We asked a hotel manager this very same question, below is the Answer.
You are correct that the rates the weekend prior to Tidal Wave are lower, there are several factors that play into this:
Demand – The Tidal Wave event falls over a weekend with high demand in the area which increases the rates, this is why throughout the year you will see different pricing from day to day and week to week
Flow Through – Pre and Post days of Tidal Wave are difficult days for the hotel to sell rooms since the hotel is not able to offer stays that overlap with the Tidal Wave event
Area Hotels – In looking at the other hotels in the area with similar events we are offering competitive rates. In addition we do not enforce policies such as mandatory valet.
Packages – We do not offer packages during special events such as Tidal Wave, our parking team requires extra staffing and longer hours which prevents us from discounting parking.
Staffing/Additional Cost – An event such as Tidal Wave does require additional staffing for all departments, more than any other event throughout the year. Things that we offer such as the poolside bar and grill concessions are at no additional cost to Tidal Wave and the hotel breaks even on these.