Probably, because of what mrandish said at the start of the thread. Management thinks they can earn more money from others. If hotel staff is treated well and/or gets good tips doesn't factor in the decision process which event is hosted. As long as someone spends enough for managers to get their bonuses management is happy.

It doesn't appear there are any similar sized conferences scheduled for the original time slot though? Or that there will be one in the near future, unless you know of some information.