...they have their parties at another hotel, because ti works for them.

One thing to keep in mind is that Arisia staff and guests completely fill the Hyatt; in fact we have an overflow hotel. This means that if a group wanted to have a large party, there would be no place to put it. In addition, the Hyatt's atrium layout means that even an entire floor couldn't be devoted to such a party because it would be visible to everyone else in the hotel; the only floor not visible is Charles View Ballroom and that is (currently) the only place into which the Art Show will fit.

Disclaimer: I wasn't involved in either Hotel or Parties this year so I could be way off base; this is based on my observations of the hotel itself.