Some hotels impose minimum stay requirements for some or all rates during busy periods.

It's also a matter of calculating whether it's worthwhile for the hotel to overbook (and probably pay walk compensation, etc.) or perhaps plan to give someone an above and beyond upgrade in order to take one more reservation at a higher price. When the hotel (or an airline) sells a high-tier elite a guaranteed availability room (or guaranteed availability FULL Y or FULL J fare seat), they know that they'll probably need to pay someone else to go away unless there more no shows than are expected.