Chapter 8 - The Missing Costs
“In his presentation, those rooms are still earning money.”
Natalie’s reviewer waited while I looked again at the two columns on my screen. The closure schedule beside Daniel’s forecast was preliminary. It could change. But his revenue line didn’t change at all.
“Could these be different versions of the renovation plan?” I asked.
“That’s what we need to establish,” the reviewer said. “For now, please don’t use this forecast in the lender plan.”
After the call, Elena pulled up the maintenance log. She knew which floors had been marked for possible closure and which entries were no more than a contractor’s first suggestion. Simone kept the files open on a separate screen, noting where each figure had come from.
We found an explanation for one apparent discrepancy: two floors listed on the closure schedule had been included as alternatives, not simultaneous work. We crossed them off our list of questions.
The remaining gap did not disappear. Even if the hotel closed only one section at a time, those rooms could not bring in revenue while contractors worked inside them.
Elena pointed to another line in Daniel’s presentation.
“Where’s the cost of moving guests when a room goes out of service unexpectedly?”
I searched the page. There was a general contingency allowance, but nothing showing how it had been calculated.
“We’ve had to do that already,” she said. “When an elevator fails, we sometimes need another employee on a shift to help with luggage. If renovation work makes that routine, somebody has to pay them.”
I had spent years reading the hotel’s numbers. I knew a forecast wasn’t a ledger. Yet I had looked at Daniel’s clean, steady revenue line and felt, for one hopeful moment, that the work might be easier to finance than I feared.
We made three lists: costs supported by current records, costs that needed contractor estimates, and assumptions in Daniel’s presentation that we could not yet explain. Simone sent the reviewer the annotated records, not a replacement forecast dressed up as certainty.
“We should ask Daniel how he built it,” she said.
“Yes. With you here.”
I called Margaret before leaving the office. I told her about the room revenue and Elena’s questions, but I stopped short of putting a price on the gap.
“Was he trying to hide it?” she asked.
“I don’t know.”
“Then ask him. And don’t use my name to make him answer.”
The next morning, Daniel came into Simone’s conference room carrying the laptop she had asked him to bring. He set it on the table without opening it.
I hadn’t seen him since he stood in front of his mother and apologized for remaining silent on the stage. The apology had not changed what he had done. Neither had the sight of him looking tired.
Simone showed him the two files.
“Walk us through the first renovation period,” she said.
Daniel studied the screen. He enlarged the schedule, then the revenue column.
“That schedule wasn’t final.”
“We know,” Simone said. “Which closure schedule did you use?”
“I didn’t use one in the main forecast. I assumed we could time the work around slower occupancy.”
Elena had already shown us that even a slower week still contained reservations. I asked him how he had accounted for rooms we couldn’t sell.
“I thought revenue from the improvements would make up the difference.”
“When?” I asked.
“Once the rooms reopened. We’d be able to charge more.”
“That may happen. It won’t sell a room while its bathroom is being torn apart.”
He looked down at the table.
Simone asked about the contingency allowance. Daniel said he had used a percentage from an earlier capital plan. He could not tell us whether that older plan had included guest relocation, added shifts or temporary service changes. When Simone asked whether he had checked it against the maintenance log, he said no.
We spent nearly an hour tracing his working sheets. Some figures were drawn from reports he had accessed through work with me. Others were his estimates. The more we traced, the more apparent it became that his presentation showed a favorable outcome without showing what had to happen to achieve it.
“I believed we could manage the closures,” he said finally.
“On what basis?” Simone asked.
Daniel rubbed his forehead.
“I didn’t have one I could put in writing. I knew the hotel needed work. I thought if I made the future look possible, Vanessa’s family would bring the money to do it.”
I remembered him as a boy insisting he could jump a flooded stretch of sidewalk without getting wet. Back then, I could offer him dry socks. I had no such remedy for the people working in the rooms he had counted twice.
“You made it look possible by leaving out what it would cost,” I said.
“Yes.”
He didn’t blame Vanessa. He didn’t claim her family had told him to do it. Simone still needed to verify the files he had sent and who had changed any figures afterward. Daniel gave her his working sheets and agreed to provide the related messages. His access to hotel records remained paused.
