Even without the upcoming changes to the Estrel hotel, and if Eurofurence would be held outside of northern Europe (The "Rin Grand" in Romania for example would be bigger at the moment), it is most certainly not only a matter of available rooms. In addition to that, it would also have to be a hotel with enough space for the events of the convention, and in an environment where us furries would be welcome.
You also have to take into account that the rooms need to be affordable, and how much money it would cost to run the convention at the desired location. I personally think that 50€ per night and person (in one room) in a 4-star hotel is rather impressive...
It would probably not be a good idea to move to a bigger hotel if that means that fewer people could come, just because the entrance fees had to be raised to 150 bucks, or because the rooms are 200 per night. Not to forget that the hotel/convention center would need to be willing to have us there in the first place.
So, I generally agree that it would be nice to have more rooms for people to stay at (which seems to be the case at some point in the near future). But moving to a new location is probably not as much of an easy decision as it might seem.
Of course, I'm not speaking for the Eurofurence Team here in any way. Those are just my personal thoughts on that issue.