The Dutch Consumer Association recently investigated whether one consistently gets cheaper accommodation via online auctions.
Their conclusion: often, but not always.
They tested 10 different bookings and found that the average price was 60% percent lower than the price offered by the hotel directly.
It some cases, however, you can end up paying more than the standard price if you are not cautious.
You also need to be wary about extras. In some cases the auction offer excluded the cost of making the reservation, tourist taxes and cleaning costs, which have to be added to get the actual price that you will pay.
Clearly then, you should first check the normal cost of the services that you are looking for, and then ensure that you do not bid more than that. It is all too easy to get swept up in the excitement of an auction and to pay more than the going rate.
If you book late you can often save money, but there is always the chance that your preferences may not be available. The reason is that hotels make no money from empty rooms. If there is a convention in town, well, then you lose out. But you may be able to snag a bargain. Certain areas have off seasons and establishments that keep their doors open may be very generous indeed with their rates.
For instance, Cape Town in South Africa, has wet winters. They call it their Green Season and pricing is much better than it is in the height of summer. You may be able either to enjoy a holiday that you could otherwise not have afforded at all, or else you may be able to stay in a higher class of hotel than you would otherwise have been able to go to.
Be sure to read the terms and conditions of the auction reservation as they may be more restrictive in some cases than a regularly made booking.