I've never paid an entire hotel bill in cash (you don't get any miles from Amex if you do that!), but I have chipped away at a hotel bill every now and again by using up whatever local currency I wouldn't spend on the way to the airport and would otherwise have to carry until my next visit to the place. It (ever so slightly) cuts down on the forex premium the credit card company charges. I've done it at 5* hotels and no one bats an eyelash about paying part of the bill in cash and part on the credit card.