“Each hotel is reimbursed for any reward stay accepted. The amount is determined by a monthly threshold of rooms, which is calculated by computing the number of rooms at your property X 30 days X 1.8%. This number is your threshold number of rooms per month. For months in which the number of reward rooms taken as a percentage of available rooms is less than or equal to 1.8%, you will receive a base rate (determined by brand, see below) plus tax for all reward nights (excluding rewards taken on sellout nights). For months in which the number of reward rooms taken as a percentage of available rooms exceeds 1.8%, you will receive 90% of your 2004 annualized ADR plus tax for all reward nights taken above the 1.8% threshold (with the exception of rewards taken on sellout nights). On nights when your occupied revenue rooms occupancy is at or above 96.0%, you will receive 90% of that day’s gross ADR plus tax for all HHonors rewards taken that night regardless of whether you are above or below the 1.8% threshold. For a new property, your forecasted ADR will be used.
What is the minimum reimbursement (base rate) for each brand?
$15 for Hampton, Scandic and Hilton Garden Inn
$20 for Doubletree, Embassy and Homewood
$30 for Hilton (worldwide) and Conrad
So the hotel essentially has to give away 1.8% of their rooms for points for pretty much nothing. Let's say a property has 300 rooms and an average rate of $150. The hotel will need to give away about 6 of those rooms for points and get $15 - $30 per room.
Any rooms they give away on points over the required six would get $135/room. If their occupancy is over 96% then they would get the $135 for every points room, including the initial six.
Keep in mind these were the 2005 rules, so things may have changed since then."”