Last week I tried to use it on a hotel in Orlando that wasnt available for purchase, and it was a big flop:
1. apparently it doesnt work on resorts (who knew Hilton lake buena vista is a "resort" - all it got is a pool);
2. they're extremely oversold (by 10%) and the guarantee doesnt apply in this case.
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Funny thing is, the next day I went online and they had every possible kind of room available for purchase and I booked one for $71 (vs. $209 had it been available using diamond "guarantee").

Makes me think that hotel wanted to keep rooms for last minute reservations (big weekend) and reported as sold out.