I think it totally depends, and can go either way. When we got married, I reserved a block of hotel rooms in the hotel we had our reception at. However, after the invitations went out I sent out of town invitees a separate envelope containing the hotel information and the discounted rate amount I got, so they would know that we were not going to be paying for the rooms. I gave them all the information, a phone #, etc. I can't remember what the rate was, but it wasn't exorbitant nor was it cheap...it was the going rate (plus the discount) on a nice hotel room. I made it as convenient as I could, since our reception was at a hotel, that's where I set up the block of rooms. To my knowledge, no one stayed there, they found other accommodations, which was fine.
However, I have heard of putting up out of town guests, at the bride's parents expense. If the bride's parents were wealthy, I don't see this is a problem and would probably take them up on their offer - what I consider offensive is that your relative said if the guests could contribute...no no no! You do not do that. You either do what I did and make it specifically clear that you Set things up, you are not offering to pay for it, or you pay. You (as a host) do not partial pay, and you certainly don't ask 'if anyone could...' Nope. You either do or you don't. You don't sort of.
