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7. Requirements, opportuni.es and risks on the
The HORECA market in Europe Developments and opportunities for textile services Foto: Beirholm Vaeverier Dr Geert Böttger Expo+Consulting Associates August 2012 This study was commissioned by: L`Associazione del Sistema Industriale Integrato di beni e Servizi Tessili e Medici Affini Danish Tex>le Service Associa>on Federa>e Tex>elbeheer Nederland Fédéra>on Belge de L`Entre>en du Tex>le Industrieverband Tex>lservice – intex e.V. WirtschaHskammer Österreich Verband Tex>lpflege Schweiz 2 Contents Contents Charts by chapter 1. Summary 2. Tex9le services in the HORECA market in 2011 3. Business model for tex9le services and force field of the market 4. Development of HORECA markets in Europe 4.1 Hotels and other accommoda>on businesses 4.1.1 Development of service capaci>es 4.1.2 Dynamics of demand 4.1.3 Trends that determine the future of the hospitality business 4.2 Restaurants 4.3 Catering 5. Tex9le services as service providers 5.1 The compe>>on between distribu>on channels 5.2 The advantages of the tex>le services business model 6. Developments in purchasing 6.1 General trends 6.2 Sustainability 7. Requirements, chances and risks on the product level 3 Contents 7.1 Bedding 7.2 Bathroom tex>les 7.3 Table linen 7.4 Work a[re for chefs 7.5 Work a[re for waitrons 7.6 Washroom services 7.7 Mats 8. Opportuni9es and risks in product design 8.1 Labour costs and produc>vity 8.2 Saving energy and water 8.3 Logis>cs: RFID for flatwork 8.4 Marke>ng and sales 9. New fields of business and service models 9.1 Comprehensive tex>le management 9.2 Service diversifica>on for the HORECA segment 9.3 New contract models 10. Market development scenarios 11. Typical business strategies 12. Sector-‐poli9cal conclusions 13. Selected countries 4 Contents 13.1 Belgium 13.2 Denmark 13.3 Germany 13.4 Italy 13.5 The Netherlands 13.6 Austria 13.7 Switzerland Sources 5 Charts by chapter 1. Summary Chart 1-‐1 HORECA turnover in Europe Chart 1-‐2 Development of accommoda>on capaci>es Chart 1-‐3 Tex>le management with RFID Chart 1-‐4 Target groups and preferences Chart 1-‐5 Tex>le services turnover growth un>l 2015 Chart 1-‐6 Comparison of key performance Indicators 2. Tex9le services in the HORECA market in 2011 Chart 2–1 Client and product areas Chart 2–2 Turnover development HORECA clients Chart 2–3 Share of HORECA clients in tex>le services‘ turnover Chart 2–4 HORECA turnover in selected countries 3. The tex9le services business model and market forces Chart 3-‐1 Strategic advantages of outsourcing and efficiency gains Chart 3-‐2 Basic structure of tex>le services Chart 3-‐3 The five essen>al market forces Chart 3-‐4 Driving forces in the HORECA tex>le services market Chart 3-‐5 Summary of dynamic factors of the HORECA market 4. Development of supply capaci9es 4.1. Hotels and other accommoda>on businesses Chart 4.1.1-‐1 Number of accommoda>on businesses EU 27 Chart 4.1.1-‐2 Beds available EU 27 Chart 4.1.1-‐3 Supply capacity 2010 by country 6 List of charts Chart 4.1.1-‐4 Number of accommoda>on businesses Chart 4.1.1-‐5 Development of accommoda>on businesses Chart 4.1.1-‐6 Share of hotels in the number of accommoda>on businesses Chart 4.1.1-‐7 Percentage of hotel arrivals Chart 4.1.1-‐8 Development of number of hotel businesses Chart 4.1.1-‐9 Hotel beds in selected countries in 2010 Chart 4.1.1-‐10 Development of number of hotel beds Chart 4.1.1-‐11 Average size of hotels in selected countries in 2010 Chart 4.1.1-‐12 Employees in the accommoda>on business Chart 4.1.1-‐13 Employees in selected countries Chart 4.1.1-‐14 Development in selected countries 4.1.2 Dynamics of demand Chart 4.1.2-‐1 Selected countries’ share of arrivals Chart 4.1.2-‐2 Selected countries’ arrivals in 2010 Chart 4.1.2-‐3 Growth of arrivals Chart 4.1.2-‐4 Growth rates Gross Domes>c