Its all about supply and demand..

Tour ops have computer programs in place that moniter activity to hotels, destination, dates etc and add discount accordingly to any areas that are not selling well.

Hence why if you search for mid-august to a family hotel in Spain, your unlikely to get much discount!

Debbie I have seen the prices change by the hour if you ask me its luck too at times ..colleen

Prices do fluctuate and normally go up for the weekends.
What we do is decide the hotels we want to stay in and then check the prices out.
When the prices match something we are prepared to pay we book, however we may not reach that point and so go without or find an alternative.

I mention multiple hotels because we were once looking at East Cuba where there are about 8 hotels in a stones throw. We narrowed the choice down to hotels we wanted to go to and then those we could afford. I kept an eye on the prices and strangely one of the ones we could not afford dropped a couple of hundred and came down to within £25 of the hotel I was watching which did not drop much at all.
We went the extra £25 and had a fantastic time.

Be warned though that there was a bug on the website if you clicked on the sit together option while checking prices. Any change to accomodation or party make up was totally ignored if you clicked back on the option and you were returned to your original holiday and pricing. I did report it but it had still not been fixed the last time I used the site.

I couldn't get a decent price I was prepared to pay in 2007 and so ended up phoning an alternative TO who provided us with a better holiday at a much better price. No use to you though as they specialise much further west.

That's how I do it too Steve.. pick a decent handful of places we'd like to go to and monitor the prices of them all until one comes down to our target price. The holidays aren't even same resort or board basis sometimes. Like now, I'm tracking an 2 AI in Ibiza, 2 SC in Ibiza and 3 SC in Crete. Been watching since about November.

It is basically all demand & supply, but the market is not perfect as the tour ops have all the data about the market. So the consumer is at a disadvantage.
Prices are set by the yield teams whose aim is to maximise the returns from there regions/resorts. If a particular holiday is selling well the price goes up, if the flight is selling well, all holidays serviced by it go up, they will run promotions when things slow down but they may not be as good as they seem cos the base cost will be higher.

Just remember - The only number that matters is the total, doesn't matter what % discount, or what extra luggage charges etc... £750 is less than £700 + £60 in extras every day of the week!!!

Thanks for your replies, I am still keeping an eye on it!
Debs x