Montreal, city of festivals

The Grand Prix of Montreal is a ma­jor source of revenue for the hotel industry to the point where many accredit its absence in 2009 to a 5% loss in OR. The Canadian Tourism Commission estimates that of the 300,000 spectators of this event, 25% of them are foreigners. It generates $89M (66M€) for the economy, and more specifically, 75,000 room nights. 2011’s Grand Prix enjoys a privileged relationship with the hotel industry because they have linked the websites of 20 area hotels to their own. This type of partnership is becoming more common.Future trends will bring more “lifestyle” marketing techniques in Montreal’s hotel industry. In order to bring in a trendy clientele, boutique hotels such as Opus are not hesitating to use details such as flashy colours and retro-pop furniture to appease the eye of their younger crowd. However, their PR clearly states that their boutique hotel is for the business traveller as well as the tourist. Opus has also crea­ted characters that potential clients can relate to. Their names are Billy, Susan, Pierre, Mike and Dede and they are each represented by one of the flashy colours that adorn their hotel: lime green, blue, bright orange, red and grey. These imagi­nary characters, or “lifestyle concierges” have jobs such as rock-n-roll singer, fashion executive, and doctor. Their ef­forts have not gone unnoticed. They have won an award for conceptual design and are featured in economic journals, style magazines, and travel magazines.Like the Grand Prix, the Montreal Jazz Festival also recommends hotels on its website and even counts the Hyatt Regency amongst its sponsors. This event (taking place from 25 June to 4 July 2011) brings in many foreign visitors from 30 different countries and has secured its place in the Guinness Book of World Records as the largest festival in the world. Around 2 million people attend this festival every year and 34% of them come from abroad, making the Grand Prix a non-negligible event for area hotels. The Convention Center is one of the city’s strongest points. Not only is the building itself an exemplary success (It has been nominated for an Apex prize for best Convention Center), but the events that take place inside its walls fuel the hotel industry immensely. In 2010, Montreal was confirmed at the #1 spot as best host city for international events in North America, according to the 2009 International Congress and Convention Association’s official rankings. This illus­trates to what extent foreign visitors flock to Montreal for meetings. When five new properties opened in 2010, most of them decided to lay their foundations near the Convention Center. In fact, there is a ho­tel supply near the Center that makes 26,500 rooms available to the city’s inter­national guests. Half of these rooms are actually connected to the Convention Center.These types of events and festivals are the result of City of Montreal’s generous commitment to international gatherings and the tourism that comes with it. In its 2010 budget, the City of Montreal allotted $3M (2.2M€) to festivals, $14.5M (10.7M€) for the renovation of various stadiums and $500,000 (370.000€) to cir­cus arts. There is even a 5.3% rise for the culture and leisure budget, bringing its amount to $23M (17M€). Cultural heri­tage will receive the huge sum of $204M (151M€). All of these investments are exactly the reason why this city stays at­tractive and people keep coming back. It is estimated that tourists have a collective impact on Montreal’s economy that is va­lued around $2.1M (1.6M€) and a large fraction of this figure is spent on lodging.However, one of the most exciting urban planning projects in gateway cities today is the creation of a shuttle train called L’Aérotrain that will put Montreal-Trudeau Airport and Montreal’s Central Station within twenty minutes of each other. Construction is expected to last between 24 and 36 months and service is expected to begin before 2016. The price tag on infrastructures is split three ways amongst private investors, the Government of Quebec, and the Government of Canada. Passenger traffic is estimated to grow to 3.8M by 2020. With service from 4a.m. to midnight at 20 minute intervals, Montreal’s popularity as a hotspot for international meetings is also expected to rise, as are the number of hotel nights sold. These international visitors certainly have their fair share of hotels to choose from. In 2010, Montreal’s 17.5M tourists had 31,791 available rooms at their disposal amongst 502 establishments for a total of 6.4M available room nights. 36% of ho­tels are four and five star establishments. 24% and 25% carry three and two stars, respectively. The remainder have a single star or none at all, with the exception of three new establishments that are cur­rently awaiting classification.2010 saw a rise in OR to 65%, (up from 60% in 2009) which reflects a rise in bu­siness activity from foreign partners. There are 1,200 foreign companies that are present in Montreal through their sub­sidiaries and this rise in business equals a rise in business trips from delegates over­seas. These results are a far cry from the previous year. In addition to falling victim to the worldwide ripple effect of the Wall Street crisis, Canadians had to bear the extra weight of being the United State’s first trading-partner and thus losing a large share of business. Furthermore, one of Montreal’s most famous events, Le Grand Prix, did not take place in 2009. Quebec’s largest city has not seen this kind of a drop in OR since the recession