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Should hotels have in-site laundry or outsource the services?

Klaus Menker
Managing Director
Laundry-Consult International
Dubai / Kiel (Germany)

Outsourcing – Yes and No. In general, outsourcing decision in new hotels is already made during the design stage. These decisions are made without any commercial laundry market evaluations. Finally, new hotels have to live with these decision and you have to work with a third party laundry.

A lot of commercial laundries work with the same / comparable equipment like hotels. Ultimately they have no operational cost benefits. In addition, they have to invest in the equipment as well in the facility (building, trucks, etc.)

Most hotel brands operate as a managing company and the owner of the building has to pay / invest in the equipment and space (new & replacement). The hotel operator itself who has to pay the laundry bill (operational cost) has no investment / depreciation in equipment and has to bear only the maintenance costs.

Our experience in 5-star rated hotel shows, that it is possible to reduce the operational costs by 25% without any investment in new equipment and the same number of staff. If you reduce the operational costs on a professional way it is also possible to increase the quality and hygiene at the same time.

Based on our laundry evaluation and audit programme, 99% of in-house hotel laundries are working with wrong figures! The first step everybody has to do is to figure out reliable figures. The next step is to optimise cost and operation structure. By the way, 99% of low cost commercial laundries are working with wrong figures as well.

You shouldn’t forget a possible higher wear and tear of your linen and you will need a higher par level for a proper service (minimum four). Further, you can’t reduce the costs for valet runner, tailor and the staff who counts the in and out of linen from the commercial laundry.

A key issue as well is the delivered quality and hygiene levels. So you have to check the commercial laundry as well and you have to prepare a professional request for tender with measurable quality and hygiene rules.

If you manage all these in a professional way, outsourcing could be a possibility. But, I don’t see how it should work at the moment in India and some other parts of the world. Finally, it depends on the local situation.

At first you have to figure out your real costs and your cost reduction potential with an independent view on the situation.

  • When a commercial laundry with comparable equipment offers lower prices (compared to operation costs) you will get challenges in quality, service, linen lifecycle and hygiene.
  • Only a state-of-the art equipped and designed commercial laundry with a professional management can offer reliable quality, service, hygiene and comparable /competitive prices. Only with a lower consumption of resources and a lower number of staff can they cover costs.
Akash Dharamsey
Director
ADD Laundry Concepts Pvt. Ltd
Mumbai

I agree with Klaus.

I have owned and operated the largest laundry service company in India known for its consistent superlative quality and service.

My question is (especially for the Hospitality Industry in India): Why is Laundry Service the first to be axed when it comes to costs? Why is it not realised that laundry remains one of the important aspects of a complete delight package for guests?

I would say it is prudent to curtail costs; however, unwise to cut corners.

There are decent laundry service professionals in India who will go that extra mile for clients. I am of the opinion that the future belongs to outsourced Laundry Services in India and the Linen and Work-wear Rental market, although in its infancy will outgrow the OPLs in the next 5-7 years.

There are two main contributors to the success of outsourced services in the healthcare and hospitality industry. One is Industry Compulsion, anything related to manpower is cumbersome – availability, training, retaining, salaries, labour unions and overstretched HR. Real estate is also expensive.

Consider the real estate investment for an average sized laundry. Would a hotel not want an additional banquet hall or a hospital want an additional OT? They are the core revenue building services for the industry. Laundry requires maintenance and operational expertise. I have seen most properties where boiler capacities do not meet the requirement, laundry suffers due to unavailability of steam as the same is diverted for Guest Services (Hot water and F&B). This is simply a case of bad planning and can be rectified.

Add to that the Capex to set-up a Laundry and the Opex to maintain the Laundry.

The second contributor is Engage & Educate. Professional Laundry Service Companies engage and educate their Clients. This was one of the main reasons of our success in the Laundry Service business.

Till the time you do not address a need of the Client, you add no value to the service. When you add no value, you get poorly paid. Educate the Client on the best practices/systems/SOPs, simply not by words but also by followed visible action. Educate on the right quality of linen to be purchased. Explain laundry processes being followed and its benefits and impact on linen.

Rajev S Kumar
CEO
Wasmaatic, Pune

First of all, there cannot be a comparison between rental solutions and in house solutions as the former does not exist in India. The most basic issue of having large and sustainable commercial laundry operations needs attention and that has huge scope. Having cost effective laundry solutions is what this market needs but to arrive at effective and attractive solution, one has to first establish actual existing “costs”.

Globally, it is known that India is a country with second highest population in the world after China. Penetration of detergents is over 90% in the Indian market. In spite of such favourable situation, laundry is still at nascent stage. Organised laundry is more dryclean centric. Awareness level to hygiene and cleanliness is poor. In the recent past, some movements are visible in the domain.

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