I just checked the hotel I had booked recently in Fort Lauderdale. Room per Expedia $226 or 2262AM, room per hotel website $222 converts to 2109AM (both before taxes). Difference is 153AM or $16. Definitely what they used to charge on the Airmiles site as a booking fee. Some more expensive reservations would end up paying a slightly higher fee with Expedia's new method of simplifying the conversion.
As with all redemptions (travel or merchandise) using Airmiles, you've got to do your math to see what the best option is before proceeding.