Canada -  Montreal Downtown

As Montreal is the major economic engine for the province of Quebec, the performance of the Montreal Downtown lodging market is closely tied to the economic wellbeing of the province. The Montreal Downtown hotel market is mainly driven by the business-services and life-sciences sectors.

The weak Canadian dollar and low oil and gas prices have contributed to the health of the market. In 2015, the Downtown Montreal lodging market achieved a RevPAR of $128.60, which reflects growth of 8.8% cobbled together from increases in both occupancy and ADR. With flat growth in room supply, the market enjoyed a 2.5% increase in demand. Given the favourable economic performance in 2015, the market realized a per-room value of $106,765 that year, up 9.8% from the 2014 level, which is in line with what we had projected in the 2015 HVI report.

In 2016, a 2.1% reduction in the room supply is projected for the market because the 982-room Fairmont Queen Elizabeth was closed in June for a renovation that is expected to take a full year to complete. However, the entrance of four new hotels with a combined inventory of 665 rooms in 2016 and early 2017 will offset some of the decrease in supply in the market from the closure of the Fairmont.

Against this backdrop, the market-wide occupancy is projected to grow by 2.4 percentage points in 2016 while the ADR is projected to increase by 5.0%, resulting in a RevPAR of $139.46, up 8.4% over the 2015 level. With the healthy economy and strong performance, the per-room value for the Montreal Downtown market is projected to jump to $123,190 in 2016, a 15.4% increase from the 2015 level.

The performance of the market is projected to be positive over the next four years. In 2017, when the city will celebrate its 375th anniversary, the market is expected to have a record-breaking year. Demand is projected to grow 5.0% that year, elevating the market-wide occupancy level to 76.5%.

Over the next four years, the room supply is expected to increase by approximately 9.8%. This includes the re-opening of the Fairmont Queen Elizabeth and the opening of the new 163-room Four Seasons Montreal. Following the strong growth in 2016, the per-room value for the Montreal Downtown market is projected to increase to $131,333 in 2017.

In 2018, the market’s per-room value is projected to see only modest growth, mainly because of the influx of new supply into the market and the normalization of market conditions following the 375th-anniversary year in 2017. In 2019, the per-room value is projected to reach $138,251. With this growth, the Montreal Downtown market is projected to jump to eighth place for per-room value among the major markets in Canada in 2019, up from thirteenth in 2015.

Change In Value For Market: ($CAD)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Montreal Downtown RevPAR Change ($CAD)

Montreal Downtown RevPAR ($CAD)

Year RevPAR
2006 $102.15
2007 $97.69
2008 $94.62
2009 $84.27
2010 $97.79
2011 $101.15
2012 $96.56
2013 $104.14
2014 $118.43
2015 $128.60
2016 $139.46
2017 (f) $148.68
2018 (f) $150.12
2019 (f) $154.51

For more information, please contact:

Monique Rosszell, AACI, MRICS, ISHC
mrosszell@hvs.com
  • +1 416 686-2260 (w)