Empirically, yes, the prices are determined by supply and demand. There is no strategy or rule of thumb that will always work to ensure a lower price. Priceline and Hotwire work with the hotel demand managers to fix prices based on current hotel market conditions. You will not be able to always get it right unless you have the same data that the demand managers have and you can beat them to the punch. Thats why when a convention is in town, priceline and hotwire prices go up as the date gets closer and more bookings come in. Conversely, after a hurricane threat in Mexico, I was able to score a room for $60/night in late August (still peak travel season) at a 5 star resort. This was because all the prior bookings were canceled and room inventory was high. So the real answer is be vigilant and aware of what is going on in the area and try to stay one step ahead of the demand managers.