[bdod6]

The issue I'm having with this comparison is that you are equating the "nights stayed" with the points earned (the more accurate currency).

>They each have a rewards program which grants one free night for every night stayed.

It's a lot more fair to say for every $1000 spent, you have enough points to redeem a free night. In which case, some people might choose to spend more nights at the cheaper Fairfield Inn, and some might choose to stay fewer nights at the luxury Ritz. The bad money is not driving out the good.

It's true when it comes to qualifying nights, people will try to hit elite night requirements at cheaper properties. But that's not driving out the business for higher-end properties. Especially because award redemption is (mostly) based on how much you spend, not how many nights you stay.