I think it's all to do with demand, most hotels increase their prices when they know there's a big event in the area. Goodwood is a great example, Travelodge in Chichester wanted around £200 a night last year during the revival, presumably because they could as most hotels in the area were fully booked.
I go to quite a few business conventions and the room rate is higher than the normal rate because the charge includes all of the function room hire etc.
