There is no catch, but there are some restrictions.
The hotels only make these deals available for the times when they know they will have vacancies.
They know that most of their free guests will spend money while they are there – in their restaurants and their gift shops.
Many of the free guests will also pay to extend their stay by a night or two, so the hotels still make money on most of their free guests.
Your recipients will not have to sit through a time-share or other sales presentations.
They are regular guests in the hotel. Just like any other guests, but they are free.