Location selection is a bit of an art. You have to pick a location that suits your needs, without too much hustle from a major downtown area. At the same time, you need to have local attractions for the wives and kids to visit, in addition to the club members who want to explore a place that they may not have had the chance to visit before.
TDIFest is not "all about the cars." It's about meeting new people, seeing new places, doing things that you might not have done otherwise, and (most importantly), learning about the cars and having TDI-related activities. With that being said, it seems that the suburbs of a major city seems to work the best for our needs as a club. These areas offer hotels with large meeting spaces (a requirement), parking facilities, and lots of attractions in the vicinity. At the same time, you can enjoy a more relaxed environment than you would if you were actually in the major city (traffic, people, the grind of daily life, etc).
With all of that being said, there was plenty of stuff to see around this year's Fest if you drove more than a mile down the road. The area offered some of the best museums in the country, national monuments, historic sites, great drives, shopping, and plenty of other things that quite a few people opted to take advantage of (either during parts of the weekend, or by arriving early and/or staying late). All-in-all, there was a well-rounded assortment of activities to do, both Fest and non-Fest related... which I personally think help attribute to our overall attendance.
My $0.02 regarding location selection. It's a fine balance between the focus on TDIs and keeping everyone (including families) entertained.