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Just like other parts of the world, the hospitality sector in the UAE has also been affected by the ongoing global crisis. A drop in the number of visitors has been registered and new hotel projects have been reduced and delayed by 20 percent. Therehas been an overall delay of 40 percent inthe projects that were due to be completed by 2015 (report from Business 24/7) mainlydue to increased competition for resources (especially labour and construction materials), rising costs and tough financing due to the global credit crunch.
There are 61 confirmed hotel projects in the GCC which are due for completion by the end of 2010, despite the global economic downturn as per the survey done by The Hotel Show during March 2009. The UAE also contributes to this figure through 22 hotels which are due to open this year and another 13 by the end of next year (courtesy, Proleads). These new hotels will contribute to an increase in the total number of available rooms in Dubai by 55,000 and around 17,000 rooms in Abu Dhabi by the end of this year.
Laundry industry - current scenario
Presently the market is more driven by the price for laundering items with an equal importance on quality and services.Initially, three years ago, the laundries were completely driven by prices and the importance to the life of the linen and services were considerably less important. There are upcoming new laundry projects with a production capacity of approximately 50 tons per day in a span of two years with tunnel washers and state-of-the-art technology. The technological advancement in the laundry industry in the GCC market is developing at a slower state as compared to Europe and Americas, but the focus on these advancements is gradually increasing due to increasing labour costs (visa, accommodation, salaries etc) and better productivity with good quality products.
The new hotels which are coming up now have very small in-house laundries for
washing uniforms and guests garments, but the major portion of the laundry services are outsourced to commercial laundries for linen items. The old laundries which fail to modernize their operations according to the current market requirements and are not able to solve problems of risings costs are phased off while the concept of centralized laundry operations work in a much more planned manner. The current potential of the laundry business in the UAE is around 0.5 billion USD per year.
Laundry cost factorsFor any business, delivering good qualityproduct/services at a right cost (with a good profit), at the right time is the key for success. In the laundry industry, the product/price mix is very tricky and it has plenty of external factors.
The key cost factors in the laundry are
1. Utilities (Energy, Water [fresh/sewage], Power)
2. Labour
3. Chemicals
4. Miscellaneous (includes packing
material, spares, maintenance etc)
The approximate cost for processing one kilogram of textiles varies from AED 2.0 to AED 4/kg based on the ratio of cost factors as mentioned above. This figure varies according to each laundry depending on the location, type of business and allocation of costs etc.
In the above pie chart one can see that the highest cost is the utility cost which is 44 percent which includes the electricity water (Fresh and sewage), and diesel costs. The cost of fuel was very high last year; however this year it has come down to a value similar to that of 2006.The cost of the chemicals including drycleaning and washing will be around 5 to 7 percent compared to the overall cost.
Future of laundry industry
The work conditions and competitive situation for laundries have changed dramatically in recent years. Industries with high water and energy consumption like the laundry industry are particularly suffering from recent changes in the economy. Previously, the focus was on the disproportionate increase in water costs but in recent years the spiraling cost of energy has become a significant problem for laundries. Global warming is increasing through the combustion of fossil fuels. The Middle East has committed to reducing CO2 emissions within the scope of the Kyoto Protocol. In the future, this obligation will become relevant to the laundry industry as well. This will also involve the laundries and force them to use energy more efficiently than it is being used today.
Ecolab’s solution
The PERformance system consists of 3 modules starting with BASIS which forms the foundation for PLUS and ULTIMATE. Ecolab has developed an optimum overall concept for your laundry which generates the best possible performance for your business with the highest savings possible.
The basis of the PERformance concept is the innovative laundry process with the unique bleaching and disinfection product Ozonit® PERformance. PERformance Basis, the combination of low temperature and highly concentrated products reduces the total costs of the laundry process significantly and achieves an excellent result for laundered items.
The innovative laundry process and the use of the highly concentrated bleaching and disinfection product Ozonit® PERformance achieve the best results with the lowest usage of resources and ensure the hygienic level of the washing process. The use of Ozonit® PERformance in the main wash achieves excellent bleaching results and reliable disinfection. The disinfection washing processes are active even at lower temperatures starting at 60° C and a short active time of 10 minutes. The production capacity of the machine is seen to increase as well.
