The Lotus Eaters (also named as Lotophagi or Lotophaguses) were a race of people from an island near North Africa, filled with lotus plants. The plants are narcotic and addictive, causing people to sleep in peaceful apathy. Those that ate the lotus plant lost all their will and memory.
They are famous for their part in the Odyssey, where two of Odysseus' men had to be dragged back to the ship by him because of the plants' effects. Aeneas also passed through their region a few times on his journey's.
They give Percy, Annabeth, and Grover magically unlimited credit cards and encourage them to stay at the Lotus Hotel and Casino. No lotus plants are seen, though Percy states that the hotel smelled like them before entering. The games are designed to mesmerize the guests, and Percy had to shout "Spiders" at Annabeth to snap her out of it, as her fear of the creatures was more powerful than the magic of the hotel. If guests of the hotel try to leave the casino, the workers offer them Platinum Member credit cards which allow them to access a new floor of games.
In the movie, waitresses hand out lotus flowers to the guests so that they forget who they are and end up staying in the Lotus Hotel for all eternity. After a mental push from his father, Percy stops eating the flowers and snaps Annabeth and Grover out of their trances. When trying to leave the hotel, the Lotus Eaters attempt to stop them, resulting in the three stealing a sports car on display and crashing through a window to escape.