Originally Posted by divaof travel
Perhaps, but the "X" value might be higher than you think, and higher than an eligible room rate.
Room revenue above a certain rate is all profit. Incidentals carry an expense and labor charge, so the margin isn't as high.
Consider the value of a FFN in Paris at $400. One could argue that the "X" value would generate a profit of $400 to get the free room. Assuming 50% margin, that means the incidentals would have to be $400/night for two one night stays.
Your assumptions are not correct. The hotel are reimbursed for award stays and FFN by GP (I have seen the amounts a couple of times on the check in forms). This amount is probably around, what they need to cover the vairiable cost of you staying there.
Second wrong assumption is the margin of services, like telephone, room service or minibar charges in the hotel, this is more like 70-80%.
As to make my suggestion workable, it should be fixed around the normal hotel level, and there the reimbursement rate or even more a PLN rate plus 50-100$ will bring you easily in the range of normal rates, if not even higher.