What's the best time to get "last-minute" discount hotel prices?
Some online travel sites (I'm thinking of Hotwire specifically, but the question applies more generally) offer low rates on high-quality hotels if you're willing to not specify exactly where you want to stay. As I understand it, these rates are possible because the hotels would rather have a room occupied than not, even if they're making a minimal profit off it. So I would think, if you're using one of these sites like Hotwire, the cheapest hotel rate they can offer should get lower as you get closer to the date of travel. Is that actually the case?
In my case specifically, I will be attending an event in Boston in about a month. The lowest hotel prices I'm seeing close to the location of the event are around $200-250 right now, but I'm wondering whether those are likely to get any lower in the few days prior to the event itself. (I'm aware that there are other ways to find accommodation on a budget, but I'm just researching my options for now.)
Hotels, like most travel services, work very much on a supply-and-demand basis.
If the demand is high, then prices will go up, and eventually hotels will sell out even at the higher prices. If the demand is low, prices do sometimes come down over time - although frequently the hotels themselves will not want to drop their prices below a certain level, which is where opaque bookings like Hotwire/Priceline come in, selling the hotels excess inventory depending on how many free rooms they have.
Priceline/Hotwire prices definitely do vary significantly night-to-night for the same properly, based primarily on the hotels expected occupancy rates. This means that as the date gets closer, the price may drop, but it may also rise or even not be available at all.
Depending on the size of the event you're attending it's even possible that it will have an impact on the number of rooms available - frequently it's difficult to find any rooms available in an area, let alone cheap rooms, if there is a major conference/sporting event/etc occurring at the time. As the event gets closer, room availability gets lower, prices get higher, and opaque booking venders end up getting allocated zero rooms to sell!
If you must have a hotel, it's often a good idea to find somewhere with a good cancellation policy (eg, allowing you to cancel up until at least a day or two before the event) - this gives you the certainty of having somewhere to stay if prices go up, but also allows you to keep looking/bidding for cheaper rooms as the date gets closer. If you find somewhere cheaper, simply cancel your initial reservation!