The annual expenditures of the Crown were largely determined by local tradition and the political power of the monarch in question. In countries with a strong feudal element, where all land was held in feodum of the Crown, some of these entertainments could be very grand indeed. A monarch was naturally expected to entertain lavishly as befitting his station by divine right and, although we are familiar with excesses of certain royals, activities such as state feasts and competitions were a way for the monarch to demonstrate the health and wealth of his nation. This is an enormously broad generalization of nearly a thousand years of pre-modern era entertaining, but the point is that feasts and tourneys were not just a sign of largesse, but also a projection of power.

In England, the Sovereign expected a certain level of entertainment when visiting their vassals. This was a double edged sword. While the Sovereign's visit was generally perceived as a nominal sign of favor, it also provided an opportunity for the monarch to examine and question his vassal about his wealth and political motives. Since the Sovereign could not be denied, it was also an opportunity to enact a sort of tax on the vassal: these visits could be ruinously expensive as the vassal in question would not only entertain the King, but his sometimes vast retinue as well. The tradition of non-refusal is still nominally alive today. Queen Mary, the Queen Consort of George V, had a particular fondness for Sèvres porcelain and would often hint that she should be receive certain objects as a gift. The Earl Spencer eventually took to hiding any valuable porcelain in his possession for fear of further visits.

Some historical feasts were much more modest than Game of Thrones might lead you to believe but it's important to remember that in today's modern world, if you live in a wealthy country with modern conveniences, you probably have access to a greater variety of foods at much lower prices than at pretty much any other time in history (especially when prices are weighed as portions of income, today we enjoy food prices that take up much smaller proportions of our income).

A huge part of any expensive feast was that they were thrown to show off the riches as well as influence/ability in obtaining the rarest, most exotic, difficult to get (whether by scarcity, difficulty of transport, or difficulty to create) foodstuffs. For a host that wanted to show off, this could (and often did) outweigh the need for any of the food to actually taste any good.

For much of medieval European history (most direct analogy to Game of Thrones setting), this largely had to do with spices, which came by various routes from Asia.

And spices could be indeed monstrously expensive. Favors, rights, titles, and even land were bought and traded for cloves, pepper, cinnamon, mace, cardamom, ginger, etc. or access to routes that lead to these spices.

Spices were also the merchant's greatest leverage for creating inroads with nobility and royalty. Spices often defied the commonly accepted inverse relationship between demand and price. Spices defied commonly held thought that high prices would drive away prospective buyers. The very fact that spices were out of the reach of the vast majority of people who lacked the necessary financial means was a major part of what made them so desirable for many of the upper class. Their high price was a huge part of the allure and were an essential part of what fueled higher demand, in a cycle that placed astronomical values on having and maintaining supply. The spice must flow.

This cost was due to several things.

One of the highest reasons was definitely distance traveled.

The vast distances involved meant that prices naturally rose due to the effort and cost of bringing spices so far from where they were cultivated. But the routes through which spices flowed were well mapped and controlled, which meant many many taxes.

The desire to discover new spice routes that drove so many explorers like Christopher Columbus and da Gama was to avoid the existing heavy tolls (as well as avoiding the sin of dealing with Muslims but that is another story).

But this cost wasn’t only dependent on distance and taxes. For example, the most expensive spice then and now is almost certainly saffron. The cost has only depreciated a small amount even in the modern day because the difficulty of getting saffron to your table is not a scarcity due to distance but one of intense, mind boggling labor.

Unlike most spices, saffron could be and was cultivated directly in Europe, extensively. But it took immense amounts of suitable land, labor, and care to harvest even modest sums of the spice.

This, of course, made it all the more desirable in the eyes of the wealthy, and saffron was valued not just for its purported medicinal and gourmet value, but also in religious rituals and hedonistic shows of excess. It was so desirable that it was, of course, involved in a vast amount of counterfeit, adulteration, fraud, extortion, seduction, robbery, and once, it started a war.

These spices were not just bought for their use in food, but for their use in the pursuit of good health.

Indeed, a major reason why spices were so sought after was because they were thought of as irreplaceable cures and medicines through which disease and ailments could be treated. Illnesses that would otherwise wreck a man’s body or strip him of his good humors could be prevented if one were to consume the proper amount of spices at the right times with the right food…if only one could find them and afford them.

Any man of means who was concerned with health would seek to have a well-stocked spicery. During the time of the Black Plague, saffron and nutmeg were thought to be the only reliable ways to prevent contracting the deadly illness. People with lesser means had to be content with ‘lesser’ spices and risk flirting with death.

The final reason for the eye-widening historical prices for spices derives from where it came from.

Today, we understand where the spices came from, whether it be the Maluku islands, the various Malaysian kingdoms, the Middle East, or elsewhere. But in the past, European consumers of spices were so disconnected with their spices that a great many truly believed it to be the product of Paradise, with all the religious connotation that word deserves.

Spices would gain a very morally questionable (at least religiously) connotation once various Muslim kingdoms held a virtual monopoly on the spice trade and the vast majority of spices, by necessity, had to travel through Muslim lands, pay Muslim taxes, and come from Muslim hands.

No small part of the high tax on spice was due to the buyers being Christian or at least going towards Christian lands.

But the exoticism of literally having the fruits of the lands of rumored Heaven/Paradise surely drove demand as surely as the desire for heady spiced foods and medicines.

It was also morally questionable in the eyes of the Church because many spices were seen as strong aphrodisiacs. Indeed, when the clergy partook of spices (and boy did they partake), it was sometimes used as an excuse for when they could not but help themselves but partake in other licentious activities with members of the fairer sex. But where the Church saw something to be condemned, many saw great opportunity, or at least great potential for entertainment!

Spices were absolutely a huge expensive luxury for the nobility and royalty, and certainly not only for use in food. It was also not a necessity for preservation of food nor was it for making ‘rancid food’ palatable. They were exotic, sexy, good for your health, and beyond reproach because of their almost purported divine sources. It’s not hard to see why those who could afford them spent enormous amounts to have them in quantity if and when they could.

EDIT: Some bumbling words about demand and price.

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As the top comment mentions, the cost of the Royal visits were two-way. Once such example where the cost fell on the host is Queen Elizabeth I visiting Robert Dudley at Kenilworth for which he 'spared no expense' - he had been closely linked with her for many years. As well as extending the castle,

there was a Lady of the Lake, a swimming papier-mâché dolphin with a little orchestra in its belly, fireworks, masques, hunts, and popular entertainments like bear baiting. The whole scenery of landscape, artificial lake, castle, and Renaissance garden was ingeniously used for the entertainment.

Source: Henderson, Paula (2005): The Tudor House and Garden: Architecture and Landscape in the Sixteenth and Seventeenth Century

For a Moment i thought we were talking about king harlaus.