Revathi Murugaiah, Sales & Customer Success Manager at Dr. Linen & Rent a Towel
If any doubts remain about the primacy of linen and laundry outsourcing over in-house linen management, Revathi Murugaiah, Sales & Customer Success Manager at Dr. Linen & Rent a Towel dispels them with hard facts and numbers.
What are the misconceptions and apprehensions they normally have about renting linen? How do you convince them otherwise?
As the linen rental model is just getting into practice in India and Middle-Eastern countries, the sales cycle is a bit longer and the mindset of hoteliers to move from the age-old method of maintaining linen towards a lean model is slowly gaining traction.
Misconception: Renting linen is more expensive than purchasing it:
Explanation: While the initial cost of purchasing linen may appear cheaper, the cost of maintaining and replacing it can add up over time. Renting linen eliminates the need for in-house laundry services and maintaining a huge Capex buy off inventory. Additionally, the rental model ensures that fresh, clean linen is always available for guests or patients and provides the flexibility to adjust the quantity of linen needed as per fluctuating seasonal demands. It is a myth that the rental/leasing model is more expensive than the traditional ones. This model works very well for any star and any size of hotels to use and pay for what is used for the day.
Misconception: Renting linen means compromising on quality
Explanation: The quality of rented linen can be just as good as purchased linen, because the longevity of the linen is important for the rental service provider. Additionally, the linen rental company assumes the responsibility of laundering, inspecting and replacing damaged or worn-out linen at regular intervals, thus ensuring a consistently high standard of service quality. In this model, the customers do not have to worry about the ageing process of the linen and the challenges to allocate budgets for their purchase.
Misconception: Renting linen is not hygienic
Explanation: Professional linen rental companies have strict protocols in place to ensure that their linen is processed in an industrial laundry facility, maintaining strict hygiene standards and keeping it free from contamination.
Misconception: Is my linen dedicated to my property?
Explanation: Linen rental companies manage the pool of stocks at various sizes and specifications. This ensures that the service provider can provide the right quality of linen in sufficient quantity with whiteness, freshness, and complete hygiene. With this model, the mindset of ‘my linen’ is becoming less relevant, as the housekeeping team can focus on providing high-quality services to guests and patients without worrying about managing linen inventory.
Washing procedures: Hoteliers would want to know about the washing procedures we follow, the type of chemicals we use, and whether we comply with local environmental regulations. In addition, many would ask whether the washing is done in a commercial laundry or an in-house laundry in a hotel. The laundry equipment, particularly the washers and ironers, are the critical pieces of the laundry process, which decides the quality of the process.
Turnaround time: Hoteliers are usually more concerned about the turnaround time for laundry, particularly during peak season. We explain our capacity to handle large volumes of laundry and our ability to provide quick turnaround times. This is the reason why we work with multiple laundries to mitigate risks and avoid a single point of failure.
Logistics: The most critical service in the linen rental model is managing the logistics of moving soiled linen from the hotels and bringing in fresh linen. We manage this through a fleet that is completely outsourced and tracked by a dedicated software tool to provide real-time information to the customers.
Pricing: Usually, the customer compares existing laundry costs with linen rental costs and tries to negotiate on this basis. We work closely with our customers to provide competitive pricing that meets their needs.
Rejects, rewash, missing linen: As a service provider, we deploy a dedicated person to oversee the laundry quality process. A simple tool that captures the quantity of linen usage on a daily basis is put into practice to take care of the reconciliation process.
Using hypothetical numbers, please explain how a facility can save on resources by outsourcing linen and laundry services.
Setting up an in-house laundry is Capex intensive, requiring real estate space, laundry equipment, spares for equipment and skilled resources for upkeep. Additionally, there is no proper steam consumption data to estimate costs, and chemical dispensing may be done manually or automatically. Furthermore, a huge inventory intake of linen is required.
For example, for a mid-sized hotel with 100 rooms, the cost of setting up an in-house laundry would be around ₹70-80 lakhs. Additionally, the running cost in maintaining an in-house laundry of this size is between ₹30-35 per kg of linen, resulting in a monthly cost of ₹7-8 lakhs for laundry washing costs at 7 kg/room/day (linen + uniforms). The laundry operator or owner must also spend on preventive/breakdown maintenance.
On the other hand, outsourcing linen rental and laundry services to a third-party company can result in an average rental cost of ₹130-150/room/day, which includes linen, laundry cost, logistics, and labour. Thus, the hotel can save ₹2-3 lakh per month on linen management costs. The actual data specific to the property can be collected to calculate net savings.
Outsourcing laundry services can free up manpower that can be redirected to other areas of the hotel’s operations. By assuming a conservative production man hour estimate of 4 hours/day/laundry employee, the hotel can save approximately 140 man-hours/week by outsourcing the linen and laundry to a third-party company.
Outsourcing laundry services can significantly reduce the hotel’s water and energy consumption. The per-unit cost of linen, laundry, and labour is less expensive when the third-party company processes a substantial volume every day. In our experience, we have seen improvements in the running costs to the tune of 28-30% in the overall linen management of a typical 100 room property of a 4-star.