For some reason the West coast market is trailing the East coast. Higher-end hotels are doing better than mid-range. NY is doing especially well. But overall a rebound is underway, which means you won't be able to get as many discounted rates at the last minute. From the NYT:
With hotel occupancies rising, room rates have started stabilizing, according to Smith Travel Research. The rates remain substantially below their peak, reached in September 2008. And occupancy rates, in general, are also far below their peak: the average is now 55.8 percent, down from a high of 63.1 percent in November 2007.
There's disagreement on how widespread the recovery will be. L.A. and SF are not likely to start improving until late in the year.