New Developments Bring a Wide Array of Hotel Opportunities to Once Overlooked Suburbs
How 3 Quebec Projects Illustrate a Growing Hospitality Trend
Quebec’s suburbs have evolved significantly over the past several decades, as they have become denser and as new developments and services have been built. The pandemic precipitated the exodus of thousands of Montrealers into the suburbs, according to many studies by institutions such as Statistics Canada.
Suburbs are becoming more populous; many suburban cities feature in the 15 most populous cities in Quebec, according to Institut de la statistique du Québec, such as Laval (the third most populous city in Quebec), Longueuil, Terrebonne and Brossard.
With this surge in suburban population, one sector that has also seen growth might come as a surprise to some: hospitality. Perhaps the first significant suburban hospitality project in Quebec dates to 2007, when Germain Hotels made the (at the time rather risky) decision to open Alt Hotel in Quartier DIX30 in Brossard in September 2007. “It became the prototype, the first Alt Hotel in Canada. Now we have a dozen in different provinces,” remembers Hugo Germain, Vice-President of Operations at Germain Hotels.
The Quebec-based business decided to open a hotel at Quartier DIX30 due to its trust relationship with Groupe Devimco, the project developer. “We were invited to imagine a hotel for the would-be Quartier DIX30. You have to remember that at the time, it was just a big field,” he remembered.
The promoter’s vision for a gigantic lifestyle mall was uncommon in the suburbs at the time, but Germain Hotels believed in the project. The 158-room Alt Hotel was created in collaboration with architecture firm LEMAYMICHAUD, which offered to build a 15-floor vertical structure at the intersection of highways 10 and 30, providing excellent visibility.
Mixed-Use Is Good for Everyone
What makes a lifestyle mall like Quartier DIX30 interesting for a hotelier, according to Germain, is that the differing clienteles of the overall project — corporate office workers and business travelers during the week; tourists and leisure shoppers on weekends — align with a hotel’s typical customer delineation.
“What we see in a framework like the DIX30, it’s that during the week, it’s busy with corporate reservations, and on the weekend, people come to shop, eat at the restaurant, or see a live show at the theater… And so, the mixed-use aspect is excellent,” he explained.
It took a few years for the project to stabilize, but eventually, Alt Hotel at Quartier DIX30 was performing at a level equivalent to comparable urban hotels. In fact, things were going so well that Germain Hotels decided to open a second hotel in 2019, this one from their higher-end Escad range.
According to Germain, Alt Hotel is more popular for clients who are staying a night or two, whereas those who stay at Escad typically unpack their luggage for a few more nights. “With Escad, we created a product that was more ‘loft’-like for a longer stay,” he explained. “The rooms are a little bigger and very luminous.”
During the week, the clientele of both Germain Hotels at Quartier DIX30 is more focused on work. With the proximity to highway 30, many businesses in the fields of technology, aerospace, consulting, and more are located nearby. On the weekend, clients come for leisure.
“People do not necessarily want to come to Montreal. They want to come to Quartier DIX30 and shop,” he explained. Quartier DIX30 is the second biggest mall in Canada, according to its website, and features more than 300 stores. Germain notes that girls’ weekends are particularly popular in both hotels due to the many services offered close by, such as spas, restaurants, and a performance venue.
Suburban Hotels, the Next Generation
The DIX30 concept proved so popular that it began to catch on elsewhere. Solar Uniquartier, a similar mixed-use development, is gradually opening on the other side of highway 10. Solar Uniquartier contains more than 400 000 square feet (37 161 square meters) of commercial space and more than 600 000 square feet (55 741 square meters) of office space, and 4300 residential units are being built. And, like its predecessor, Solar Uniquartier features a hotel; the Courtyard Montreal-Brossard opened in June 2020.
Before the opening, a market study determined that there was significant demand in the area for a hotel that could host large events, according to Anne-Sophie Aubé, sales director at Hotel Courtyard Montreal-Brossard.
“The ambition of the Marriott International chain was aligned with the ambition of Solar Uniquartier to create the downtown of the South Shore,” added Aubé.
She explained that one of the big benefits of being located on the South Shore, as opposed to being in the city, is the access to free parking. And because these mixed-use developments offer so many services, restaurants and shopping options, visitors have plenty of pedestrian access once they’ve parked.
