I have been invited to a graduate recruitment weekend for a school where I have applied for a Master's, and they are offering to pay my travel costs. Unfortunately, this lines up with a vacation for which I have already paid some nonrefundable costs. I have not yet been notified of acceptance or rejection, and would like to go if it weren't for the conflict. Will it hurt my chances of acceptance if I don't go to this event?
No. They are used to some people not coming from conflicts.
Perhaps you should ask them how important they consider this event to be. You could also explain your conflict when you ask. But if they use this as an important tool in choosing candidates it might be good to go.
Since they are willing to pay, it might be quite important to them.
But asking the question will also signal to them that you are interested in the program even if you can't attend the weekend.
The money you have spent toward your vacation is sunk-cost. It is generally a mistake to make decisions based on that. What is best for your future?