By far the busiest time of year here in the Canary Islands is Christmas week & especially the week over New Year. Both weeks fill up months in advance even though accommodation prices double. Last-minute deals are very rare for those two weeks.
Whilst most European countries are under several inches of snow and coping witth icy winds and sub-zero temperatures, here on Gran Canaria we're on the beach or by the pool with temperatures in the sun around 25C for most of the day here in the south.
If you want a traditional Christmas lunch then there are plenty of International restaurants serving them though as with everything, book in advance don't be wandering around on the day looking for a table somewhere.
The Spanish celebrate Chrsitmas twice! First is on Christmas eve. Canarian families get together early in the evening either at home or in one o the Spanish restaurants and have their Christmas dinner; typically king prawns to start and leg of lamb as the main course with plenty of cava (Spanish champagne). Whilst santa visits Christmas eve he doesn't bring much, usually one or two gifts. The evening finishes for most of the family a little after midnight though those that really like to party will then go for a night out on the town.
A lot of shops and businesses are open just for the morning on December 24th and closed in the afternoon/evening and all day on the 25th.
The second Christmas celebration is the 5th and 6th January. Tradition has it that on the 5th January the three kings arrive bringing all the Christmas presents for the kids. The 6th is a national holiday with almost everything everywhere closed. In some of the main towns there is a big procession with thousands lining the streets and the kings riding through the streets on camels (Playa del Ingles here in the south with a huge parade in Las Palmas).
Of course there's another celebration, that of New Year itself. Again it's a family affair here on Gran Canaria and tradition has it that during the 12 strokes of midnight, 12 grapes should be consumed (one on each stroke) and you get 12 wishes. Afterwards it's party time everywhere all night long.
For the tourists all the hotels, bars and restaurants have a party night too and celebrations carry on well into the night with January 1st being a holiday and everywhere closed. Just after midnight head outside and look towards the sky as many places have spectacular firework displays.