I literally don’t understand how it’s profitable to spend points ie free money ??
Edit : I’m partially talking about spending points earned
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I worked for a major hotel company and 75% of the profits came from the most dedicated guests. In order to be the most profitable, it is worth investing in those guests. By giving them “play money” via a points system, the guest becomes more entrenched in the company and less likely to go to a competitor.
Also, those points spend like retail price but actually only have to cover the cost of the goods. A room may cost $350 a night, but it’s overhead is closer to $70. Guests think they are getting $350 in value but it only really costs the company $70 or less.
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