I redeemed 20,000 points at a FS hotel in UK last year and received a bill under my door for £34. The room rate for the night was £130. As I understand other schemes, the hotel receives more on redemptions if it is near capacity, which would make sense. There has to be some kind of differential since the very low redemption payments to hotels would unfairly affect those in the group that are more leisure based and hence likely to bear the full brunt of MR redemptions, so I'd imagine there is some kind of scale applied to redemptions to ensure those hotels dont lose out

As for what they cost the hotel, well, $9 per 1000 seems in a little pricey to me as we can buy them for $12 per 1000. I would think Hotels buy them at half our rate, say $6 per 1000