What Exactly is a Hotel Rack Rate?

SPG has a rate called the “Rack Rate” that we usually don’t hear about. Instead, the rates we deal with are usually called the Lowest Standard Rate, AARP Rate, Automobile Associate Rate, or Corporate Account (SET) Rate, among others. With the exception of the “Rack Rate,” these are pretty self-explanatory.

So what exactly is a Rack Rate? Think of it as the MSRP when you’re buying a car. No one in their right mind pays the MSRP for a car – instead you negotiate for a lower and much more favorable rate. The Rack Rate is a rate you hope to never pay, except in extreme circumstances.

A few weeks back I was looking for a hotel in Downtown Los Angeles for one night because I have to be there in the early morning, and absolutely hate commuting from Orange County. The two hotels I was looking to stay at happened to be sold out. Just my luck…

But then I remembered a particular benefit of being an SPG Platinum member:

“Guaranteed room availability when your room is booked by 3 p.m., 72+ hours prior to arrival.3″

Yes…that little “3” at the end of that sentence is a rather large caveat that reads “Applicable to one standard room booked by 3 p.m. local time 72+ hours before day of arrival at participating hotels. Member must pay regular RACK rate. Black out dates apply. Not available at resorts. Room upgrade and Free Night Award redemption do not apply when this benefit is utilized. Minimum length-of-stay requirement must be met.”

So I COULD stay at either of the two sold out hotels if I was willing to pay the Rack Rate, and would not get upgraded assuming it wasn’t a black out date. Okay…so how much is this Rack Rate? I searched all over the SPG website and Google and could not find it for these hotels. I decided to ask SPG’s Twitter team, because they’re usually extremely responsive and helpful. They replied immediately, as always. Here are our Tweets:

Me: @spg Can you tell me the RACK rate for the Sheraton Los Angeles Downtown hotel? I might want to use my “guaranteed availability” benefit.

SPG: @TravelSummary We can if you DM us your phone number and best time time to reach you.

Me: @spg Wow didn’t know it was top secret info. DM on its way.

SPG: @TravelSummary Not top secret 🙂 We are just unable to quote rates (even rack) via twitter.

Me: @spg Oh okay that makes sense. Is there a reason it’s not listed on SPG website?

SPG: @TravelSummary The RACK rate would only show online if the hotel was extremely close to full & rooms were actually going for that rate.

After the Direct Message on Twitter and the ensuing phone call, I learned the Rack Rate for the Sheraton Los Angeles Downtown hotel is a whopping $349. I’d have to call the concierge to book it if I was interested, which I no longer was…just too rich for my blood.

But hey…at least we learned how the SPG Rack Rate works!

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