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The band, more than once, confirmed that the song was about excess and materialism. Don Henley for instance said in the London Daily Mail “It was really about the excesses of American culture and certain girls we knew. But it was also about the uneasy balance between art and commerce”
The underlying theme of the song is the corruption and decadence of the Los Angeles music industry which is described as a prison that artists seek and freely enter [And she said ’we are all just prisoners here, of our own device’] to later discover that they cannot escape it anymore [But you can never leave!]
That record explores the under belly of success, the darker side of Paradise. Which was sort of what we were experiencing in Los Angeles at that time. So that just sort of became a metaphor for the whole world and for everything you know. And we just decided to make it Hotel California. So with a microcosm of everything else going on around us.