Product Chart 4.1.2-‐5 Dynamics of leisure travel Chart 4.1.2-‐6 Dynamics of business travel Chart 4.1.2-‐7 Arrivals in the EU Chart 4.1.2-‐8 Foreign arrivals in selected countries Chart 4.1.2-‐9 Dura>on of stay Chart 4.1.2-‐10 Comparison of des>na>ons 7 List of charts 4.1.3 Trends that determine the future of the hospitality business Chart 4.1.3-‐1 Demand trends Chart 4.1.3-‐2 Rising middleclass in BRIC countries Chart 4.1.3-‐3 Websites for travel planning Chart 4.1.3-‐4 Supply trends Chart 4.1.3-‐5 The largest hotel companies in the EU Chart 4.1.3-‐6 Growth by hotel category Chart 4.1.3-‐7 Technical horizons for guest services Chart 4.1.3-‐8 Self-‐service and hybrid events 4.2 Restaurants Chart 4.2-‐1 Restaurants EU27 in 2009 Chart 4.2-‐2 Restaurant staff EU27 Chart 4.2-‐3 Turnover development for restaurants and GDP Chart 4.2-‐4 Staff per restaurant Chart 4.2-‐5 Turnover/ restaurant Chart 4.2-‐6 Turnover/ staff Chart 4.2-‐7 The use of smilies for transparency of hygiene in Denmark 4.3 Catering Chart 4.3-‐1 Distribu>on of caterers in the EU27 Chart 4.3-‐2 Catering staff by country Chart 4.3-‐3 Staff per catering business Chart 4.3-‐4 Turnover per employee in selected countries Chart 4.3-‐5 Turnovers of the top 40 caterers by business segment Chart 4.3-‐6 Turnover comparison 2008 and 2009 8 List of charts Chart 4.3-‐7 Tex>le use in the catering segments 5. Tex9le services as a service industry 5.1 The compe>>on between distribu>on channels Chart 5.1-‐1 Market posi>on of tex>le services 5.2 The advantages of the tex>le services business model Chart 5.2-‐1 Results of survey on the advantages of tex>le services Chart 5.2-‐2 Advantages in laundry management Chart 5.2-‐3 Advantages in tex>le management Chart 5.2-‐4 Advantages in business management 6. Developments in purchasing Chart 6.2-‐1 Outline of ecological standards Chart 6.2-‐2 Comparison of ecological standards regarding coion Chart 6.2-‐3 UN Global Compact 7. Requirements, chances and risks on the product level 7.1. Bedding Chart 7.1-‐1 Significance of the bed for guests Chart 7.1-‐2 Importance of bedding Chart 7.1-‐3 Guests‘ expecta>ons with regard to bedding Chart 7.1-‐4 Digression: An>allergenic mairess protec>on Chart 7.1-‐5a Demands in respect of bed linen Chart 7.1-‐5b Demands in respect of bed linen Chart 7.1-‐5c Demands in respect of bed linen Chart 7.1-‐6 Growth in bedding by product 9 List of charts 7.2. Bathroom tex>les Chart 7.2-‐1 Guests‘ expecta>ons in respect of bathroom tex>les Chart 7.2-‐2a Demands in respect of towelling goods Chart 7.2-‐2b Demands in respect of towelling goods Chart 7.2-‐3 Development of demand in respect of bathroom tex>les 7.3. Table linen Chart 7.3-‐1 Demands in respect of table linen Chart 7.3-‐2a Demands in respect of table linen Chart 7.3-‐2b Demands in respect of table linen Chart 7.3-‐3 Development of demand in respect of table linen 7.4 Work a[re in the kitchen Chart 7.4-‐1 Outline of the HACCP concept Chart 7.4-‐2 The 7 building blocks of the RABC concept Chart 7.4-‐3 Pictograms for industrial cleaning of work a[re Chart 7.4-‐4 Development of demand in respect of work a[re in the kitchen 7.5 Work a[re for waitrons Chart 7.5-‐1 Development of demand in respect of work a[re for waitrons 7.6 Washroom services Chart 7.6-‐1 Washroom barometer 2011 Chart 7.6-‐2 Comparison of hand drying systems Chart 7.6-‐3 The Washroom Informa>on Service 7.7 Mats Chart 7.7-‐1 Model: posi>ons of mats in hotels Chart 7.7-‐2 Maximising the mat market 10 List of charts Chart 7.7-‐3 Differences in mat construc>on Chart 7.7-‐4 Development of demand for HORECA mat services 8. Chances and risks of produc9on design Chart 8-‐1 Increasing laundry costs Chart 8-‐2 Cost structure tex>le services 8.1 Labour costs and increasing produc>vity Chart 8.1-‐1 Pick-‐up system Chart 8.1-‐2 Real-‐>me informa>on for the laundry management 8.2. Saving energy, water and