price at which units are sold before discounts (VRM Intel vacation rental glossary). In short-term rentals the term is rarely used, because pricing is highly dynamic (GuestWisely STR glossary).
Rack rate compared with other hotel rates
| Rate | What it is | How it relates to the rack rate |
|---|---|---|
| Best available rate (BAR) | A daily rate set by occupancy, seasonal demand, local events and competitor pricing (Booking.com for Business); in vacation rentals, the lowest available unqualified rate for each day (VRM Intel vacation rental glossary) | Moves every day, while the rack rate stays fixed |
| Negotiated corporate rate | A rate agreed with companies that bring significant room-night demand | Typically negotiated each year at a discount to the anticipated retail rate (Host Hotels & Resorts 2020 Form 10-K) |
Frequently asked questions
What is rack rate in the hotel industry?
What does rack rate mean when booking a hotel?
What is rack rate pricing?
Can a hotel charge more than its posted room rate?
Do vacation rentals use a rack rate?
Related terms
See all termsWhere Jetstream fits
Every rate a property sells, from the rack rate down to its corporate, package and promotional rates, has to reach each channel correctly. Jetstream builds an AI channel manager that keeps a property's rooms, rates and availability accurate on every channel it sells through, managed from one place.