How Are Hotels Paid When You Redeem Points, And For Elite Perks?

At Hilton the hotels are billed for points earned during a stay, separately from any system fund. It's one of the more expensive invoices I pay each month.

Some hotel loyalty programs only ever pay a fixed rate to hotels where the members use points for award nights and occupancy level has no bearing on the reimbursement/direct bill rate. Other hotel programs have a sliding scale or matrix of reimbursement/direct bill amounts that are impacted by occupancy level for the nights.

@Murray Barnes - this is fascinating to me.
- What size property do you own/operate?
- Do you tend to have more business or leisure guests?
- Roughly what percentage of your guests are a part of Hilton‘s loyalty program and what percentage are not?
- Have other Hotel groups attempted to incentivize switching to them once your contract with Hilton is up?

I will never again stay at a Remington managed property.

Makes sense. But, no clue whether you're right or wrong. You're an unreliable narrator because if you add up all of your stories from all your comments across the web:

- your spend 800 nights a year in hotels
- you spend half the year in Sweden, half in India, one-third in Africa, and the remainder split between seeing your grandkids in New York, DC, and Kansas City
- you claim to be known within high society yet none of my Partners have ever heard of you.

Do you need a hug?

I'm just the on property accounting guy, most of those are beyond the scope of what I can answer.

I’d love to know how much the Calala Island Resort receives per night. Based on my recent experience, as well as numerous other reports, half the visitors stay on Hilton points and half are auction purchases at charitable events in the UK.

I can't imagine that ALL or GHA reimbursements work like that, but then again we have established that those programmes are invisible to OMAAT.

Well, yes. The author of OMAAT is in the United States. This website is clearly meant for US audiences as evidenced by the credit cards for which only US residents can apply. Accor and GHA have no meaningful presence in the United States as regards points-based hotels.

Thanks Arps for your false accusation contribution and attempt to misrepresent me. 😉

Do you not understand how it's possible to have more elite status nights accumulated in a given time period than there are actual nights in the same time period? And it's rarely been anywhere close to 365 elite status nights for me in any given year. I just know how to play the game to get a lot more hotel elite status than most others, and I keep hotel rooms even when I am spending the night in hotel rooms or homes elsewhere; and I have other means to run up hotel elite status/elite status nights.

I have barely been to Africa by my own account, so who knows where you come up with your fabrications about me. I do bounce a lot between the US, Europe -- where I am again today and listening to Swedish music 😉 -- and Asia.

Who knows or who cares what you based your last claim about me, as you and your "partners" have no clue about me other than what you have read about me and obviously misunderstood to various extents about me or my posts.

Arps is whipping a dead horse of Arps' own fabrication and fishing poorly for info about me. I have literally never posted any comment about who inherits anything from me so who knows where Arps come up with the "your grandkids" and Kansas City fiction.

That's the way Radisson's program worked too when they used to have one that covered Radisson properties worldwide. Not sure how it has changed since the split and then the acquisition of the Radisson Americas portfolio agreements by Choice, but its pretty much industry standard that the properties pay the loyalty program owner for points the guests earn from the stay net of other charges being settled.

Then you may want to check out this list:

https://www.hospitalityonline.com/remington-hospitality/locations

They have properties affiliated with Best Western, Hilton, Hyatt, IHG, Wyndham and perhaps even more than just that.

Arps is very well known in high society and highly sought after as a dinner party guest for his wit, whimsy and ebullient sense of joie de vivre. The rarified salons of New York, London, Paris, Rome and Monte Carlo would fall deathly silent were they not filled with the music of his bon mots. Arps does not merely attend parties; Arps transforms them by his mere presence into historical occasions worthy of meticulous documentation.

One does not simply know Arps - one experiences him, like a particularly exquisite sunrise over the Alps that somehow manages to taste of bergamot. In fact, Arps brings such luminous charisma to even the most pedestrian of conversations that one feels compelled to transcribe his casual observations for posterity. Indeed, the greatest achievement of modern society's cultural gatekeepers is not what they have preserved in museums or captured in biographies, but simply that they have managed to document Arps without diminishing him - a feat akin to bottling the Northern Lights without losing their luminescence.

Is this one of the FlyerTalk moderators hating on Gary Leff?

A bunch of Europeans in particular seem to not be happy with the very rich bank card-pushing and bank card opportunities available in the US but not in Europe. I don't understand why you or anyone would hate Gary Leff.

Lawyers are retained and instructed by high society, and although they might be invited to a holiday event or a day on the yacht, they'll always be introduced as "my lawyer" rather than "my friend". You can't buy your way into the upper echelons of old money. You're in from birth, or you're not in.

