A family affair

Christiane Germain and her brother opened the first boutique hotel in Canada nearly 30 years ago. Today the group has 13 properties and many competitors.

While on a trip to New York City in the mid-’80s, Christiane Germain and her brother, Jean-Yves, stayed at the Morgans Hotel. They instantly fell in love with the midtown Manhattan establishment, located a few minutes from the Empire State Building and Grand Central Station.

The unique hotel, which opened at the end of the 1920s and was renovated in 1984 by legendary French designer Andrée Putman, inspired the Germains, who returned to Quebec City with the idea of opening a hotel. So, in 1988, Hôtel Le Germain-des-Prés was born. Not only was it the siblings’ first hotel, but it was also the first boutique hotel in Canada.

“At the time, boutique hotels were not trendy. We realized we were staying at a hotel that was completely different, with a distinctive design and a service experience that gave it a unique character. We were really comfortable there,” says Germain, recalling the defining moment in her life as an entrepreneur.

The boutique hotel market, which emerged in New York in the 1980s as an alternative to the standardized approach of major hotel chains, would soon experience a real boom. The co-president and co-founder of Groupe Germain Hotels, which now employs more than 1,000 people, saw a good thing coming. “I’ve always had a flair for both concept development and staffing,” Germain says. Her daughter, Marie Pier, who joined the family business in 2006, agrees. “She’s very intuitive and rarely makes mistakes,” says Marie Pier, who has been at the helm of the group’s Alt Hotel Montreal after having managed the architects, designers and engineers who build and renovate Groupe Germain’s hotels.

A BORN ENTREPRENEUR

“I’ve been immersed in entrepreneurship since I was very young,” says Germain, who grew up and lived most of her life in Quebec City. In 1957, her parents purchased a small tobacco shop and lunch counter, where she sat observing the comings and goings of customers.

“I was too young to know that I wanted to become an entrepreneur, but I quickly understood that I wanted to work, to have my own money and make a living. Then, when I began working for others, I told myself I’d have my own business one day,” says the 61-year-old businesswoman.

“I never liked school. When I stopped going to CEGEP [pre-university college in Quebec], my parents told me I had to get a job.” Germain became a savings account clerk at a branch of the Provincial Bank, now the National Bank, where she worked for about a year until a man was hired to do a similar job — but for a better salary. She complained to her manager, who told her, “Your new colleague is a man, and he has a college degree.”

“I couldn’t become a man, but I could go back to school,” says Germain, who received an honorary doctorate from Toronto’s Ryerson University in 2012. So she went to Humber College in Toronto, where she earned a degree in hotel management and became fully bilingual in the process. “I also wanted to step outside Quebec, broaden my horizons, travel and discover the world,” she says.

FROM RESTAURANTS TO HOTELS

Her entrepreneurial journey began in the early 1980s, when her parents opened two restaurants, where she and her brother worked during their high school years.

At the time, Germain had just returned from San Francisco after completing a six-month internship with American chain Victoria Station. “The whole singles restaurant-bar scene was heating up, and I came back with tons of ideas,” she recalls. She shared these ideas with her father, who agreed to invest in renovating and relaunching the one restaurant that was struggling.

After turning that venture into a success, Christiane and Jean-Yves, now in their early 20s, decided to go out on their own and develop original restaurant concepts, combining a nightclub, bar and restaurant on several floors, thus creating the Cousin Germain and Café Saint-Honoré restaurants in Quebec City. “Our father saw our potential and helped us out financially so that we could embark on this adventure.” But the hours were long and exhausting, especially for a young, single mother. They sold the business and began a new venture.

Their trip to New York had been a revelation. They convinced their father to turn an office building he owned into a hotel.

They weren’t skittish about going into the hotel industry, even though, like the restaurant business, it is a high-risk sector.

“Thinking about risks doesn’t keep me up at night. You can’t possibly calculate and plan for everything. At some point, you have to dive in — but just make sure there’s enough water,” says Germain.

Financing was always difficult to come by. “Banks have a hard time believing in individuals. Too often, they base their decisions on numbers and business plans, but in the restaurant and hotel industries, individuals make all the difference,” she says.

