This is a very good question. One would think that prices would drop with low demand just like Airlines sometimes reduce prices to lure passengers but this basic economies of scale fact seems very foreign to some establishments and the general tendency is to cover overheads by getting as much as possible from fewer visitors hence maintaining a ‘balance’.

Economists will of course argue that this is sensible in manufacturing where the factory must reach a certain income to break even or they will go out of business but then one has to be very cautious about this where competition is very high.

With the service industry, hospitality to be specific the competition is very high bordering on cut throat so resisting lowering of price softening is a sure route to failure. A hotel or lodge with empty beds is loses revenue very much like an empty plane.

While many establishments will stay rigid on prices the reality is that with some serious bargaining discounted stays from competitors are getting snapped up pretty fast through direct deals. Of course the middle man needs to stay in business so you don’t need to be too avaricious, remember he know the best deals so you will definitely need them for your next high season trip.