At the door, he asked whether I had told Margaret.
“I told her about the gap. She knows we were speaking with you.”
“Will you tell her what I said?”
“I’ll tell her what we can verify. She can decide whether she wants the rest from you.”
When I reached our suite, Margaret was sitting beside the window with a cup of tea that had gone cold. She listened without interrupting as I explained Daniel’s assumptions.
“He wanted the money badly enough to believe his own numbers,” she said.
“That’s how it sounded.”
“Does it change what we can do?”
“I think so. We don’t know by how much.”
She turned the cup in its saucer.
“Before we decide anything that affects the staff, they need to hear that there’s a real risk. Not every frightening number we’ve found today. But more than ‘we’re reviewing our options.’”
“We promised them an update next week.”
“We can keep that promise. Elena can help us say what’s confirmed and what isn’t.”
I said I didn’t want people hearing a worst-case scenario before we had firm bids.
“Neither do I,” Margaret said. “But they’re living with uncertainty already. We shouldn’t ask them to trust us while keeping the difficult part to ourselves.”
I called Elena. She agreed to prepare an update for staff with us and Simone: the sale remained undecided, the improvements needed funding, and the forecasts were under review. We would not announce cuts that had not been decided or promise jobs we could not yet guarantee.
Later that afternoon, Natalie came back to the hotel. Her reviewer joined us by phone. Elena brought a corrected range for rooms likely to be unavailable under several possible work schedules. The range was wide; the contractors had not finished their bids. It was also impossible to mistake for steady revenue.
Natalie read through the pages before she spoke.
“I can’t indicate financing on the terms we discussed yesterday.”
I felt Margaret’s absence from the room. She had chosen not to attend, but she would have to live with whatever we decided there.
“Are you withdrawing?” I asked.
“No. I’m saying the amount and timing need another look. If the early work reduces operating income, the hotel may need more cash to carry it than this presentation showed. The final bids and a credible phased schedule matter more now.”
The reviewer added that they would rebuild the projections from approved hotel records rather than revise Daniel’s presentation line by line. Natalie could still consider a conditional indication for the lender, but she would not put a number in it until the costs had been tested.
“And if the lender needs our written plan first?” I asked.
“Then tell them precisely what’s pending,” she said. “Don’t ask them to rely on money I haven’t offered.”
By evening, Simone had drafted a correction for the minority investors. It distinguished the established error—revenue shown without accounting for likely room closures—from expenses still being priced. She sent the same factual correction to Whitmore’s attorney, because Daniel’s presentation had informed their discussions too.
That brought Vanessa to my office just before six.
She had not contacted Margaret since promising to leave her alone. She didn’t ask about her now. She held up her phone, with Simone’s email on the screen.
“My father says this is a disagreement over renovation timing,” she said.
“Some of the timing is uncertain,” Simone replied. “Revenue from closed rooms is the part we can’t support.”
Vanessa read the attached comparison again. “How many people saw Daniel’s presentation?”
“That’s what I was about to ask you,” Simone said.
Vanessa called someone at the Whitmore office from the hallway. When she returned, she gave us the number of investor recipients her office could immediately identify. She said she would have the complete distribution list sent to Simone.
I watched her take in what that meant. The signed proposal was hers. She had not known we owned the hotel when she pursued it, but that ignorance did not erase her responsibility for the figures her family’s business had used.
“Did you know these costs were missing?” I asked.
“No. I read his presentation. I should have asked how he got to the numbers.”
“You also read the staffing plan.”
“Yes,” she said. “I did.”
Neither of us tried to turn that admission into a different conversation. Margaret had made her wishes clear, and the business error needed correcting on its own terms.
“Will your father send the correction?” Simone asked.
Vanessa looked at the names on her phone.
“If he agrees with it.”
“And if he doesn’t?”
She took a breath, then pressed her father’s number. He answered before she reached the window.
“Dad, I’ve seen the comparison,” she said. “The investors got figures we can’t support.”
His reply was too low for me to hear. Vanessa listened, her grip tightening around the phone.
“No. This isn’t about winning an argument with the Bennetts.”
May you like
She looked at the list again.
“I signed the proposal, Dad. I’m going to correct the presentation myself.”
