FlyerTalk Forums - View Single Post - How much does Hilton Honors pay the hotel?
Old Oct 25, 2009 | 1:57 pm
  #7  
omegadeal
20 Years on Site
 
Join Date: Jan 2004
Location: Scottsdale, AZ
Programs: AA EXP, SPG Plat
Posts: 1,472
You are correct. I dug back to find the post and here it was:

Each hotel is reimbursed for any reward stay accepted. The amount is determined by a monthly threshold of rooms, which is calculated by computing the number of rooms at your property X 30 days X 1.8%. This number is your threshold number of rooms per month. For months in which the number of reward rooms taken as a percentage of available rooms is less than or equal to 1.8%, you will receive a base rate (determined by brand, see below) plus tax for all reward nights (excluding rewards taken on sellout nights). For months in which the number of reward rooms taken as a percentage of available rooms exceeds 1.8%, you will receive 90% of your 2004 annualized ADR plus tax for all reward nights taken above the 1.8% threshold (with the exception of rewards taken on sellout nights). On nights when your occupied revenue rooms occupancy is at or above 96.0%, you will receive 90% of that day’s gross ADR plus tax for all HHonors rewards taken that night regardless of whether you are above or below the 1.8% threshold. For a new property, your forecasted ADR will be used.

What is the minimum reimbursement (base rate) for each brand?
$15 for Hampton, Scandic and Hilton Garden Inn
$20 for Doubletree, Embassy and Homewood
$30 for Hilton (worldwide) and Conrad
So the hotel essentially has to give away 1.8% of their rooms for points for pretty much nothing. Let's say a property has 300 rooms and an average rate of $150. The hotel will need to give away about 6 of those rooms for points and get $15 - $30 per room.

Any rooms they give away on points over the required six would get $135/room. If their occupancy is over 96% then they would get the $135 for every points room, including the initial six.

Keep in mind these were the 2005 rules, so things may have changed since then.
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