Photo resolution for final output in a given format and material context from a given vendor is largely driven by the vendor's equipment, software and technical capacity - I'm certain they want vector art as much as they can get it for simplicity, reliability and smaller file sizes... also the demands on their output will be far less intensive if any photos are "vectorised" to be larger areas of flat colour - it's just harder for the client to pick on the quality of their high res images and potential printing issues with fine colour and shading gradients if all those have been removed in the tracing process!
That said, most competent trade-show materials vendors should be used to dealing with high res images, and ANY competent print professional will be able to give you a simple specification for the type and parameters of the print files they will accept from you - this should have data on both preferred overall format (
.svg ) and resolution of any included raster images.
It sounds like there's either mismatched expectations / understanding of the scope / type of the print & production job or miscommunications around the same - I'd ask some really blunt questions first of the vendor, then your client.
"For clarity of communications with my client I find I must ask: are you really telling me you cannot accept high res raster images in the printfiles and require the client to vectorise or image-trace all raster images to be flat colour areas and simple gradients? If so, given that I have a client who explicitly wants high res photographs in their tradeshow tent, should I be directing him to find another vendor who can handle high res raster images in their production pipeline, or can you in fact handle that in your production pipeline?"
And so on.
I used to do some tradeshow booth design work, and even back then, more than a decade ago, it was common to use relatively high resolution, high definition images, and unless they're cutting vinyl for you, they should be able to handle that.
Hope this helps.