MileValue is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit to learn more.

Note: Some of the offers mentioned below may have changed or are no longer be available. You can view current offers here.

I’m interested in the businesses behind loyalty programs, so I always wonder:

  • What did that credit card company pay that airline for its miles?
  • How much does American Airlines pay Qantas when an AAdvantage award includes a Qantas leg?
  • How much did that hotel loyalty program reimburse that specific hotel for the free stay I just took?

Well last month I stayed at the Radisson Martinique of Broadway (review here), and I know exactly how much Club Carlson reimbursed the Martinique for my stay.

Screen Shot 2014-04-01 at 10.00.02 AM

How much did Club Carlson pay the Martinique for my stay? How do I know?

I used two free one night stay certificates for my stay. When I checked out, I was surprised to be presented with a bill that read:

  • NY State Tax (8.8875%) $10.47
  • Occupancy Tax (5.875%) $6.93
  • Hotel Room Tax ($2) $2
  • Hotel Room Unit Tax ($1.5) $1.5
  • NY State Tax (8.8875%) $10.47
  • Occupancy Tax (5.875%) $6.93
  • Hotel Room Tax ($2) $2
  • Hotel Room Unit Tax ($1.5) $1.5

The total bill was $41.80.

Normally points stays have no taxes on them, and I had anticipated the free night certificate would be the same. Upon closer inspection, it did say on the back of the voucher that taxes were my responsibility, so I paid them, and then I started to wonder why I paid the amount I paid.

The percentage taxes make it easy to calculate that the “base rate” of my stay was $118 per night. I assumed that must be the rate at which Club Carlson reimbursed the Martinique for my stay, which was about one third of the prevailing room rate.

I emailed Club Carlson for confirmation on why I was charged taxes of $41.80 on my award.

The answer I got back from a manager at the Martinique:

The taxes are based upon a pre-determined value of the room rate of the free night of $118.00. The rate can fluctuate depending on the occupancy.

He didn’t quite confirm that the Martinique was paid $118 per night by Club Carlson, but I infer that from the line about the rate fluctuating based on occupancy. Everything I’ve read about hotel programs has said that the hotel program pays the hotel one rate far below the market rate as reimbursement for free rooms normally and one rate near the average daily rate if the hotel is nearly full.

Normally the Martinique costs 50k Club Carlson points for a free night. If Club Carlson then pays the Martinique $118 for the stay, that’s costing Club Carlson about 0.23 cents per point redeemed. With redemption costs that low, that explains why it’s so easy to earn Club Carlson points, and why Club Carlson has had some incredible promotions in the last few years.

Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.

Just getting started in the world of points and miles? The Chase Sapphire Preferred is the best card for you to start with.

With a bonus of 75,000 points after $4,000 spend in the first 3 months, 5x points on travel booked through the Chase Travel Portal and 3x points on restaurants, streaming services, and online groceries (excluding Target, Walmart, and wholesale clubs), this card truly cannot be beat for getting started!

Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are the author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.

The comments section below is not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved, or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all questions are answered.