I go to Sturgis, but I don't stay in motels/hotels. Lots of families will rent you their home during the rally. They use the money from you staying in their house to help fund their annual family vacation, and they leave to escape the crowd. Of course, you leave it the same way you found it, or better. Depending on the deal you make, you can come out for considerably less $$ for a week than the chain motels charge. Even if it was the same $$, I'd rather have a whole house to use, and know the $$'s went to a family rather than a corporation. Twice I have stayed in a private home, while they were still there too. Besides $$'s, I took the family to dinner one night. When I go back, I look them up, even if I don't stay with them. I'm not talking about big lodges, condo's, etc., I'm talking about 3BR 2bath houses that normal working class families live in. Like I live in. Check w/Sturgis Chamber of Commerce, that's how I got started.
A few years ago, per Rapid City TV News, the Sturgis rally officially passed agriculture to be the largest $$'s income to the state.
Motels in Sturgis raising their prices for one week is no different than motels/hotels raising their price if their city happens to be the Super Bowl host city that year. It happens everywhere, not just Sturgis.