According to Aubé, since the hotel has a mostly corporate client base, the location within Solar Uniquartier was strategic, especially since many businesses, including Bonduelle, are moving their offices into the new real estate development. “The hotel is easily accessible for the many businesses located in the industrial parks nearby,” she said.
The many commodities close by are also helping to attract clientele. “We tend to joke to our guests that one stay will not be enough to discover all of the attractions near the hotel,” Aubé said.
The mixed-use factor was also what persuaded Urgo Hotels to open a Courtyard by Marriott at Espace Montmorency, the new mixed-use complex which will gradually open its doors a stone’s throw from the Montmorency metro station in Laval in June 2022.
Starting in 2017, Urgo Hotels Canada was in discussions with the other development partners of Espace Montmorency — MONTONI, Groupe Sélection and Fonds immobilier de solidarité FTQ. The hotel comprises 188 rooms and suites and is poised to open at the end of 2022 or the beginning of 2023. It will feature meeting rooms, restaurants and a large terrace overlooking Espace Montmorency’s public square.
“The hotel is in the newly developing Laval neighborhood where there are live events, bars, and patios. This project had every winning attribute for a hotel, which is why we became interested in it,” explained Serge Primeau, Associate Director and President of Urgo Hotels Canada.
Besides the many services offered at Espace Montmorency and nearby, the new Courtyard by Marriott is a few steps away from Place Bell, a large-capacity venue where the Laval Rocket professional ice hockey team plays.
Urgo Hotels was looking to settle in Laval for years. “Laval was, at the beginning of the pandemic, one of the most dynamic markets in Quebec. It’s a market that offers growing occupancy rates, which were very high,” explained Primeau.
Laval is a choice destination for a hotelier due to its industrial basin that continues all the way to Mirabel to the north, and Saint-Eustache to the west.
The Public Transit Advantage
Hotels in the suburbs were previously rather inaccessible to public transit users, but that’s not the case in Quebec today, which may be one reason why internationally recognized hotels are increasingly settling outside the city.
The Alt and Escad hotels in Quartier DIX30, as well as the Hotel Marriott Montreal-Brossard in Solar Uniquartier are a short walk from the new REM (Réseau Express Métropolitain) station, which is poised to open in 2022.
Likewise, the Courtyard by Marriott at Espace Montmorency will sit directly above Montmorency metro station. “Few hotels can have such a simple access to downtown by metro,” said Primeau.
A Side Effect of the Pandemic
The suburban hotel market’s success is in part a side effect of the pandemic, according to Laura Baxter, Director of Hospitality Analytics for CoStar Canada.
“People avoided cities because of the lack of reasons to go, but also because of the proximity and the high density, as everyone was trying to avoid getting COVID,” said Baxter.
Suburbs thus took a more considerable market share from the beginning of the coronavirus pandemic onwards. From January 2020 to March 2022, suburban hotels in Quebec recorded higher occupancy rates than hotels in cities.
For example, in August 2021, occupancy rates in hotels located in the suburbs in Quebec were at 63% compared to 43% in cities.
Baxter explained that upper midscale and upscale hotels located in the suburbs have seen the most growth, and that they recovered from the pandemic quicker than hotels in city centers.
“As the industry started bouncing back slightly, suburban hotels started outperforming urban hotels quite significantly, and that has been the trend ever since the pandemic started,” added Baxter. The CoStar statistics used for this article are as of March 2022, so only time will tell if this trend continues.
The Future of Hospitality in Suburban Quebec
In any case, as the suburbs become denser and as more and more services are made available, everything indicates that hotel opportunities will keep growing.
“Ultimately, I think that density brings beautiful opportunities,” added Hugo Germain. “I see this positively. There are residents who live in the area who come to the restaurants, and others that will sometimes need housing for their guests… I think that people attract people.”
This point of view is shared by Serge Primeau. “We slept for two years, but when we woke up, we were happy to see that suburban markets are more dynamic with their recovery than what we see in big urban centers,” he added. “Often, the suburban hospitality market is a second-rate hospitality market, and with these few new projects, including the one that we are adding, it’s very much a first-rate hotel market, from the perspective of their design and components. We are offering high-quality options for the suburbs of Montreal.”
Real Estate
Wenston DeSue is a realtor, organizational consultant, design, construct, build expert and developmental networker. Real estate is the business of exchange and affects every person on the planet. Real estate on all levels represents resources, access and ultimately, power. Knowledge is power…
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