I've read pages and pages, sorry if I've missed this.

How does the hotel business work?

If a hotel is owned privately, I assume that of the $1000 I pay to "PH city x" for a room a certain % goes to corporate for points, reservations, management, etc.

How does the hotel get paid back for Suite upgrades, points stays, etc.? Fixed $ per point? Based on rack rates for rooms or suites?

Is there a benefit to the hotel for upgrading a platinum or diamond to a Regency Club or suite (beyond obvious customer goodwill)? They have real food and beverage costs if nothing else.

The reason I ask is that I wonder if perhaps hotel management should be competing for my corporate "$" if that's the case. As in: If "GH city x" wont step up for my points, upgrades, etc, then I'll spend them at "PH City x or GH city y".

Thoughts? Insiders? Thanks!

Added: The reason I ask is not to work every stay to advantage, but to know best how to produce a "win-win" situation. If a hotel operator does right by me, I want to know that I can do right by them also. And if tossing them a suite upgrade or a pile of points is to their benefit I'm happy to oblige!