I think it depends, small guest list may not necessary mean less losses..
For me I had only 120 guests and it was a little difficult to find hotels that have rooms catering to this size. In tne end, I opted for Ritz Carlton. Due to the small size, there were a lot of things that I didn't have such as big ballroom etc. So in the end, I topped up for the flowers and paid for a band to create the atmosphere.
And thank goodness that we did hire the band and top up on the deco as we were initially very apprehensive on paying a couple of thousands more for flowers and band. It created a really nice atmosphere and all the guests said this was the first time they had attended a small wedding party that was was classy, cosy and elegant.
No one left early at my wedding and in fact, all of them said they had wanted to stay back for more coffee and tea.
But due to the small size, my per table cost was pretty high. 1 table at Ritz could pay for 2 tables at Carlton or even lunch at Conrad.
Before the wedding, a lot of people were saying we were pretty dumb to not to do a bigger banquet. But in the end, they were won over when we showed them on the wedding day that small banquets can be just as good.
The guest list is also a nightmare. People think easier to manage fewer guests but you can't over-invite as the room has got no space for reserved tables. And if you invite the exact number of guests, you may end up with empty seats with the no-shows and it's difficult to have a reserved guest list which we wanted to avoid having anyway.
So inviting few guests may not be the solution to minimising losses as in my case. If we had done the 20tables at say another hotel, we will not need to pay extra for deco and band as the grand ballroom itself has enough 'qi pai'.
But for us, we decided that we want quality over quantity. And I think due to the small size, food quality was good as some of my guests had previously attended Ritz's dinner said my food was better.
90% of my guests gave less than the banquet price but the 10% who gave more enabled us to cover the cost.