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Hotels Fifth night free - economic behind it

Discussion in 'questions. answers. conversations.' started by LWER, Oct 28, 2019.

  1. LWER

    LWER Reader

    Hi Lucky,

    Can you provide any insight as to why chains provide 5th night free when using points?

    I can see why hotels do it when paying cash, since its a promotions. But on points, its technically already a pretty reduced rate they are earning, so why provide an extra incentive?

    Thanks!
     
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  2. rickyw

    rickyw Well-Known Member

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    I feel like hotels make majority of their profits off incidentals like food/beverage. So my guess is it is a law of averages... the probability of giving someone a fifth night free and them spending more at the restaurant or bar or room service far outweighs the cost of the actual fifth night
     
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    OCTinPHL likes this.