As Duke787 notes, groups rates tend to be more complicated that some people know. In some cases, the entire room rate paid by the guest isn't actually 100% revenue for the Rooms Division of that hotel. If the group has functions at that hotel, a chunk of that money might earmarked as revenue for meeting rooms or catering. In that scenario, the group rate might be identical to the "normal" rate but they're getting (for example) a catered lunch that isn't charged separately to anyone in attendance.

For larger city-wide conventions, some groups will have the hotel pay out a certain amount for each group room to the convention center or visitor's bureau to subsidize the event. In that scenario, the attendees might not have to pay registration fee (or pay a higher one) to attend the event.

Also, as Duke787 writes, the cancelation terms and perks associated with a group rate might be different.