When IHG Rewards Club member stays at IHG affiliated hotels, they must pay percentage of the revenue to fund running the program and the reward night redemptions.
The revenue that hotels receive for rewards nights when the occupancy rate is not super high is usually not a lot but is usually tied to the ADR (Average Daily Rate) if the hotel is close to full.
You can access IHG Rewards Club here.
Member often confuse the reward night availability between IHG Rewards Club and other programs. IHG hotels must make 5% of their room inventory as awards. This is not tied to standard room availability. There could be standard rooms available for sale but no award rooms.
IHG Rewards Club has higher rate for hotels that accommodate greater number of redemptions. Incentive rate kicks in after 1,000 award nights or total of 2% of annualized room inventory has been consumed as awards.
Average Daily Rate:
If the occupancy rate is at 96% or higher, the hotel will get reimbursed the Average Daily Rate for award redemptions for the night. There seems to be rather annoying documentation requirement to get this payment out of IHG though.
I hope that this clears the rewards night reimbursement question that covers PointBreaks as well (hotels get the same for them as regular award nights).
As you can see above, if hotel is very close to the 96% occupancy rate and they have few guests on awards, it makes sense to even dump few room on OTAs to get over the finishing line and higher reimbursement rate (could be a rather big difference).