As a somewhat-related aside, most lodging contracts for FAs, Pilots, Train Crews, etc are written in a somewhat similar way, although in some ways disadvantageous for the hotel. Generally if the hotel isn’t sold out and a flight cancels and results in no-show rooms, the carrier pays nothing for those rooms. However if the property was sold out less those rooms, the carrier is on the hook for the full bill. It’s good daily income for a hotel but can occasionally be a downside.

Marriott's new low end brands have a fixed cost to owners and don't charge the kind of fees Marriott has typically charged. I think that's why they get zero elite-qualifying nights.

Firm believer that upgrade to a viewless room at PHKyoto is actually a downgrade. I said no and got a beautiful garden view.

I am currently staying at HR in Europe. I made four one-week reservations four and a half months ago. I also applied SUAs for all four reservations and requested higher floor room as my preference. I was assigned a suite at the lowest level of the hotel when checking in. When I asked FD staff why my request was not at least partially accommodated, the staff simply responded, “your reservation is so long.” I could not understand what the problem was. From my perspective, I earned those SUAs by paying for over one hundred nights at various Hyatt properties. In reading this article, I realize the hotel may perceive I got the suit for “free” at their expense. Therefore I decided to shorten my stay and booked with another Hyatt property in a different city.

The answer does not surprise me. Also complimentary upgrades (e.g., to next higher room category) come very often for short stays, but never for longer ones.

@Andy - that's because if you're staying one night, the cost of providing that suite/premium room is more or less zero. If you're staying a week, there's a good chance it would still be sold for some of those nights.

I had a plenty of nice upgrades on longer stays though. It varies by hotel.

Not trying to pick on Hyatts, but used our suite upgrades for Hyatt Etoile in Paris. Our first trip they wouldn't honor it.
We spoke to management and to our Concierge, if they have the rooms, they need to honor it.
2nd trip they had to honor it. The upgrade was for 7 nites as per Hyatt rules. After 6 days, they said we need to move.
Then for the standard room they overcharged for an additional reservation without informing us. Only found it out on our credit card.
Its a large hotel and they operate fairly recklessly and flaunt the Hyatt rules.
I guess they can as the previous GM is now the regional manager of Europe, so he has their backs. Hyatt corporation should keep an eye on those breaking and flaunting the rules

I am in the industry and can confirm it is likely due to your stay being "too long". Hotels have to manage their inventory, and are blocking room types, often a month+ out in order to have clean inventory. In most larger hotels there is at least one person who's sole function is doing this. This is to ensure that each room category has stay through capabilities.
You were able to book a suite for a month with a request for a high floor. When that comes in someone is looking for the availability, and a long stay is hard to block out. But they also need to ensure that other types os suites are available for shorter stays in order to not turn away reservations. For an extended stay such as your's its a hard one to do and manage.
There is some "make more money" also in play here, as a higher floor suite may come with a premium rate, and those are held for guests either paying full price, or on rewards for only a few nights.

Did their asking you to change rooms after 6 days have anything to do with a request for late check-out? Did they tell you at time of upgrade and/or at check-in that the upgraded room types was for only 6 days? Did they provide an excuse or reason for you having to move after 6 days?

Exactly. The longer the stay into an upgraded room using a complimentary upgrade benefit or points/award certificate upgrade, the more likely the upgrade eats into a potential sale for the upgrade room type.

Hyatt does compensate the hotels for room upgrades using the suite upgrade certs but it’s not a whole lot of money per night given the difference between a standard room’s rate and the suite’s rate can easily be well over $100 while Hyatt doesn’t compensate most or all of the difference.

That resort seems to have an interesting way of doing business for its owner. It could be that the resort is a personal pet project, but the resort owner seems to really like unloading a bunch of inventory for a big discount via charity auctions that sell well below the going cash rate on Hilton’s site. Hopefully, the hotel is financially viable for its owner with some kind of tax management strategic play and the good times keep going with Hilton and redeeming Hilton points for the property.

Have you checked the rates for other hotels? The American chains are consistently overpriced in Europe and it's quite typical for them to charge more for a basic room than what you'd pay a local competitor for a junior suite. Those elite upgrades are far from free, you're often paying a serious premium for them.

A visitor from the UK thought the owner could deduct the rack rate (4K per night for 2 persons) as a charitable contribution. If no one is paying cash directly for a room, I wonder how strong the owner's valuation for the tax deduction or the Hilton points redemption is.

Also if more rooms are booked through points or charity stays, maybe they fill at 90% and get the higher rate from Hilton and so still a couple thousand a night from Hilton corporate