A rack rate (also sometimes called a walk-in rate or retail rate) is an officially published price for a hotel room with no discount applied. It’s a standard night rate for a certain room type for a specific season that hotels expect to charge their guests.
With a dynamic pricing approach as part of the hotel’s revenue management strategy, rates fluctuate daily and are calculated on the basis of the rack rate, depending on market conditions and overall pricing strategy. Besides that, travel agents, tour operators, wholesalers, and other resellers negotiate discounted prices and then offer travelers rates that are lower than the hotel’s published rack rates.
Other discounts can apply to rack rates such as group booking discounts, loyalty program offers, and so on. Premiums on top of rack rates may also be charged, for example, on the days of special events or holidays when demand is the highest.