As seen in the cutscene of "Eye of the Storm", this hotel had been well established as a meeting place for the Inner Circle and their interests before World War III and the Prague Uprising. Known accomplices of Vladimir Makarov include Alejandro Rojas and Viktor "Volk" Khristenko have met with the Inner Circle possibly multiple times before the events of Modern Warfare 2 preparation for World War III.
At the hotel on October 11, 2016, the disavowed Task Force 141 sets up a plan to assassinate Makarov during a meeting with his most trusted Inner Circle; of which the time and location of this meeting had been learned from intel extracted from Volk and passed along by Team Metal to the disavowed Task Force 141. The meeting turned out to be little more than a trap orchestrated by Makarov, targeted mainly at Price and Yuri. Makarov's ambush included explosives planted in Hotel Lustig and a nearby building that when detonated, killed Kamarov, a leader of the Prague resistance, and severely wounded Soap, eventually killing him. The blasts narrowly failed to kill Price, and thanks to Soap pushing him to safety, also failed to kill Yuri.