"Middle-range hotels have definitely been lowering rates," says Michelle Finkelstein, vice president of sales at Our Personal Guest, a San Francisco-based travel agency. "A lot of high-end hotels haven't lowered their rates because it's hard to get them back up. So they've been throwing in free nights and other perks." 

See link for full article: http://www.forbes.com/2009/05/15/cheap-travel-recession-lifestyle-travel-cheap-countries.html