Although I'm not a huge fan of widespread comping, I don't believe that this is true. Whether it's airlines or hotels, the people who are actually frequent-travelers will always occupy 1000's of times more revenue-seat-miles or qualifying-room-nights than comped elites. If a comped elite suddenly turns into a frequent-traveler with that airline/chain, great...that's the marketing purpose behind the comp. If they don't, then they don't affect the system at large.

This was a big thread on the HH board when they were comping Gold to everyone with a pulse. "The hotels will be so full of fake Golds that real Golds who check in late in the day will get stuck in crappy rooms." I stayed at a lot of Hiltons during that time - I started as a "fake" Gold and became a "real" one, so obviously the comp served its marketing purpose in my case. I never got a crappy room because a hotel was so full of Golds they didn't know where to put me. In fact, at some properties I'd have my name on a little board as Guest of the Day. Why? Because I was the only Gold there! Their marketing people obviously wanted to get as many Gold cards into circulation as possible, and hopefully for them...it translated into incremental stays.

If a chain mails out a comp and that guest stays 1 time, the chain wins. The revenue from 1 stay will far outstrip the costs of printing/mailing the card, awarding a few bonus points, and letting the guest have a free Coke and eat fifty cents or a dollar's worth of food in the lounge. If the guest throws his free Gold card in trash (as I did when Hilton accidentally mailed me three different Gold cards for different reasons, all with new account numbers), then they lose out on their marketing costs. Better backend data would fix that.

Again, I'm fine with Marriott's marketing strategy: anybody who cares can have Silver before their 1st stay. It's a freebie for people who know they're going to do a few stays and like the idea of being a notch up from people who truly don't care. No comps to Gold, but you can occasionally Challenge. Platinum is, for the most part, off-limits until your 75th night. Overall, it's a pretty well-rounded strategy that keeps most people happy. Only common complaint I read here is that they don't have a level in the 25-night range like the other programs do.