To make their Hôtel Le Germain-des-Prés a reality, Christiane and Jean-Yves used funds from the sale of the restaurants and their personal savings. “All our money went into the business. We were hardly paying ourselves a salary, and we had a lot of debt. But we truly believed in the project, and we were sure we’d see it through,” says Germain, who will appear on Dans l’œil du dragon (the French version of Dragons’ Den) next season. “Entrepreneurship is my calling. It’s important to have role models, and if I can inspire other women and young people to go into business, then that’s great.”

A CANADA-WIDE HOTEL GROUP

After Le Germain-des-Prés opened in 1988, followed by another hotel in Quebec City in 1997, the company established a presence in Montreal in 1999 and then Toronto in 2003. Today, with 13 Le Germain or Alt hotels up and running and four under construction, the group operates from coast to coast — or almost. Vancouver is still on the company’s checklist, as it works toward becoming the first Canada-wide independent hotel group.

“We came very close to succeeding on several occasions. But with a real estate market in overdrive and property values so prohibitive, it’s difficult to open a hotel in Vancouver and stick to our philosophy and business model. We’re very disciplined, and if we can’t open a bona fide Le Germain or Alt Hotel (see “Leveraging Hospitality,”), we won’t do it,” says Germain, adding that she is currently exploring a promising lead.

Meanwhile, Groupe Germain is currently building an Alt Hotel in the historic Port of St. John’s, NL. The 148-room hotel, built for $35 million on the grounds of the old Marshall Brothers store, will welcome its first guests this spring. This will be the second Alt Hotel in the Atlantic provinces; the first was opened at Halifax Airport in 2013. The company is also eyeing the port area of the Nova Scotian capital.

Two Alt hotels are slated to open in 2018, one in Saskatoon’s bustling River Landing district and one in Calgary’s lively East Village, with views of the Bow River and downtown. Also in 2018, a Le Germain Hotel will open in Ottawa, just steps away from the Convention Centre, the Byward Market, the Rideau Canal and Parliament Hill. In May 2017, Groupe Germain opened its first hotel in the National Capital, Alt Hotel Ottawa, on Slater Street in the business district.

“We are strategically establishing hotels in trendy neighbourhoods, in business districts and near airports,” says Germain, citing the Alt Hotel that opened in 2014 in Montreal’s Griffintown neighbourhood near the city centre. Alt Hotel Winnipeg opened in 2015 in the new sports, hospitality and entertainment district, within walking distance of the MTS Centre, home of the city’s NHL franchise, the Winnipeg Jets.

PRIVATE AND INSTITUTIONAL INVESTORS

The planned openings will bring the company closer to its goal of 20 hotels in Canada by 2020. “The Alt banner has more growth potential, because most major Canadian cities have a Le Germain Hotel, and it’s becoming more and more difficult to set up shop in strategic areas,” says Germain.

With financing easier to secure now, Groupe Germain’s objective is within reach. In 2011, the company raised more than $80 million from institutional investors such as the Caisse de dépôt et placement du Québec, Investissement Québec, La Capitale Financial Group and Industrial Alliance. This injection of equity capital into the Fonds d’investissement Alt Canada, which was created when the Alt banner was launched in 2007, allowed the company to accelerate the Canada-wide expansion begun in 2010.

Three years later, the hotel group obtained another $80 million during a second round of financing. The Fonds de solidarité FTQ and DNA Capital, a private business bank in Montreal, joined the 2011 private and institutional investors. DNA Capital acted as financial broker, bringing in private investors from Quebec and Europe.

“Not many Canadian hotel companies are listed on the stock exchange, and investors are not used to investing in this industry — unlike Europeans, who give real estate assets a tangible investment value,” says Daniel Labrecque, CPA, CA, and founder of DNA Capital, which specializes in mergers and acquisitions and private debt and equity investments.