chemicals Chart 8.2-‐1 The basics of water and energy conserva>on 8.3. Logis>cs: RFID in flatwork Chart 8.3-‐1 Structure of the RFID system Chart 8.3-‐2 Comparison of barcode and RFID 8.4 Marke>ng and sales Chart 8.4-‐1 Internet development Chart 8.4-‐2 Search engines as nodes Chart 8.4-‐3 Diverse forms of expression in the internet Chart 8.4-‐4 Scope of du>es of the sales representa>ves 9. New areas of opera9on and service models 9.1. Comprehensive tex>le management Chart 9.1-‐1 ROI model for RFID Chart 9.1-‐2 ROI model2 for RFID 11 List of charts 9.2. Diversifica>on of services for the HORECA segment Chart 9.2-‐1 Diversified services at Rentokill Ini>al Chart 9-‐2-‐2 Basic principles of diversifica>on Chart 9-‐2-‐3 Medium-‐sized enterprises with diverse range 10. Scenarios of market development Chart10-‐1 Economic growth by country Chart 10-‐2 Comparison of growth rates of tex>le services Chart 10-‐3 Comparison of GDP growth rates Chart 10-‐4 Tex>le services turnover growth un>l 2015 11. Typical business strategies Chart 11-‐1 Strategic business segments Chart 11-‐2 Differing perspec>ves of the business segments Chart 11-‐3 Defining the posi>on for SHL [sports, health, leisure] Chart 11-‐4 Norm strategies for SHL Chart 11-‐5 Profitability of business segments Chart 11-‐6 Compe>>ve orienta>on 12. Sector-‐poli9cal conclusions 13. Selected countries Chart 13-‐1 Comparison of Key Performance Indicators 13.1 Belgium Chart 13.1-‐1 Growth of large Belgian laundries Chart 13.1-‐2 Net sales margin of large Belgian laundries 12 List of charts Chart 13.1-‐3 Demand from the accomoda>on business Chart 13.1-‐4 Condi>ons for demand from hotels Chart 13.1-‐5 Comparison of growth rates 13.2 Denmark Chart 13.2-‐1 Structure of tex>le services Chart 13.2-‐2 Development in the accomoda>on business Chart 13.2-‐3 Development hotels Chart 13.2-‐4 Comparison of growth rates 13.3 Germany Chart 13.3-‐1 Turnover development HORECA Chart 13.3-‐2 Development in the accomoda>on business Chart 13.3-‐3 Development supply capaci>es Chart 13.3-‐4 Development hotels Chart 13.3-‐4 Comparison of growth rates 13.4. Italy Chart 13.4-‐1 Development in the accomoda>on business Chart 13.4-‐2 Development hotels Chart 13.4-‐3 Comparison of growth rates 13.5 The Netherlands Chart 13.5-‐1 Market poten>al Chart 13.5-‐2 Development of demand Chart 13.5-‐3 Development of supply Chart 13.5-‐4 Development hotels 13 List of charts Chart 13.5-‐5 Comparison of growth rates 13.6 Austria Chart 13.6-‐1 Development of demand Chart 13.6-‐2 Development in the accomoda>on business Chart 13.6-‐3 Development hotels Chart 13.6-‐4 Comparison of growth rates 13.7 Switzerland Chart 13.7-‐1 Development of demand Chart 13.7-‐2 Development hotels Chart 13.7-‐3 Comparison of growth rates 14 1. Summary 1. Turnover of tex>le services in the European HORECA market has seen con>nuous growth. If all sales in respect of clients in the hospitality business are taken into considera>on – i.e. including washroom services, mat services etc. – turnover in Europe rose from EUR 2.6 billion in 2005 to about EUR 3.2 billion in 2011. HORECA clients accounted for approx. 28 percent (Chart 1-‐1: HORECA turnover in Europe). 2. Hotel and other accommoda>on capaci>es have constantly been increasing. Hotels are par>cularly important for the tex>le services because, first of all they absorb by far the largest share of arrivals, and secondly, due to the structure of their processes and the tex>les they use, they are much more inclined to make use of tex>le services than other accommoda>on businesses are. The number of hotels has demonstrated less growth than is the case regarding other business types, but hotels have become no>ceably larger. 3. The hotel market is characterised by the forward thrust of hotel brands, especially among the budget hotels. This is an advantage for the tex>le services industry wherever the concept of budget hotels is centred on the culture of overnight stays (Chart 1-‐2: Development of accommoda>on capaci>es). 