Googlemaps shows a handful of hotels so, really, not many to choose from. Prices are always higher when there's less options. Not enough competition to drive down costs.
Per Googlemaps, there are a lot more options just 35 miles west in Livingston.
For future reference, it can be worth it to toss a sleeping bag/pillow in your car even if you're not planning on camping because Tony could have rented a camping cabin at Big Timber's KOA for $46. Since they provide the bedframe/mattress, it would probably have been just as comfortable as a hotel for a significant savings.