A rack rate is the default price charged by a hotel for a room. It is generally higher than the rate offered through a travel agency or through discount sites like Expedia. It exists in part because some people will pay that price, and there is no sense in leaving money on the table, and in part to make customers feel like they've gotten a good deal when they do use a third-party service. If you do not want to haggle through a third party, you can generally negotiate a discounted rate on your own, although this is less likely to be an option if you are travelling during a holiday or travelling in a developing nation. It is always wise to do research before travelling to find out the expected rack rates and expected discount rates for the local hotels.