4. The decline in turnover in the gastronomy industry in 2009 has now been offset. In this segment too, chains and system catering are gaining in market shares. This is to the disadvantage of tex>les in table culture, but it boosts the need for corporate wear for the staff. 5. Future poten>al with good growth in demand are seen in three areas in par>cular: 1) the baby-‐boomers who are entering a phase in their lives where they earn very well and have more >me to travel, 2) tourism from emerging countries where a new middle class that likes to travel is emerging, e.g. in some of the Asian countries, 3) business travel. The development of holiday travel is likely to remain stable with con>nued slight growth. 6. Preferences of travellers are changing. The emphasis is increasingly on health and sports, eco-‐social values, hygiene, internet affinity and an even keener cost-‐benefit awareness (value for money) (Chart 1-‐3: Future poten>al of new preferences). 15 1. Summary 7. The HORECA markets are characterised by very intense compe>>on. Capacity u>lisa>on in the hospitality business is between 30 and 45 percent in the countries selected for this study. Especially the large markets, Italy and Germany, are complaining about low u>lisa>on figures. The problem does not only lie in structural excess capaci>es. Hospitality businesses and gastronomy rather need to keep their products up-‐to-‐date and compe>>vely viable, so that new concepts in hotels and restaurants enter the market all the >me to regenerate and intensify compe>>on. 8. In this environment, tex>le services have to make provision for two things: a) Hospitality businesses need to be offered tex>les that are strategically and opera>onally suitable for them. b) Tex>le services need to contribute to improved control and management of costs. 9. We are seeing a shiH of emphasis from laundry services to the type of service that focuses even more on the expecta>ons of guests and the targets of HORECA clients. Core topics of tex>le management for HORECA clients are the selec>on of the most suitable product for the client, logis>cs and cost control for the client. Laundry services could be purchased elsewhere. Individual tracking of flatwork plays a major role in this issue (Chart 1-‐3: Tex>le management with RFID). 10. As for the product level, shiHs in preferences shown by hotel guests and patrons of restaurants mainly point in three direc>ons: more age-‐appropriate convenience, beier and more clearly documented hygiene and more emphasis on eco-‐social values. Tex>le services are in a par>cularly good posi>on to deliver with regard to increasing demands on hygiene and growing eco-‐social preferences (Chart 1-‐4: Target groups and preferences). 11. In many countries the catering market is not very prominent and is not yet sta>s>cally documented. The largest segments are in the health & care market, i.e. staff canteens and schools/universi>es. Tex>les are required, however, mostly for event catering, which accounts for only a small part of the catering market. The business model is based on taking care of the client‘s food requirements, unless that is the core business. 16 1. Summary Growth rates are very good because the business model is s>ll a long way from market satura>on. Event catering, which is par>cularly interes>ng for tex>le services, depends heavily on the prevailing economic climate. 12. Clients are highly cost-‐oriented when they respond to new demands by guests. This means that tex>le services constantly have to strive for a good margin through proceeds. Even more so, since there are more than enough laundry capaci>es on the market. At the same >me, cost items are rising. Therefore the key to compe>>veness, apart from structuring new services as in Number 9, is to increase produc>vity and reduce water and energy consump>on. Regarding the HORECA market, which depends heavily on flatwork, there are many star>ng points, e.g. automa>on of procedures between the washing machine and the rotary iron, as well as numerous systems for saving water and energy . 