in the early 90’s. “It was the worst year in many years,” according to Bill Brown from the Hotel Association of Greater Montreal. Vice-president of the Opus Hotel Group, Katherine S. Evants adds, “The hotel industry in Montreal has been challenged over the past two years with an increase in supply, decrease in demand and challenging economic environment. The impact of a strong American dollar has affected travel patterns and a corpo­rate group business. However we have seen a recent improvement in overall oc­cupancy in the market in the last eight months. Montreal, and Quebec overall have an incredible draw from the European market and also for travel by Canadians within the country.”Holiday Inn and Marriott are the two ma­jor players on Montreal’s hotel market. As of 1 February, The Holiday Inn has acqui­red what used to be the Radisson Hotel Laval, bringing up its total to nine proper­ties and leaving Radisson absent from the market. Marriot remains in close second place with eight properties. Furthermore, there is a notable banner change regar­ding the Hilton Montreal Airport Hotel which will become a Sheraton bringing Hilton’s total to five. Starwood Hotels in Montreal include Aloft, W Montreal, Méridien Versailles, Le Westin, and three Sheratons. Quality Hotel is also very pre­sent with five properties. In addition to Radisson, a second notable absence from the market is the Four Seasons. But on the very high end of the luxury market, the position of the former Canadian Pacific Hotels, now Fairmont, is strong, namely with the legendary Queen Elisabeth.Concerning the boutique-hotel market, there are about eight players on the scene in Montreal, totalling around 1,300 rooms. At 64%, their OR is just a single percent lower than the city average. However, the same cannot be said for their ADR. It is very high at $198 (145€) when compared to the city average of $135 (100€) and growth is expected to continue. Forecasts expect overall OR to rise by 6% in 2011, the highest increase (along with Washington D.C.) amongst major North American cities.There are two notable events taking place on Montreal’s hotel scene in 2011. The Ritz Carlton is scheduled to unveil its $150M (111M€) makeover this autumn. Having closed its doors in 2008 for reno­vation, the changes promise to remain harmonious with the original historic building whilst unveiling modern glass additions that will adorn the future resi­dences. The second event is Germain Group’s announcement that it will conti­nue developing the concept of ALT Hotel throughout Canada, which started in Montreal in 2007.This new concept of no-frills/chic hotels has been developed in a new area of the Montreal metropolis. Quartier DIX30 is a commercial lifestyle centre located in Brossard, on Montreal’s South Shore. It is considered Canada's first lifestyle centre and occupies an area of 255,000 m². DIX30 was designed to emulate an urban or downtown shopping experience with boutiques, entertainment and hotel facili­ties to meet the needs of suburban dwel­lers. Its name refers to its location: at the western corner of the intersection between highway 10 (dix in French) and highway 30. Explaining the concept, Christiane Germain, Co-President of the Group, sta­ted, “An ALT hotel targets a new genera­tion of travellers who are sensitive to the environment, spend in a new way, and have redefined the idea of what luxury should be. An ALT Hotel is a traditional three-star alternative hotel that is modern and trendy. So far, the price tag of each ALT is at $12M (8.9M€), but the rewards and benefits are priceless. “We have every intention of being at the foundation of modernizing Canada’s hotel supply,” states Co-President, Jean-Yves Germain.Recent winner of an Hospitality Award, ALT hotels are becoming popular with foreign and even more Europeans visi­tors, already familiar with the existing concept such as Citizen M. Europeans re­main the highest number of overseas visi­tors to Canada (domestic and cross-bor­der traffic keeps the lead as the overall busiest). However, this lead faded last year as Air Canada reported a 22% rise in traffic from Asia in their December 2010 YTD report, followed by a 10% rise in traffic from Latin America. Visitors parti­cularly from China, Japan, South Korea and Australia left a positive impact on Montreal, having left behind $315M (233M€) in business and leisure expenses. Nevertheless, they will need to keep up this trend for a long time if they want to catch up to those countries that generate most of the revenue for hotels. Destination Quebec stated that domestic travellers and Americans are at the head of the list followed by the French, British and Germans, in that respective order. In fact, the demand is so high that Air France is putting its new Airbus 380 in service between Paris and Montreal as of April 2011. Because of visitors’ additional contribution to the Montreal economy, 55,732 jobs were created in the tourism industry alone. Besides the rise in visitors from Asia, there seems to be another domestic trend happening. Consumers are demanding more independence regarding their com­mitments and wish to have the freedom of changing their minds at the last minute. The hotel industry in Montreal is not im­mune to this new trend. When asked how this precariousness is visible in the hotel industry, The Hotel Association of Greater Montreal stated that conventions and large tour groups are giving less lead time when announcing events and visits. This makes it very difficult to predict what the year’s turnover and schedule is going to be.