In the case of Honors standard redemptions, the important threshold is 90% occupancy, after which the point reimbursement rate goes from around $20/night at a Hampton (at WA Maldives, it might be as much as $100/night) to essentially a percentage of RevPAR (there are a couple more occupancy hurdles above that which shift the percentage of RevPAR, but those are less significant). It's not impossible that going from 61/68 sold to 62/68 sold increases the amount the hotel gets from a redemption by a factor close to 10.
(That structure is part (the other reason is to disincentivize earn and quickly burn) of the reason Hilton does 5th night free: there aren't many properties that regularly beat 90% occupancy 5 nights in a row: those that do are the ones that have really bad redemption value)
Hilton probably wouldn't mind the dummy reward bookings. The hotel would be buying (likely millions of) points at the cash rate (which is far above any other price for acquiring points) and loaning the cost of acquisition to Hilton for a year or more in order to prevent non-local booking of the rooms.
There are plenty of things a property's management could do with $100k or more of spare cash that would make more sense. For instance, buying scratch-off lottery tickets (where there's at least a chance of profiting).
Last edited by cblaisd; Oct 16, 2021 at 3:10 pm
Reason: merged poster's two consecutive posts