What causes hotel rates to vary so much depending on time of day or day of week?

It’s all a matter of supply and demand! New York City is immensely popular in the weeks leading up to Christmas so hotel rates are highest during that time. Seattle peaks from May-September due to the popularity of Alaskan cruises leaving from there. Phoenix is lowest in the summer when the heat keeps tourists away and rises in the winter when the moderate weather attracts people looking for a mid-winter escape. In addition to the obvious factors there are some that may not be so clear. For example, if there is a “city wide” convention (i.e. really, really big) in town one week that has a large portion of the rooms reserved there will be more competition for the remaining rooms and higher prices. A hotel that caters to business travelers will almost always have lower weekend rates when occupancy is down, and a hotel that gets most of its business from leisure travelers taking long weekends will offer lower rates for Monday-Wednesday nights.