Q: I have always wondered why some hotel rooms have signs on the back of the door posting room rates. Why are those rates always two or three times as much as I am paying? In other hotels, I see the list of rates on a wall near the front desk. I always do a double take when I see those signs, as the rates are also much higher than I am paying or would ever pay. What is the point of the signs in the room and at the front desk? Does the hotel want me to think I am getting a bargain? Does anybody really pay the rates on the sign?
A: About half of the states have statutes that require rates to be posted somewhere in the room or in a public space. Each state's law is a little bit different; here are examples from four of the biggest travel destinations:
• California: "(a) Every keeper of a hotel ... shall post ... in every bedroom of said hotel, boardinghouse, [or] inn, a printed ... statement of the rate or range of rates by the day for lodging. ... (b) No charge or sum shall be collected or received for any greater sum than is specified in subdivision (a)."
• Florida: "In each public lodging establishment renting by the day or week there shall be posted in a plainly legible fashion, in a conspicuous place in each rental unit, the rates at which each such unit is rented. Such posting shall show the maximum amount charged for occupancy per person; the amount charged for extra conveniences, more complete accommodations or additional furnishings; and the dates during the year when such charges prevail. ... [An] establishment may not charge more than the rates posted in the rental units."
• Nevada: "Every owner or keeper of any hotel ... shall ... maintain a printed statement of the charge or rate of charges by the day for lodging and make the statement available for viewing, upon request, at the registration desk. ... No charge or sum may be collected for any greater or other sum than the owner or keeper is entitled to charge pursuant to the general rules and regulations of the establishment."
• New York: "Every keeper of a hotel or inn shall post in a public and conspicuous place and manner in the office or public room, and in the public parlors of such hotel or inn, a ... statement of the charges or rate of charges by the day and for meals furnished and for lodging. No charge or sum shall be collected or received by any such hotel keeper or innkeeper ... for a higher rate or charge for the use of such room or board, lodging or meals than is specified in the rate of charges required to be posted by the last preceding sentence."
All these state statutes contain amusingly archaic language, and they are also archaic in substance in this era of revenue management. Because rates change every day depending on occupancy rates, the booking source, the traveler's affiliation and other factors, the whole concept of maximum rates is outdated.
To circumvent these laws, hotel operators simply post rates that are so high that, no matter what revenue-management decisions are made, the actual rate will not exceed the posted rate, so they cannot be accused of violating the law.
Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email Pestronk at [email protected].