Im assuming its an automatic. If the revs go up (confirming that it downshifts) but you still have no power you may have a problem, but from that information alone it could be almost anything.
And no, you dont need to run higher octane. Contrary to popular belief, higher octane fuel does not have more energy. More power is obtained from higher octane fuel because the engine can be pushed more before it knocks, not because the actual energy in the fuel. You can try to put higher octane fuel and if it runs better or you notice certain noises go away, somethings wrong with the engine. If running higher octane fixes any problems, it is only a band aid fix and you should get it checked out.