SAVANNAH, Ga. — When David Bernstein, president of laundry equipment manufacturer Lapauw USA, looks into the future of the industry, he sees many changes on the horizon.
And he should know. After around three decades that includes experience in consulting, design, renovation, process improvement and operations, Bernstein can see the big picture of laundry and linen.
“We live in a time where we have all these generational changes that are affecting our businesses, our employees and our customers,” he says. “We live in a time of burgeoning technology. We live in a time where we want a lot more, but we want to pay a lot less. As a result, we really need to look at the future and figure out what is going to happen and how we can be prepared for it.”
Bernstein covered changes in the industry overall, as well as in healthcare and hospitality laundry, during the opening general session of the Association for Linen Management’s (ALM) IMPACT 2018 conference titled Looking in the Future of the Healthcare and Hospitality Markets.
As Bernstein puts it, “Let’s get in our time machine, let’s cast our minds forward, and let’s think about what’s going to be happening in the future of the laundry industry.”
HEALTHCARE & HOSPITALITY
Many of the trends affecting the laundry industry overall are impacting both healthcare and hospitality laundry, Bernstein says. And each market has a few unique challenges.
First, he shares that in healthcare, there is consolidation vertically and horizontally.
“There are fewer and fewer organizations to whom you may sell,” Bernstein points out. “Larger providers are taking over smaller ones. They’re expanding services, more cradle to grave. There is more and more consolidation throughout healthcare industry.
“And because they’ve gotten larger and larger, they say they have so much more volume, the price should be lower and lower.”
That leads Bernstein to cost-containment efforts going on in healthcare systems. He says it used to be that people would go to the hospital and be charged for everything. Today, insurance companies don’t want to pay for procedures; they want to pay for outcome.
“It’s a balancing act,” he says. “More or less tests, better tests. Providers looking for more ways to diversify income. Fewer hospitals, more of what I call ‘doc in a box,’ community care centers, urgent care, community hospitals, surgery centers. Things that used to be a stay in hospital are now go in and have the procedure then go home. There’s a greater use of technology for less hospital time.”
How does this impact laundry? Bernstein points out that the more healthcare diversifies, the more it moves toward outpatient care and less in-patient care. That means fewer sheets, fewer towels, fewer gowns and fewer scrubs—less laundry to process.
“Things are changing,” he says. “On average, about 72% of purchases hospitals make are through GPOs (group purchasing organizations). When these systems consolidate, work together, join GPOs and come to you, they’re saying, ‘There are more of us, a greater volume; we want a lower price.’ What are laundries going to do in response? Smaller laundries say since we’re not part of a large conglomerate, let’s get together and make some sort of a nationwide network.”
Bernstein points out that the use of technology, more artificial intelligence, has had a positive impact for the laundry industry.
“It used to be a doctor would estimate time for a surgery, but if didn’t take that long, the OR sat idle,” he shares. “Now, AI bots have looked at thousands of surgeries to come up with a better way to schedule surgeries, so ORs are in constant use. That means more linens for us.”
The last point Bernstein makes about healthcare laundry is the need to improve public perception. He says the news makes links between laundry and hospital-acquired infections (HAI), even when these incidents haven’t been the fault of a laundry.
“What we need to do is to go out and convince the public that what happened isn’t the fault on the industry; it’s an unfair view of the industry,” he says. “We need to think about what the perception of the public is. Where is there going to be a link made next in the minds of the public?”
Regarding the hospitality industry, Bernstein shares that economic trends show travel is up and people are eating out more. Leisure travel spending is also up, with strong growth in 2017 and expectations of stronger growth in 2018.
“Planes are full,” he points out. “You go to make a reservation at a hotel and it’s sold out. You go to a restaurant and you have to wait. The hospitality industry is booming. Is it helping the linen industry? That’s the question.”
As with healthcare, there is a lot of consolidation, mergers of major hotel chains, in the hospitality industry, says Bernstein.
“When the hotels join, they become part of purchasing organizations,” he says. “If you aren’t accepted and certified by the organization, forget about selling laundry service to the member hotels. These mergers are absolutely having an effect on those laundries that provide hospitality linen service.”
Travel preferences are changing, too, Bernstein says. The trend is to demand “experiences.” Travelers also want authenticity, personalization on demand. It all stems from the millennial generation, which is so used to using apps for everything, which is leading to nontraditional laundry.
“Now, if you go to the hotel and you need something, you don’t pick up the phone for more towels, I’d rather use an app,” Bernstein says. “Another example of nontraditional laundry: I’m going on vacation with my wife. Half of those nights will be spent in a hotel and half in an Airbnb. Who’s doing their laundry? When those guests leave, the owner is taking those linens and doing them themselves.”
In both restaurants and hotels, the concept of the “linen-less table” impacts laundry, he shares. With this model, restaurants don’t use tablecloths, carpeting, expensive table service, etc. This provides the restaurant a quicker turnaround to serve more diners, but they also spend less money on laundry service.
Bernstein also says there is a new room-service model coming to hotels. Orders are pre-made and pre-packed in little bags dropped off at the room with plastic containers and silverware. No table or linens are used.
Hotel green programs also affect laundries, he says. The programs offer the perception that laundry uses too much water. Hotels want to reduce usage and costs, reliance on laundries. Laundries have to counter the perception with the reality of how sustainable their services really are.
“What’s the conclusion? It’s kind of scary,” Bernstein says. “There are a lot of changes coming—generational changes, technological changes, economic business changes that are happening.
“There’s a lot going on in the laundry industry in general and in healthcare and hospitality. You need to be thinking about it, and you need to be aware of it so you can react to it.”
Miss Part 1 about overall changes? Click here to read it.