13. The HORECA market is the most vola>le of the large tex>le services markets, because in the short term it is dependent on the economic situa>on. Business travel in par>cular is affected by economic cycles. The basic perspec>ves of tourism, however, are geared towards posi>ve growth, since economic development is also seen posi>vely in the medium term. Growth rates of tex>le services in the HORECA market structurally exceeded GDP growth rates. We therefore expect that tex>le services in the HORECA market in Europe will grow between 2% and 4% by 2015 (Chart 1-‐5: Turnover growth of tex>le services un>l 2015). 14. Flatwork will grow more vigorously within this range than is likely in kitchen work wear and waitrons’ uniforms. The reason for this is the increase in labour produc>vity within the hospitality business, which is necessary for keeping labour costs under control. As a result, employment will grow less than total turnover. 15. Even though GDP growth is the central variable for the growth of HORECA markets and represents the demand for related tex>les, the business model of tex>le services can be further strengthened by working through associa>ons. In this respect we see important fields of ac>on in the following areas: -‐ Coopera>on with associa>ons of the hospitality business and ini>a>on of projects with companies 17 1. Summary Campaigning for the significance of hygiene in the hospitality industry, possibly expanding beyond current services - Advoca>ng sustainability in the hospitality industry - Ini>a>ng basic research on the “Internet related things” and how tex>le services can u>lise this in the hospitality industry - Boos>ng an interna>onal exchange of experiences between tex>le services that specialise in the hospitality industry. 15. This study has also looked at tex>le services for the HORECA markets in selected countries. In terms of quan>ty only, Italy and Germany stand out with a turnover of EUR 850 million and EUR 626 million respec>vely achieved by tex>le services in the HORECA market. If this turnover is categorised according to arrivals, the result ranges from EUR 3,33 in the Netherlands to 10,65 Euro in Italy (see Chart 1-‐6: Comparison of KPIs). The figures reveal very different market condi>ons in the respec>ve countries. The perspec>ve of the various countries was taken into considera>on throughout the analysis of the HORECA markets. In brief country analyses, the results were summed specifically up again. 16. From a methodical point of view, the study was compiled in such a way that at the end of each chapter, the essen>al statements are summed up ‘visually’ with a chart or corroborated with figures. The study was based on official sta>s>cs, the sta>s>cs of organisa>ons and numerous discussions within the sector and with suppliers. In order to ensure sta>s>cal comparability for Europe and between the selected countries – Belgium, Denmark, Germany, Italy, the Netherlands, Austria and Switzerland – to the best possible extent, we mainly used Eurostat as a source. Eurostat data used in this study was last updated at the beginning of July 2012. Regarding some key performance indicators and quan>ta>ve data, we do not claim to be sta>s>cally representa>ve. This should be seen as a model, as reconstruc>ng reality in order to illustrate context. Genera>ng sta>s>cally representa>ve key performance indicators would in many cases have gone beyond the scope and the budget of this study. 