I would go with the $100 a night deal as he doesnt use his points for an airline ticket for you does he?
otherwise if you are flying there ask him to foot the air tickets and u will do the accom.
My friends never object to putting in a little cash to stay in fab hotels which they would otherwsie not be able to afford or they pick up the air tickets. they are never offended but keep coming back every year to do the same again so if they felt I was being unfair I am sure they would not come back for seconds.