Canada’s tourism sector enjoyed a record-breaking summer, generating $59 billion in revenue between May and August 2025. Though, the boom wasn’t global, with Montreal lagging behind other major Canadian cities in hotel performance, according to a new report from Cushman & Wakefield. The discrepancy is attributed to a surge in hotel capacity in the city, even as overall Canadian tourism was bolstered by strong domestic travel-Canadians accounted for 75% of tourism revenue during the period.
Canada’s hospitality sector experienced a record-breaking summer, generating $59 billion in revenue between May and August 2025. However, a new report from Cushman & Wakefield indicates that Montreal lagged behind other major Canadian cities in its performance, a trend local tourism officials attribute to increased hotel capacity.
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The surge in revenue represents a 6% increase compared to the same period last year, driven largely by domestic tourism. According to the Cushman & Wakefield report, Canadian travelers accounted for 75% of total revenue within the Canadian tourism sector, with international visitors contributing the remaining 25%.
While nine of Canada’s ten largest tourism destinations saw growth in hotel occupancy rates and revenue per available room during the first three quarters of 2025, Montreal experienced a decline. The city’s occupancy rate fell by 5.8%, and revenue per available room decreased by 3.9%.
Factors Behind Montreal’s Underperformance
Several factors contributed to Montreal’s negative results, including the loss of government contracts for hotel room bookings near Montréal–Trudeau International Airport and a decrease in American tourists. However, tourism officials emphasize that a significant increase in hotel supply is the primary driver of the downturn.
“The industry data shows that Montreal is going through a cycle where supply and demand are evolving at different rates. This year, hotel capacity has increased by about 3.5%, particularly with the arrival of new establishments,” said Dominique Villeneuve, President and CEO of the Greater Montreal Hotel Association.
The increase in hotel rooms, which has grown by 11.5% since 2019, is distorting the overall picture, according to both Tourisme Montréal and the Greater Montreal Hotel Association. This expansion of supply is a positive sign for the city’s attractiveness, but it mechanically impacts key performance indicators like occupancy rates.
“We needed growth near the airport, and that’s what drove the significant increase in the number of hotel rooms since 2019,” explained Yves Lalumière, President and CEO of Tourisme Montréal. “Developers saw an opportunity and capitalized on it.”
Currently, Toronto boasts 51,000 hotel rooms, down 0.4%. Vancouver has 31,000, a decrease of 2.8%, while Montreal also has 31,000 rooms.
It’s certain that artificially, if you reduce the number of rooms by 2.8%, your occupancy rate will inevitably increase on the other side. Montreal has experienced the largest growth in hotel rooms in Canada.
Yves Lalumière, President and CEO of Tourisme Montréal
The Cushman & Wakefield report highlighted Winnipeg as the leader in revenue per available room growth, with a 24.7% increase, due to the temporary accommodation of thousands of people evacuated due to wildfires. Halifax followed with a 16.2% increase, benefiting from increased direct flights and a shift in Canadian travel preferences away from U.S. destinations.
Montreal’s winter season got off to a slow start, with a 17% decline in March attributed to tariffs imposed by the previous U.S. administration, according to Tourisme Montréal’s CEO.
“However, Montreal has an average rate of $247, which is still $20 above the average for major cities in the country, even with the increase in inventory,” emphasized Yves Lalumière, expressing satisfaction with the city’s overall performance.
Montreal’s Market is Distinct from Toronto’s
“You can’t compare Toronto to Montreal,” stated the President and CEO of Tourisme Montréal.
“If you give me 80 concerts from Live Nation in Toronto, with Taylor Swift-level performers, a winning baseball team like the Blue Jays, and three convention centers, we wouldn’t achieve the same results,” he explained.
Lalumière added that if organizations choose to hold their conventions in Vancouver, prices will be exorbitant due to a lack of hotel capacity. The same challenge would face a middle-class family seeking a four-star hotel room, which currently costs $325.
“We are ahead of the curve because we’ve experienced growth in the number of hotel rooms and we want to attract visitors to our destination.”
Both Cushman & Wakefield and Tourisme Montréal base their data on information provided by the American firm CoStar.
