Rest room

A foreigner [who else will it be except the big boss ] came to a hotel and asked the receptionist
"where is the rest room"...the receptionist got confused and said "sorry, there is no rest room in this hotel".
now it is the foreigner's turn to get confused.can there be a hotel without a rest room?
even i wonder what makes these bloody americans give such a name as rest room.do they take rest there?
is there any other reason? in the same way, i got confused with the use of the word "sanctions".[now i got used to it ].originally,sanction meant to "grant permission" etc.now the meaning is entirely different.
waiting for an explanation
karthik