What is Rack Rate?
The rack rate is the standard published price for a hotel room before any discounts, promotions, or negotiated rates are applied.
The rack rate is essentially the "sticker price" of a room. Few guests actually pay the full rack rate — most receive some form of discount through corporate agreements, online travel agencies, loyalty programs, or direct booking promotions. However, the rack rate serves as the baseline from which all other rates are calculated.
Why Rack Rate matters
Your rack rate sets the ceiling for your pricing. Setting it too high makes your discounted rates look like deals. Setting it too low limits your revenue potential. Most revenue management strategies revolve around how far below the rack rate you go and for whom.
Related terms
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