Roundtable Discussion: Hospitality Market Trends

TRSA hosted a Hospitality CEO/Executive Roundtable on the eve of its inaugural Hospitality Conference at Walt Disney World’s Coronado Springs Resort in Orlando, FL. Attended by nearly 30 linen, uniform and facility services operators, the roundtable provided a forum for these high-ranking officials to discuss the latest trends affecting the hospitality industry.

TRSA President and CEO Joseph Ricci facilitated the discussion which centered on optimism about growth the in business, coupled with the opportunity for commercial laundries to do even more. Specifically, on the question of hotel laundry outsourcing, several meeting participants agreed that while outsourcing is growing, there’s still roughly 75% of the market for textiles that are processed in house by hotels. This is the opposite of Europe where outsourcing is much more common.

“In the U.S. maybe 75% of the linen is in-sourced,” said one roundtable participant. “There’s a big market out there. Seventy-five percent of the volume is still being done by hotels. As an industry, that’s our biggest competitor, not each other. That’s a lot of opportunity there.”

While U.S. operators have made headway with large hotels processing customer-owned goods (COG), there’s less success with smaller hotels that gloss over the higher labor, utility and machinery costs associated with running on-premise laundries (OPLs). “These no-ironer small hotels (laundries), they’re never going to close,” another attendee said. “They’re so low cost. They’re making up a room, they’re throwing a load in, they’re making up another room.” Ricci added that the TRSA Hospitality Committee created a Hospitality Calculator spreadsheet to help hoteliers confront the reality of how much they’re spending to continue to operate operate OPLs. The European example shows that positive change on outsourcing is possible, and healthcare in the U.S., particularly nursing home care laundries, have shown a similar move toward outsourcing to control costs and improve service.

Other concerns centered on labor—both rising costs and shortages fueled by a robust job market as well as new minimum wage hikes. Regulatory mandates for sick leave for route drivers in cities such as Santa Monica, CA (72 hours), and San Diego (60 hours) also are fueling challenges with rules that create a compliance patchwork for operators. “Now you’ve got every city dictating any trucks going into that city what those driver are supposed to make,” an attendee said. He added that with drivers traversing multiple cities, he has to provide the highest rate to all to avoid complications. Ricci noted that TRSA has retained government advocacy professionals in both California and New York to deal with regulatory issues in those states and other localities to supplement the association’s advocacy work in Washington DC.

Other topics discussed at the roundtable included:

• New and emerging markets and services
• Evolving customer expectations
• COG/NOG versus rental operational requirements (handling COG/NOG, seven-day operations, par levels, managing linen loss, etc.)
• Operations/production resources and best practices
• Hospitality Customer Survey
• Updating the TRSA Hospitality Benchmarking and Linen Life, Loss and Replacement Study

Companies represented at the meeting included American Textile Maintenance, Crothall Laundry Services, Encore Textile Services, Excel Linen Supply Co., General Linen & Uniform Service, Magic Laundry Service Inc., People’s Linen Service, PureStar Group, St. Croix Linen, TLC Linen Services, United Hospitality Services LLC, and more.

The roundtable discussion was followed by a Hospitality CEO/Executive Dinner. Watch for follow-up coverage of the roundtable in Textile Services magazine.