In general, I have found new, non-luxury properties tend to get a reasonable category for the first year. Hence, good use of the cat 1-5 certificates. One Springhill I visited in that situation is now moving to a category 7. It is pretty clear that reward demand is driving the categories from my view even if the nightly rate is not very high.
The redemption value of the category 1-5 certificates I've had has ranged from a nightly rate of $99 to $150 to $180 to $209 to $349 (before tax). It has to be above $85 (based on the Chase AF price). I still think Chase needs to go to cat 1-6 certificates to retain the value of its program, but it was nice to see MB offer a cat 1-5 certificate as it allows a two night stay on certificates (Chase + MB).
The reason I think MR gets good ratings is that if a standard room is for sale (non Plat force reservation), a reward room is usually available. Now, I've had the experience sometimes where I would check and no reward room shows up, but if I keep checking diligently, I've had them eventually show up. I have a feeling that there is some system alert when a regular room is for sale, but no reward avail. I don't know for sure.
Now that rewards count for nights stayed, there is a little less hesitation to redeem points for nights. MR has noted that it is tracking how many category 1-4 properties are out there, but in the US, it is hard to find many that are in popular tourism areas. At the same time, I think it is very hard for a property to stick at category 6 or 7 that just got shifted up. It has to be an exceptional location or unique place. Once you leave the certificate zone, people have to think a little more to redeem up or the cash rate has to be exceptionally high. I feel that does lead to some properties coming back down.
Rasheed