This shows a lack of understanding of pool's business model. When an event producer approaches a hotel, the hotel is offering to provide something for them (use of the grand ballroom and a few free rooms for the staff are the bare minimum, but there's much more to it). In exchange for this, the event producer pledges a specified number of room nights as well as some less financially important things. Typically, if the event producer falls short of delivering the agreed minimum number of room nights (from players and attendees combined), they are on the hook for the unfulfilled promise.
Here is an example, admittedly an extremely oversimplified one:
An event producer, in exchange for the use of the hotel's grand ballroom for six days and the pledge that all associated costs are borne by the hotel, agrees to deliver 1,400 hotel nights, with an agreed to cost of $200 per room per night. Let's say that the players, some of whom stay longer than others, fill 850 of those room nights and other attendees fill 350 of them. In this case, the event producer will have fallen 200 room nights short of their 1,400 hotel nights pledge and would have to make up the difference of 200 room nights at $200 each, or $40,000. This would be a big hit to the bottom line of the event producer.
In short, an event producer is, typically, at risk when they make a tournament deal with a hotel, so unless players stay at the host hotel, they are endangering the long-term viability of that event. Event producers that are unable to deliver the room nights often walk away from staging the event in the future.
Hence, it is necessary, at very least, for most of the players to stay at the host hotel, and I have no problem with an event producer requiring it in most cases.
