Despite high costs, in-house laundries offer advantages

Some people don’t care who handles their dirty laundry. This is true for most of the hotel industry, with many hotel operators opting to outsource their laundry so they can focus on their core competencies, such as service. Then there is Rosen Hotels & Resorts.

Businessman, investor and philanthropist Harris Rosen founded his Orlando-based hotel company in 1974, but he didn’t open his first resort until 2006 with the Rosen Shingle Creek. Also located in Orlando, this property has operated an onsite laundry facility since its inception. When it came time to decide whether or not to take laundry operations off-site or expand, Rosen began construction on a 34,584-square-foot laundry building, which it hopes to open late summer 2019, to replace the resort's existing facility.

Glenn Rosen, project manager and owner’s representative at Rosen Hotels & Resorts, said the company began designing the new laundry facility approximately two years ago. The project, he said, was prompted by a multiphase, long-term plan to expand the hotel, but it came at a crucial time because the hotel’s existing laundry facilities already were operating at maximum capacity.

“Since there is already critical mass (of pounds of laundry), coupled with technological advancements [made] since Rosen Shingle Creek’s current laundry facility opened a little over a decade ago, we can use large and particularly efficient laundry equipment that enables us to wash more pounds of laundry using less water,” Rosen said. “That’s a win for everyone.”

From left: Bill Bell, VP of sales for commercial laundry service company Steiner-Atlantic; Rafael Feliu, laundry manager at Rosen Hotels & Resorts; Nick Fertig, director of laundry at Rosen Hotels; Harris Rosen, president and CEO of Rosen Hotels; Frank Santos, VP and CFO at Rosen Hotels; Fernando Ching, resident manager at the Rosen Shingle Creek; Jim Bina, director of finance at Rosen Hotels; Glenn Rosen, project manager and owner’s representative at Rosen Hotels; and Jason Koelker, site manager at Welbro Building Corporation. Photo credit: Rosen Hotels & Resorts

When Rosen speaks of new technology, he is referring to continuous batch washers, also known as tunnel washers, which are industrial washing machines designed to clean massive loads of laundry. Two of these machines soon will be on their way to Rosen Shingle Creek. Additionally, the facility will install a fully automated, ceiling-mounted bag rail system to deliver laundry throughout the building.

Seth Willer, national sales manager at Continental Girbau, a subsidiary of Vic, Spain-based laundry equipment manufacturer Girbau Global Laundry Solutions, said hotels and other businesses are investing in more internal laundry facilities as the cost of new equipment gradually falls over time. 

“Technology makes laundry operations more productive and efficient. But when truly new technology is first released into the market, it’s often expensive and perhaps its [return on investment] doesn’t justify the expense,” Willer said. “As technology develops, it becomes more affordable. When technology costs decrease and labor costs rise, it becomes easier to justify laundry technology purchases with quicker ROI.”

With so many third-party laundry operators in business these days, why keep laundry operations in-house? Nick Fertig, director of laundry at Rosen Hotels, said by keeping other hands away from Rosen Shingle Creek’s hamper the property was able to avoid entering another multiyear agreement with an additional third party. The resort also will be able to operate with fewer overall linens (referred to as PAR, or periodic automatic replenishment, levels) and establish a standard of cleanliness across the property that would be unattainable using outside services, among other benefits.

“A properly managed and efficient laundry allows you to produce consistently higher-quality goods at an overall cost that is well below the prevailing market rate,” Fertig said. “This is strikingly apparent in convention-based properties, where the specialty banquet linens can be processed within an [on-premises laundry] at figures sometimes one-tenth the cost of external rates.”

Industrial laundry operations often make use of both continuous batch washers and flatwork ironing machines, each of which are designed to churn through extensive loads of laundry. Photo credit: Rosen Hotels & Resorts

Operating Squeaky Clean

Operating an on-site laundry facility requires more effort than simply remembering to switch loads between washers and dryers at the appropriate time. For this reason, among others, hoteliers often hire third parties to keep their linen clean. Should operators decide to bring their wash in house to save on costs and create efficiencies, however, there are a few factors to keep in mind.

Because laundry operations are far removed from the standard processes of a hotel, Fertig said it is imperative to hire and maintain a complete team of employees who are honed in on the laundry business. This means line-level workers as well as leaders and executives.

“The machines utilized within the laundry are complex and unique. Assembling a team who has a firsthand knowledge and experience in the managing and maintenance of a laundry facility is crucial to its success,” said Fertig.

Willer echoed Fertig’s sentiment. He considers the industry’s shrinking labor pool to be the greatest challenge facing hotel laundry operations, and he also recommends maintaining strong relationships with qualified laundry maintenance technicians to keep the suds flowing.

In-house laundry operations allow hotels to operate using lower PAR levels than operators who outsource. Photo credit: Rosen Hotels & Resorts

Rosen recommended any hotel that is planning to take laundry operations in-house to take its time and consider everything before moving forward because these hotels essentially are creating a second business within their overall business. This, of course, comes with a laundry list of difficulties.

“The drawbacks of an on-property hotel laundry facility include significant upfront capital expense, potential permitting challenges, significant perpetual operating costs and inherently some attention away from the core business of filling hotel rooms,” said Rosen.

Despite this, Rosen also said the benefits of installing an on-site laundry facility include optimized laundry efficiency with regard to cost, time, quality control and energy (including mitigating transportation and overall environmental impact). If an operator crunches the numbers and decides to move forward with an expansion, Rosen said they should brace themselves for a rocky start.

“Be prepared for a lengthy design and permitting process (depending on the size of the facility), significant capital expense, difficult technical challenges, an endlessly fluctuating demand (in accordance with hotel occupancy, type of guests/events, etc.) and dealing with a fussy client (yourself),” Rosen said.