In 2008 Hostelling International Manitoba took over the old Downtowner Hotel in Winnipeg and improved the neighbourhood.  Working with The Forks-North Portage Partnership and local government, the property was fully renovated and what had been a local eyesore, bringing down the neighbourhood, was turned into a modern, clean, dynamic facility.  In order to pull the project together, the plan included a 50-year lease for the hostel.

Unfortunately, after only four years the business is struggling to keep up with its financial obligations.  Having spent almost three million on the renovation, the 120-bed hostel runs at an average of less than fifty percent occupancy.  They may have been, at least partially, victims of the irrational optimism that has been blamed for some of the U.S. commercial real estate boom/bust in 2008/2009. Plus, hostels are usually fairly heavily populated by European travelers, but Europe has had its own financial woes.  Projections showing the need for budget travel accommodation couldn’t have anticipated the effect of these global concerns.

In a market where tourism business is still recovering from the economic downturn, and in a business area where the planned Canadian Museum for Human Rights attraction opening has been delayed by at least two years, a precipitous upturn is not anticipated.  Continuing to pay for the cost of the original construction and servicing the related debt currently has them half a million in the red.  So, Forks-North Portage is working with HI trying to find a way to make the property work financially, maybe even with a new owner continuing the brand relationship with Hostelling International.

Two other business on the premises, the Lo Pub bar and Lo Bistro restaurant will continue to operate until solid plans are in place for a change.  While their fate will be dependent on the outcome of the sale, it is hoped that they will fit in with the future incarnation of the building, whatever that may be.