Originally Posted by
jn in ca
By my estimate Hyatt probably paid the hotel over $300 for last night's rewards night, and it probably cost the hotel less than $50 for the points they put back into my account. So all's well that ends well for the hotel too.
I don't know anything about the hotel business from that side of it, but if it really works that way it seems like it's just begging for abuse.
I assume that the amount that Hyatt pays for a free night is fixed and nothing close to what you pay for the room? I know that this is how it works in Vegas when the hotel "sells" rooms to casino marketing to be comped to customers. Casino marketing pays for the room, but it's a small fraction of the published room rate. I know this because once they accidentally gave me an itemized printout of a folio that included this charge -- usually they filter that line out. I don't remember the exact numbers but it was well under $100/night for a suite (a real suite, not a large room that they label a suite). I think it's a fixed rate (or maybe a fixed weekday rate and a fixed weekend rate) -- it does not fluctuate the way that public rates do.