17. The support of par>cipa>ng organisa>ons and many of the sector‘s personali>es is much appreciated – thank you! 18 - 1. Summary Chart 1-‐1 HORECA turnover in Europe Turnover of tex9le services in the European HORECA market shows con9nuous growth HORECA clients account for about 28% in 2011 Share of HORECA clients Turnover of textile services with HORECA clients in Million Euros 2011, in % 3200 28 HORECA 3000 2800 Other c lient groups 2600 72 2400 2200 2011* 2009 2007 2005 Basis: ETSA, Interviews, own es>ma>ons 19 1. Summary Chart 1 -‐ 2 Development of accommoda>on capaci>es Hotel and accommoda9on capaci9es are demonstra9ng steady growth Hotels are becoming larger Largest growth rates are seen in the supply of economy accommoda>on Hotel growth by number of stars Growth of accommodation capacities in % 2010 5.00% 4.50% Total 4.00% 3.50% Accommodation businesses EU 27 2.50% Beds EU 27 2.00% Hotels EU 27 + CH 1.50% Hotelbeds EU 27 + CH 1.00% 0.50% 3* 2* 0*/1* 0.00% -‐0.50% 4* Source: MKG 2012 3.00% 2006 2007 2008 2009 2010 0.00% 2.00% 4.00% 6.00% Source: Eurostat 20 1. Summary Chart 1 -‐ 3 Tex>le management with RFID Service poten9al: tex9le management is made possible with RFID Tex>le management controls the laundry business Tex9le management, hotels -‐ rolling, precise planning of needs for each par>cular day -‐ by floors or units -‐ alloca>on of losses -‐ life cycle management -‐ documenta>on of hygiene (HACCP) -‐ delivery to floors or units -‐ delivery and despatch control, hotel -‐ tex>les, accountability for exact number of items -‐ management of differing items - ….. Laundry management -‐ rolling capacity planning -‐ recording of items received -‐ process automa>on -‐ process controlling -‐ process documenta>on -‐ cost calcula>on -‐ accountability for exact number of items -‐ compila>on of orders -‐ delivery planning - …. 21 1. Summary Chart 10 -‐ 4 Target groups and preferences Future poten9al: good development of demand with shiYing preferences Risks: transport costs, income development Baby boomers 45 – 65 years …with more >me …with more money Preferences Culture Health Sports Security Eco-‐social values Hygiene Individuality Value for money BRIC tourism China, India …with more money …with strong increase in travel ac>vi>es Preferences Culture Vegetarianism Security Health Experience Internet connec>vity Hygiene Value for money Business travel Medium term …con>nues to grow …more transparent …calculated more >ghtly Preferences Business hubs Sports Security Eco-‐social values Internet connec>vity Hygiene Value for money 22 1. Summary Chart 1-‐5 Tex>le services turnover growth un>l 2015 Growth in the turnover of tex9le services is expected to con9nue in the HORECA market. Grow th r HORECA turnover growth un9l 2015 2 to ange fro 4% p m 3700 .a. 3600 3500 3400 3300 conservative version optimistic version 3200 3100 3000 2900 2011 2012 2013 2014 2015 Source: Own calcula>ons 23 1. Summary Chart 1-‐6 Comparison of key performance indicators Tourism and HORECA tex9le services are the most significant in Italy Country Tourism in % GDP TS/ overnight Growth Tourism Tex>le employees Arrivals TS Beds services (TS) TS/arrivals stays in un>l 2015 in % p.a. in % of total in millions millions in millions in € in € IT 3.9 4.5 79.79 4.70 850 10.65 2.25 1 to 3 DE 2.2 2.3 134.54 3,29 626 4.65 1.92 2 to 4 CH* 5.8 7.8 16.20 0.28 150 9.26 4.21 1 to 3 AT 4.1 4.5 29.23 0.96 120 4.10 1.22 2 to 4 NL 2.7 2.9 30.00 1.20 100 3.33 1.18 2 to 4 BE 2.4 2.6 12.99 0.37 75 5.77 2.48 2 to 4 DK 2.9 3.7 5.84 0.39 46 7.88 1.70 2 to 4 Source: World Economic Forum, interviews, own es>mates and calcula>ons;*CH: model, hotels only; TS=tex>le services 24 2. Tex9le services in the HORECA market in 2011 A feeling of being at home while travelling demands a rich layout of tex9les The ‘feel at home away from home’ claim used by many hotels, clearly illustrates why the HORECA market uses a variety of different tex>les in large numbers. Feeling at home is associated with