ECONOMIC OUTLOOK: Hans U. Wandfluh

April 2010

Hans Wandfluh is a 45 year veteran of the hospitality industry and is currently president of Wandfluh Hotel Consulting, LLC. Hans is formerly the General Manager of The Mayflower Hotel in Washington, D.C. from 1968-1970 and past President of The Royal Sonesta in New Orleans, LA from 1970-2006.

DTD: Hans, I know you travelled around Europe and South America back in the fall for a client- what did you see happening there economy wise?

HUW: The economic activity happening in Brazil was tremendous. The economy is really emerging there because of all the natural resources. The tourism sector is also on the upswing. The hotels we stayed at in Europe were completely booked- even the several thousand dollar a night suites. The amount of people eating in restaurants and shopping was amazing. The least expensive store in one area we visited was Gucci and the store was full of people actually buying goods.

DTD: So, it sounds like I need to be selling real estate in Europe and South America.

HUW: You know the Europeans have a lower individual net worth than Americans do but they were out spending. A lot of the difference has to do with the political climate in our country right now.

DTD: So, the big question on everyone’s mind is when are things going to turn around economically?

HUW: I believe a lot will depend on the midterm elections. There could be some very good pro business legislation enacted depending on the outcome of the elections. If that were the case, we could see a little more confidence come back to the markets which in turn could fuel more hiring.

DTD: And what do you see for the hotel industry over the next 12 months?

HUW: Of course, a lot depends on what area of the country you are talking about. The seasonal properties, such as the beaches, should see a slight increase this year but I am thinking it will be next year before any of us see a marked improvement.

DTD: The prospects we see right now seem to be interested in moving forward with a transaction, whether it be a lease or purchase. But when it gets down to signing the paperwork, the prospect delays the transaction indefinitely. Are you seeing the same thing happen in your arena?

HUW: Absolutely. There is a tremendous amount of cash on the sidelines right now but investors do not seem to be deploying it yet. I am working with one individual that has a substantial amount of capital that he is looking to put to work but he has not been willing to commit any of it thus far. The bottom line is that people do not have enough confidence in the market yet and it’s going to take a little more time before they do.

DTD: Hans, as always, it’s been a pleasure talking with you.