Montréal, October 29, 1999 - Old Montréal is ripe for the opening of new hotels, different from those in the downtown district, to meet the needs of a growing clientele. This is the conclusion of a market study done by Horwath Consultants for the Société de développement de Montréal (SDM), Tourisme Québec and the Ministère des Affaires municipales et de la Métropole.

Favourable signs

The consulting firm examined the main socio-economic indicators (rising employment, value of construction permits, industrial and commercial investment and office occupancy rate) and found that they all pointed to a healthy economic situation and a favourable outlook for the greater Montréal area.

Other factors are also encouraging for this kind of development. There are a number of projects that will strengthen ties with the historic quarter and attract more visitors: the expansion of the Palais des congrès (which will become one of the gateways to Old Montréal), the development of the International Quarter (leading to the creation or redevelopment of several public squares), growth of the Cité du multimédia (adjacent to the historic quarter) and the opening in May 2000 of the Montréal Interactive Science Centre in the Old Port. In addition, tourism is growing significantly in Montréal-the city had its best season this year since Expo 67! Old Montréal, with 3.5 million person-visits in 1998, is one of the most important parts of Montréal's tourism product.

An occupancy rate approaching saturation

In 1998, the hotel occupancy rate in Old Montréal and its catchment area reached 70%, or the same rate as elsewhere in the city. Given the seasonal nature of demand in Montréal, this rate means that the hotel market is saturated at certain times of the year!

Comparing trends in supply and demand for hotel rooms throughout downtown and in the Old Montréal catchment area, Horwath Consultants found that demand in Old Montréal is not a response to overflow from downtown hotels, but rather results from the needs of the local market.

The rising occupancy rates in Montréal have made it possible to adjust the average room rate and led to an appreciation in the value of Montréal hotels, thereby encouraging promoters to consider new projects.

Encouraging forecasts

Drawing on these analyses, the authors of the study prepared forecasts of hotel supply and demand in Old Montréal over the coming decade. The forecasts take account of projects now in the planning stage, and are based on assumptions of annual economic growth of 2.5% for Québec and a 65% occupancy rate.

The forecasts based on these assumptions show that the hotel market in Old Montréal and its catchment zone could support from close to 1,200 new rooms (conservative scenario) to almost 1,550 rooms (optimistic scenario).

Distinctive products for the historic quarter

The study by Horwath Consultants identified three main types of products likely to meet the needs of clientele in Old Montréal:

• a conventional first-class hotel product, comprising 350 to 500 rooms, compatible with the requirements of the expanded Palais des congrès;
  
  
• a "boutique"-style hotel product, first class or intermediate-superior class, to stand out from conventional hotels because of its unique design, comprising 50 to 150 rooms;
  
  
• finally, an "inn"-type hotel product, intimate and personal, first class or intermediate class, comprising fewer than 50 rooms and reflecting the historic cachet of Old Montréal.

Horwath Consultants feels that the "inn"-type hotel rooms may well have the most in common with the character of Old Montréal, given the large number of historic buildings that could be converted for hotel purposes.

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Source:
Lorne Jackson, Société de développement de Montréal,
(514) 872-6221

Information:
Horwath Consultants,
(514) 284-7720