The rooms are just like train tickets and airline tickets - quota controlled.
Put simply, that means there are one or two for some, but not all hotels at the lowest price, then a couple more at the next band, after that you're heading towards rack rate. You seldom get cheap rooms in London as they can generally sell all they have. As someone said it drives traffic to their site. That said, I have a room for next Wednesday in Grantham that cost £29. Shame there's no decent WGs nearby.
Train companies, airlines and hotels have complex yield management systems and help them make such offers, albeit with limitations.
And how do we really know they have 50,000 rooms? I suspect it's all marketing bollocks.
@ bangers & gash - they give you 30 mins free wifi which is a really big deal. One way around the 30 mins is to use a second browser, and you can also try deleting cookies and data then use an alternative email to re-register. That way I've have a couple of hours free wifi from PI. Shit, given the game away.......