Hi Busybees
If others want to advertise their rates I think that's up to them. We have motels in our town that do this, but I choose not to. I think it would be frustrating with all the people looking for the cheap rooms, and having to explain to them that they're sold (which invariably happens in this situation). It's bad enough when a return guest doesn't book, then expects the cheapest room in the place, and thinks you are trying to $@&#* them over when you only have more expensive rooms available.
I do however think someone poaching guests from your property is abhorrent. Maybe look in to the trespass laws and send a strongly worded letter to them?