Thanks everyone for info of the situation in Spain.

DCC benefits BOTH the banks and the merchants. I actually suspect the merchants benefit MORE than the banks when pulling DCC scams.

We would be in Madrid for just a few days.
3 pay hotels - 2 nights, 1 each at an AC hotel within 2 blocks to each other that we hotel hop for the Marriott current promotion, and plan to pay with the Marriott card which earns 5x, but can also pay with Citi Premier which earn 3x TYP. Essentially the pts earned are more or less equal value but prefer to put some charges on the Marriott card before the anniversary date.
Then one night at the Crowne Plaza at MAD that has to pay with a Chase IHG card to fulfill one of the promotion requirements so to unlock 45K Q1 bonus.

Will try my best to make the hotels bill in Euro. All 3 hotels front desks reportedly are fluent in English. Though I guess it does not hurt to present a note in Spanish (using Google Translator) to inform the front desk be billed in Euro.

About Avis - we had an experience in Frankfurt last year - despite the invoice was in Euro, WITHOUT the language of "customer agree to be billed in USD, blah blah blah" that one normally sees on an Avis contract that we always made the return counter to reverse it, the charge went on the CC in USD - BUT not at the current rate + padding at the return time, instead it was at the EXACT USD on the quote when the reservation was made a few months ago, at the time when USD was stronger. I also checked the conversation at the reservation and it did not have padding.

So I am not too sure about how the Avis billing works - we automatically assume Avis DCCed us because it was in USD. But in all reality, it might not be. It is just very confusing, unless you compare a lot of information to find out exactly what amount is being charged when in terms of local currency. In our case, had they stuck with Euro, we would have paid almost 5% more than they billed us the USD exactly as quoted on the reservation.

It looks like if you do not use the card in your Avis profile where you could opt out DCC for Visa/MC, then you would be billed in USD should you use Visa/MC regardless what the invoice said. Strange thing is, the DCC may not be the current rate + padding at the tine of return as we thought it would be.

Nowadays whenever we rent from Avis, I always make a screen shot of the last page in local currency, before it turns into USD on the finalization of the reservation - so I would know how much in local currency it would be. Will see how it turns out in Croatia when we would be there for 2 weeks in May.