Builder’s Risk Delay Claim Analysis: Evaluating Seasonal Revenue Loss in a Hotel Development

During construction of a hotel development project, a delay event occurred that disrupted the planned timeline and pushed the anticipated opening into a later operating period. While the physical aspects of the delay required resolution, the more significant exposure related to the alleged financial impact of postponed operations and lost revenue opportunities.

Because the project relied on projected occupancy levels, seasonal demand, and anticipated operating performance, stakeholders required an independent evaluation to determine whether claimed business income losses and soft costs were directly attributable to the delay event or influenced by broader market conditions and standard start-up variability.

Meaden & Moore was retained to independently review the financial aspects of the claim. By combining forensic accounting methodologies with an understanding of hospitality operations, project timelines, and seasonal revenue patterns, the team provided clarity regarding the true economic impact of the delayed opening and helped stakeholders better understand the drivers behind the claim.

In this success story, we go over:

• Construction Delay & Seasonal Impact Evaluation: Reviewed project timelines and delay documentation to assess how the event affected the hotel’s opening and ability to capture peak seasonal demand.
• Business Income Loss Analysis: Evaluated projected occupancy, average daily rates, and ramp-up assumptions to determine whether claimed revenue losses were supported by data and reasonable expectations.
• Independent Forensic Accounting Assessment: Applied objective methodologies to distinguish between financial impacts caused by the delay and those related to normal operational variability or market conditions.
• Clear Stakeholder Communication: Presented complex financial findings in a clear, structured format, helping insurers, attorneys, and project stakeholders understand the issues and move toward resolution.
  
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