For the first time in recent memory, the average price of a hotel room in New York City is less than $200 a night. Prices are also down in Honolulu, Hawaii, a destination for the kind of lengthy vacations that mainlanders are cutting back on these days.  Across the U.S., the most expensive cities to travel to are also where prices are dropping the most. Where prices are highest, there's more room to drop. And deals have been the order of the day in 2009 as hotel chains battled a rough economy and falling occupancy rates.  Hotels are a lot like houses or airplane seats. Build too many of them during flush times, and you're left with too much capacity. As demand falls off during a recession, prices drop.  The hospitality industry built nearly 400,000 new rooms in the U.S. between 2004 and 2009, according to data from Smith Travel Research, a 9% bump over five years. Meanwhile, average occupancy rates dropped to 55% last year from 60% in 2008.  Falling prices have come mostly from the penthouse or other swanky spots.  "You've got five-star rates getting lowered to compete with the three-and-a-half-star rates," says Scott Booker, a vice president at Hotels.com, an online booking service that provides rooms at 94,000 hotel properties worldwide.  According to Hotels.com's figures, prices paid by travelers for hotel rooms during the latter half of 2009 averaged 12% less than they did during the same period a year earlier.  "We haven't seen these kinds of prices since 2003," says Booker, who adds that specials for goodies like free extra nights for three-day bookings have been more rampant than ever during the past year.
Hotels in New York and Honolulu remain the priciest, though the recession has induced some good deals for travelers.