Never Tell (May Moore Suspense Thriller 2)
CHAPTER SIX
As soon as Featherstone had left, May got online and went hunting.
“Remember, I mentioned the complaints tailed off in the past couple of weeks,” Owen said, paging through the folder as she searched. “I wonder if this is the reason why. It seems like a lot of people must have read that article.”
“Here it is,” May said. “This is the one. Look, it’s in the financial section of the Tamarack News.”
Unfortunately, she seldom read that section. Usually, the community news was more relevant to her job.
She was astonished to see the headline.
“The Lakeside Heights: A Doomed Project.”
“What does it say?” Owen asked.
“Here’s the introduction,” May read out. “The big, beautiful new hotel… and the total financial failure it represents. The story behind the property that is doomed to failure. Read on to find out why.”
“Wow. That’s very hard hitting,” Owen agreed. “Go on. What else does it say?”
“The problem with the Lakeside Heights project is that it’s not viable,” May continued. “They’ve bought up a load of land in a remote location, and they are building a huge and spectacular hotel there. Everyone who has been to the site so far has been impressed with the hotel—but what the company hasn’t told investors is that the hotel, when it opens, will only make a profit if the entire resort is crowded with guests 24/7. And in this sparsely populated part of the world, that’s not possible. The hotel miscalculated badly. With plans afoot to build a second wing, they need to go back to the drawing board and be aware of who their customers are.”
She glanced at Owen, knowing that his background was in accounting.
“That sounds like a knowledgeable piece,” he said. “If they’ve overcapitalized, that’s a very serious error and they are going to suffer for it down the line.”
“The hotel has potential in terms of the site, but it is being developed too fast and too broadly for the local market to be capable of carrying it,” May read. “A second wing will only compound the disaster.”
Owen raised his eyebrows.
“But the company doesn’t seem to be aware of this fact,” May said. “From what I’ve seen, they’re still planning to go ahead.”
“Until they discover that they can’t turn a profit,” Owen said. “If they are still in denial, they are going to be in trouble. Many businesses have hit the rocks as a result of not understanding their market.”
“There’s more here,” May said. “In this remote area, it’s essential to know who your market is, and also to cooperate with the locals,” May read. “It’s not just about business. The company has not cooperated with locals. Financially, in their quest for domination of the market, they have bought up a lot of the surrounding land, and this in turn has driven up the price of land in the area, and that has made it more expensive for everyone else. In fact, the tax base is going to be damaged by this project.”
“That’s true,” Owen said. “That’s not how business should be done.”
“Can you hunt for anything more specific about their financial dealings?”
“I can try,” Owen said. “But if they are still working on the hotel, they must be confident of finding the money to finish it.”
Perhaps we should speak to the journalist?” May asked.
Owen nodded. “I see here it’s written by the financial expert Emily Oxman. Let’s have a word with Emily. There might also be information she didn’t, or couldn’t, write.”
May dialed the number of the Tamarack News.
“Hi, I’m from Fairshore police, and I need to speak with Emily Oxman. It’s urgent,” she said as soon as she got through.
She waited while they put her through. A moment later, someone picked up.
“This is Adele Wong, the financial editor,” a woman said.
“Ms. Wong, we’re looking to speak to the journalist who wrote the article about the Lakeside Heights,” May said.
“She’s not in. She’s out researching a story. But I managed and edited the article, so maybe I can help,” Adele said.
“This is about a murder investigation,” May said. “We’re investigating the death of Danny Charter. He was the architect in charge of the hotel project, and he was murdered last night.”
“Good heavens! Murdered?” Adele sounded shocked.
“I’m hoping that we can get some background information on the project. We’re wondering if this bleak financial outlook might somehow be related to what has happened. Is there any more information you could give us? Did you get any more information from the company? Or from other sources?”
“I was the one who first researched the hotel, and then handed the article to the journalist to write. So I can definitely help,” Adele said.
“Please explain,” May said.
“I started out looking into the land purchase, but as I looked into it, I got more and more concerned about the finances. I realized that this company had taken on a huge amount of debt to build the hotel and start the development. And that they were planning to take on some more. What that means is that this is a highly speculative investment. It’s a huge gamble. Every hotel comes with huge costs. Mostly in terms of staffing, especially for a high-end establishment. You have cleaning, housekeeping, maintenance, porterage, reception, waitressing. Never mind the initial build, I just don’t understand how they will cover those. Labor costs are the biggest expense to any hotel, and I think at the moment, those represent more than forty percent of the total costs.”
“That’s significant,” May agreed.
“So, therefore, I concluded that unless the hotel is completely full all the time, it won’t make a profit. And that is unlikely to happen.”
May thought for a moment. “What else did you find out?”
“There is usually a risk assessment report done before a project like this is approved. I was able to get hold of a copy of that report. As far as they can tell, they can’t foresee any risk large enough to prevent them making a profit. But, as far as I’m concerned, that’s just wishful thinking. The fact is, they have not done their homework. They have not done enough market research, and they have no idea how many guests they can expect to have or what revenue they can expect.”
“Did you speak to the hotel at all?”