Understanding the non-covalent interactions in host-guest complexes is crucial to their stability, design and applications. Here, we use density functional theory to compare the ability of β-cyclodextrin (β-CD) and heptakis(2,6-di-O-methyl)-β-cyclodextrin (DM-β-CD) to encapsulate the model guest phenol. For both macrocycles, we quantify the intramolecular interactions before and after the formation of the complex, as well as the intermolecular host-guest and host-host dimer interactions. These are individually classified as van der Waals interactions or hydrogen bonds, respectively. The results show a stronger intramolecular binding energy of β-CD, with the absolute difference being −5.53 kcal/mol relative to DM-β-CD. Consequently, the intermolecular interactions of both cyclodextrins with phenol are affected, such that the free binding energy calculated for the DM-β-CD/phenol complex (−5.23 kcal/mol) is ≈50% more negative than for the complex with β-CD (−2.62 kcal/mol). The latter is in excellent agreement with the experimental data (−2.69 kcal/mol), which validates the level of theory (B97-3c) used. Taken together, the methylation of β-CD increases the stability of the host-guest complex with the here studied guest phenol through stronger van der Waals interactions and hydrogen bonds. We attribute this to the disruption of the hydrogen bond network in the primary face of β-CD upon methylation, which influences the flexibility of the host toward the guest as well as the strength of the intermolecular interactions. Our work provides fundamental insights into the impact of different non-covalent interactions on host-guest stability, and we suggest that this theoretical framework can be adapted to other host-guest complexes to evaluate and quantify their non-covalent interactions.