Frankly, this idea that local events are always just a sub-part of destination validation seems far too general.
Just because there is a local festival doesn't mean it will change your budget or hotel availability everywhere.
For example, in Kyoto, a small neighborhood matsuri won't have the same real impact on prices as the Gion Matsuri, which attracts massive crowds and causes hotel costs to explode.
It is necessary to prove that the event is large enough to have a real effect on logistics before treating it as a decisive factor.