I have travel sites and they started droping after and a really good spring. For me this is normal. They will start going back up when people get back to planning vacations.
You could just being seeing a seasonal fluctuation. How long have you been using AdSense?

Are the ads you have on target? My earnings go down when I get off topic ads.

Take a look at why your traffic is rising through your log files.

Who is referring them, and for what reason?
On one of my sites, among my biggest referrers are sites linking directly to my site, but where the freebies are. These visitors are freeloaders and don't click on ads.

Put another way, those visitors are reaching underperforming pages. What can be done to alleviate that situation? That's the question to ask, but first you have to understand who is sending visitors and for what reason, and to where.

What keywords are they using to reach your site?
HYPOTHETICAL EXAMPLE: Travelers researching their itinerary in Barcelona may not click on ads about flights to Barcelona because they likely already have tickets; they just want to plan their itinerary. Or, if your most important Barcelona pages suddenly start showing ads for Barcelona Chairs.

But you won't know this or be able to diagnose this if you don't know which are your overperforming pages.

This is the reason for creating channels for each section of your site. You can then run a top level report of what sections of your site are doing well and which ones are not. You can then create channels of your most important pages within each section and be able to drill down and see which specific pages are over- or under- performing. By knowing which section is suffering you can review the ads and filter smarter by removing irrelevant ads.

What pages are receiving your traffic?
There was a brilliant post a few weeks back that pointed out that most pages in a website perform poorly, and that the success of a website tended to hinge on relatively few pages.

Creating more pages won't necessarily create more income, especially not exponentially. And likewise, more traffic to underperforming pages won't result in more income.

Anyone else have a reason why a rise in traffic isn't accompanied with a rise in revenues?

It all depends on what the ads are paying. You might be losing search engine ranking to a couple of pages that pay well, and gaining traffic on pages with lower priced clicks.

Or it could be related to how high the different keyowrds have been bid up.

For example, if you specialize in an olympic host city, you might rank poorly in the search engines in the months before the games, so you aren't getting much traffic. But the hotel ads have been bid through the roof, so what traffic you get pays extremely well. You are getting $10/click.

Then the olympics are over. All the sites battling for the olympics traffic dissappear. You suddenly rank at the top of the list, and get all the traffic for that city. Unfortunately everyone stopped bidding up the ads as well. You are getting 50 times as much traffic, but you are only getting $.25/click.

It could just be a seasonal dip, depending on the destination(s) you cover and the nature or interests of your audience.

wmuser -

I am in the exact same position and it is infuriating. I call it the Google Seesaw (TM). It seems that less earnings come with more traffic and vice versa. From my side I can contribute some of it to advertisers leaving the content side of the network.

There was a brilliant post a few weeks back that pointed out that most pages in a website perform poorly, and that the success of a website tended to hinge on relatively few pages.

I think you are referring to this topic martini:
[webmasterworld.com...]

More direct referrals or vistiors from Asia etc. There are many reasons you need to analyze your weblogs of the past months to get the complete picture.