Hotel and Motel Laundry Cost Factors

Details

Created on Saturday, 03 May 2003 02:27

Written by Rich Fitzmorris

Like many companies that are dependent on travelers, The hotel and motel industry has taken a hit. Owners and managers have had to review all areas of expenses and cost, including their linen service. In the case of properties that have on-premise laundries, the laundry department has had to look at saving money with variable costs.

What are the factors associated to the laundry? How can a manager improve on his or her operation? The percentages associated with laundry cost are important to know when trying to evaluate cost. All costs are important, but some are bigger than others. Here are some accepted ranges for laundry cost: Labor 35-55 percent, Linen Replacement 15-25 percent, Energy 10-15 percent, Chemicals 5-10 percent, Indirect 5-20 percent.

Labor:
Cost of wages and benefits to employees A manager should review procedures and training in order to optimize the output per employee, commonly referred to as pounds per operator hour. Knowing the productivity of employees, and what it should be for the type of laundry and equipment in use is critical to controlling labor cost.

Linen Replacement:
Cost of replacing linens to a pre-determined par-stock A manger should evaluate the quality and life of linens. This can include theft, normal wear, and intensity of wash formulas, rejects, and overall handling procedures by housekeeping personnel, as well as the laundry staff. Buying the right quality and controlling its use can be beneficial to reducing replacement cost.

Energy:
Cost of water, sewer, electricity, and gas A manager can evaluate equipment efficiency in wash formulas - full loads, proper temperatures, and cycle times - and see that all are balanced to deliver high quality with a low rewash percentage. Properly utilizing dryers with full loads, correct temperatures and times helps control finishing costs. This is a variable cost that is often overlooked, but is a real cost that should be analyzed closely.

Chemical:
Cost of all supplies used to clean linens A manager should review all options to take advantage of technology that can deliver the benefits of controlling cost in the above areas as well as the chemistry itself. The chemistry used can dramatically affect other variable cost, so close scrutiny is well advised.

Indirect:
Cost of maintenance, depreciation, equipment, and laundry floor space A manager may be able to help control maintenance by maximizing equipment efficiency and using preventive maintenance. Reducing total hours of operation can reduce cost associated with room and space by cutting lighting, heating, or air conditioning cost, etc.

Conclusion
By reviewing present conditions and evaluating the opportunities for improvement, a good manager can help the hotel/motel increase profits by wisely cutting cost that may have been overlooked.

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