The song's lyrics describe the title establishment as a luxury resort where "you can check out anytime you like, but you can never leave." On the surface, the song tells the tale of a weary traveler who becomes trapped in a nightmarish luxury hotel that at first appeared inviting and tempting. The song is generally understood to be an allegory about hedonism and self-destruction in the Southern California music industry of the late 1970s; Don Henley called it "our interpretation of the high life in Los Angeles" and later reiterated "..it's basically a song about the dark underbelly of the American dream and about excess in America, which is something we knew a lot about." In 2008, Don Felder described the origins of the lyrics:
"Don Henley and Glenn wrote most of the words. All of us kind of drove into LA at night. Nobody was from California, and if you drive into LA at night... you can just see this glow on the horizon of lights, and the images that start running through your head of Hollywood and all the dreams that you have, and so it was kind of about that... what we started writing the song about. Coming into LA... and from that Life In The Fast Lane came out of it, and Wasted Time and a bunch of other songs."
The abstract nature of the lyrics has led listeners to their own interpretations over the years, including some claims, spread by word of mouth and internet, of Satanic aspects. Other rumors suggested that the "Hotel California" was referring to a hotel run by cannibals, the Camarillo State Mental Hospital, or a metaphor for cancer. These claims have been consistently refuted by the band.
The term "colitas" in the first stanza of the song is a desert flower, also known as Antelope sage or Colita de Rata . Both Don Henley and Don Felder have repeatedly and publicly stated that Colitas are "heady desert flowers." Others assert that "colitas" is a Spanish term for "little tails" or "little bottoms", and a reference to the buds of the Cannabis plant.
According to Glenn Frey's liner notes for The Very Best of Eagles, the use of the word "steely" in the lyric (referring to knives) was a playful nod to band Steely Dan, who had included the lyric "Turn up the Eagles, the neighbors are listening" in their song "Everything You Did."