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"Where should I stay? I want to be close to restaurants, shopping, nightlife -- well, everything."
This question comes up a lot, and while you can't physically be close to everything, tourists are lucky in that Montréal has a fairly compact inner core that is easy to get around, meaning that unless you choose a hotel out in the suburbs or by the airport, you will probably be just a few blocks from a métro entrance and have a fair choice of restaurants and shops and points of interest and parks and even nightlife within walking distance of your hotel. This is of particular comfort for those using bidding sites such as hotwire or priceline where you don't know exactly what hotel you'll end up with.
Montréal's downtown offers all that standard downtowns do -- office towers, shopping, restaurants, traffic, excitement, and so on. Unlike many North American downtowns, however, it doesn't empty out after 5:00 p.m., but stays vibrant and alive and is safe to explore day or night. Most of the hotels downtown are in highrise buildings, so many offer nice views (facing north gives you views of the mountain, south views of the river). If the weather is nasty, some hotels are conveniently connected directly to the underground passageways: Mariott Château Champlain,Bonaventure, Fairmount Queen Elizabeth, the W, Intercontinental, Saint-James, Westin, Hyatt, and connected to the Berri-UQAM métro is the Gouverneur's. Still others are within dash-to-the-entrance distance: Embassy Suites, le Dauphin, Holiday Inn in Chinatown, the Mariott Residence Inn, and close to the Longueuil métro is the Sandman and above although not connected directly to the Sherbrooke métro is the ITHQ hospitality school that runs a small hotel and restaurant.
The hotels in Old Montréal tend to be smaller, boutique hotels in renovated old buildings, so offering charm and history, although a few have no view better than the building across the street -- albeit probably a very pretty building. Old Montréal is in general quieter than downtown, has beautiful old streets to wander down, horse-drawn carriages going clipitty-clop, some very impressive buildings (in particular Notre-Dame Basilica and the banks along Saint-Jacques), easy access to the river, some very good (and expensive) restaurants, a respectable amount of nightlife both along Saint-Paul in the east or McGill on its western edge, and a great number of art galleries and some chic boutiques. Alas, it also can be a tourist trap, with mediocre restaurants and tourist trinket shops, and in winter the calm can seem almost desolate at times.
Budget - western edge
Budget hotels are for the most part found at the edges of Montréal's downtown. The western edge, close to Crescent Street's legendary nightlife and Concordia University, is more English-speaking, and the university means lot of cheaper student-type hang-outs, although there is a fair amount of higher-end chic to be found -- shopping and art galleries along Sherbrooke by the Museum of Fine Arts, for example, and some very good restaurants as well. The neighbourhood's mix of immigration also makes it very interesting, with lots of Lebanese and south-east asian restaurants and food markets. Alas, aside from some very pretty streets around the Centre for Canadian Architecture and a few old mansions here and there, it's a fairly bland neighbourhood full of nondescript ugly 60's concrete apartment building.
Budget - eastern edge
Montréal's eastern edge is more French, not as built up, and has the Latin Quarter's great nightlife and bars and cafés and restaurants, the Gay Village, and the after hour clubs. Close by are Chinatown and Old Montréal and, heading north, the start of the beautiful Plateau neighbourhood including the charming Saint-Louis Square and Prince Arthur street which leads to the Saint-Laurent club area. The stretch of Sainte-Catherine from Saint-Laurent to past Berri has traditionally been Montréal's red light district, and although it is undergoing a transformation especially around Saint-Laurent, it still is fairly run-down and has its fair share of urban down-and-outs. However, it remains perfectly safe and is very convenient, so if you find a hotel that suits your budget and tastes, no need to avoid the area out of concerns for your safety.
The hotels out by the airport are served by a free shuttle and are convenient for air travellers, but otherwise are a poor choice if you want to explore Montréal at all: transit into town is not the most convenient, with the bus being slow and the trains infrequent outside of rush-hour; travelling by car is better, but Montréal's roads seem to be in a perpetual state of repair often creating bottlenecks even at non-peak times, and parking downtown and in the inner core can be expensive and difficult to find. The airport is surrounded by industrial and suburban sprawl, so not much of interest, although there are restaurants, nightclubs, and malls within driving distance, and Lakeshore Drive ("Bord du lac"), Pointe Claire village, and Lachine are all quite pretty to visit if you don't have time to make it all the way to downtown.
Most of the lodgings outside these areas consist of B&Bs or rental apartments, with the most popular areas being the closest to downtown such as the Plateau or the Village, but there are other neighbourhoods to explore such as Saint-Henri, Hochelaga-Maisonneuve, Little Italy, and so on. In general -- and especially during the cold winter -- it's convenient to be close to a métro stop. If you are looking into renting an apartment, keep in mind that all tourist accommodations (defined as stays under a month) must be registered with the CITQ, which publishes a list of official accommodations in Montreal (an easier way to find the same information is via www.bonjourquebec.com's lists or maps). There are a few hotels scattered elsewhere in Montréal and its suburbs, often offering more reasonable rates and free parking; some are within walking distance of a métro entrance, although the métro ride to downtown can take up to 20-25 minutes and the métro closes at 12:30 or 1:00, meaning an expensive cab ride back if you go out late at night.