It's very much dynamic, with only a few fixed elements. Rates are coded in the various GDS (Global Distribution System) providers that the hotel & their agents use to sell the rooms, and while some of the rate codes stay constant, like an air fare bucket does, the price for those rate codes still varies (also like an air fare bucket!).
The revenue management function for a hotel looks at inventory and demand, together with seasonal and specific event data (ever tried to book NYE?) to set and adjust the standard rates and rates on offer. They work with marketing on what and when the sale offers should be, and what inclusions and benefits can be bundled for the various rate offers. In the case of your Junior Suite increasing, they may only have a small inventory of suites, and the demand of you booking one suite could cause a tweak in the going rate for the other/s. As it gets closer to the stay date, if they haven't sold the room/s, they may choose to reduce the rate, or potentially offer those that have booked a standard room an upsell to move to the junior suite, leaving them with the easier prospect of selling the standard room (corporates will usually only have these room types in their programs). They might also increase the rate to make it appear more desirable as it becomes last minute, and if they are happy with the revenue forecast for the period already. This has the added benefit of limiting impact to its perceived value.
Just some notes on aggregator rates, like what you would get on Booking[.]com and Expedia, etc., as they are different to this. They are often a prepaid for resale rate. They buy room nights by date in bulk from the hotels, and then on-sell to the public. They are often heavily discounted, or 'distressed' inventories that the hotel doesn't expect to sell, or can't be bothered to sell direct, and is why you struggle to get loyalty benefits on these rates. The hotel has already sold these rooms to the aggregator before you buy from them. As the time draws nearer, these rates might be discounted further so the aggregator can cut their losses. This said, most aggregators also act as a regular online agent as well, selling the same or similar rates that the hotel publishes, with flexibility and loyalty benefits then being more likely (though still not guaranteed) to be available.
Sorry for the brain dump - couldn't stop once I got started!
EDIT: to add that this is my understanding of it... it's not anything official and it's not my profession... though I have worked very closely to it as a global corporate travel manager within a broader role.
Cheers,
Matt.