“We’re lucky we can count on financial partners who trust us over the long term,” says Germain. These partners include Daniel Gauthier, the co-founder of Cirque du Soleil whose holding company invested in Groupe Germain’s share capital more than 10 years ago and who had a front-row seat to the hotel company’s expansion in the rest of Canada. “Christiane Germain succeeded in creating a brand that is now recognized across Canada. With a French name and no reputation outside Quebec, this was no mean feat. This speaks to her perseverance; her entrepreneurial spirit always shines bright,” says Gauthier, chair of Groupe Le Massif, the company that operates the Massif de Charlevoix ski resort.

MIXED-USE PROJECTS

Groupe Germain’s expansion is also achieved through mixed-use real estate projects. For example, the proposed Le Germain Hotel Ottawa is the fruit of a partnership between Groupe Germain, promoter DevMcGill and construction company EBC. The City of Ottawa chose this consortium to build a 23-storey, mixed-use building that will be part of the Ottawa Art Gallery’s expansion. Representing a $60-million investment from the private sector and $40 million from the public sector (the City of Ottawa and the University of Ottawa), the project includes a 120-room hotel, 82 residences and a theatre.

Alt Hotel Winnipeg — also part of a $100-million building complex with two restaurants and four floors of office space — is the result of a partnership with real estate investment trust Artis REIT and promoters Longboat and Urban Capital. “Mixed-use projects give us access to high-quality sites that would otherwise be difficult to acquire to build small hotels,” Germain says.

FAMILY SUCCESSION

Germain, the soul behind the concept, is in charge of operations for all the hotels. Jean-Yves, who prefers to work behind the scenes, oversees development and supervises the construction of hotel projects. “Jean-Yves develops the hotels, then Christiane gets the keys,” says Gauthier. According to Anne Darche, former ad executive, consumer trend expert and independent member of Groupe Germain’s board, they complement each other. “Their roles could not be distributed any better,” she says.

While the founders have no plans to retire in the near future, a succession plan is in place, as their entrepreneurial mindset has been passed on to a third generation of Germains. Marie Pier can count on her cousin Hugo, Jean-Yves’s son, who joined the company at the same time as she did and is now director of development.

“Our parents never pressured us to take over,” says Marie Pier, who studied mechanical engineering to escape the hotel industry. “It’s as if I tried to convince myself to pursue another career, but something pulled us back in,” says Marie Pier, who recently completed an MBA.

Will the next generation lead Groupe Germain’s next expansion south of the border? “Let’s complete our Canadian expansion first. Then, we’ll see,” says Germain.

LEVERAGING HOSPITALITY

The Germain family established Canada’s first boutique hotel. Contrary to what the term might suggest, a boutique hotel is not a hotel with boutiques in it. It refers to an intimate atmosphere, personalized service, a location in a lively, trendy neighbourhood and a small size (usually fewer than 150 rooms).

“Boutique hotels are not about volume, but authenticity. We are hoteliers, and hospitality is our main focus. Our guests need to feel welcome. They need to feel good about being away from home,” says Christiane Germain, Groupe Germain Hotels co-president and co-founder.

Attention to detail and impeccable service are at the heart of every Germain hotel experience. For example, every Le Germain Hotel room has complimentary Nespresso coffee and David’s Tea. There is no check-out time when guests make reservations with the hotel directly. Also, since March 2016, guests staying at Le Germain hotels in Quebec City, Montreal or Calgary have the use of a Lexus or can be driven by a hotel chauffeur, compliments of the hotel. Some hotels even have charging stations for Tesla vehicles.

These are just a few things that set Groupe Germain apart, not only from major hotel chains, but also from market newcomers such as Airbnb. “The hospitality industry is constantly changing. We need to adapt and evolve our product. Of course, services like Airbnb satisfy a need, but some people will always prefer to stay at a hotel,” says Germain. These are different market segments.

In 2007, Groupe Germain launched its Alt banner, a no-frills chic alternative to conventional hotels. “There was an untapped niche in Canada’s hotel industry for three-star accommodations combining modern design and atmosphere at affordable rates,” says Germain. 

About the Author

Pierre Théroux


Pierre Théroux is a writer based in Montreal.

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