living comfortably, and comfort is oHen associated with fresh bed linen, good towels and a beau>fully set table. Especially in the 5-‐star hotel segment, expecta>ons of home away from home are oHen even higher than the standard that guests are used to in their own homes. Guests expect clean, fresh linen that reflects the hotel’s style Tex>les are part of the hosts’ furnishing elements and therefore part of the design. They have to reflect the style of the hotel and provide a good opportunity to create an individual environment for the guest. It goes without saying that cleanliness and freshness are of the highest priority for any tex>les with which the guest comes into direct contact, and which are used during prepara>on of meals for the guest. Against this background, HORECA tex>les are elements of furnishing and design which need constant aien>on. The hospitality industry demands the broadest range of tex9le services available When comparing hotels, restaurants and catering companies it quickly becomes clear with regard to poten>al, that hotels are the strongest and with regard to the variety of products required, also the most complex client group in the HORECA market. The reason for this is that hotels also provide living space for guests, whereas restaurants mainly have to set tables (Chart 2–1: Client and product areas). Good housekeeping requires a high standard of tex9le care Housekeeping not only has to ensure that guests are shown into clean rooms equipped with fresh linen. 25 2. Tex9le services in the HORECA market in 2011 It also has to ensure that the tex>les are well cared for and that maintenance is done in an economical and sustainable manner. A high quality of tex>le care must therefore be maintained. The same applies to the tex>les used in the kitchen and the work a[re of waitrons. Compe9ng concepts for the procurement and care of linens Companies of the HORECA sector apply different solu>ons to the provision of linens, i.e. procurement and care. They range from procuring their linens themselves and caring for them in their own laundry facili>es, to outsourcing all procurement and care to a tex>le service business. Varia>ons of one or the other of these solu>ons are common (for more detail see Chapter 5.1: Compe>>on among distribu>on channels). A tex>le service is occasionally only used for some of the tex>les, e.g. white linen and towelling, while different arrangements are made for the work a[re. Turnover with HORECA clients exceeds usual limits HORECA is usually seen as a supplier of tex>le services for flatwork and work a[re in the accommoda>on business, gastronomy and catering. According to ETSA, this amounted to € 2.33 billion in 2009 and is es>mated to be € 2.5 billion in 2011. In a client-‐oriented approach, however, these figures should also include turnovers achieved with services rendered to HORECA clients with dirt trapping mats, towel rolls, washroom hygiene and other products. This client-‐oriented approach is useful when the client group is seen as a whole and its behaviour is to be the focus of contempla>on. Taking all turnovers of tex>le services into account, the total client-‐oriented volume of the HORECA market in Europe is es>mated at about € 3.2 billion in 2011, some € 650 to 700 million more than according to the limited service perspec>ve. 26 2. Tex9le services in the HORECA market in 2011 Visible increase in turnover with HORECA clients Annual growth rates for Europe have constantly exceeded 3% since 2005. Only in 2009, during the economic and financial crisis, did growth stagnate at 0%. Expec>ng a turnover of € 3.2 billion for 2011 means that the HORECA segment has grown by € 500 to 550 million since 2005, when total turnover was € 2.6 billion (see Chart 2-‐2: Turnover development HORECA clients). This is a growth of 19% in 5 years. Share of HORECA clients in tex9le services turnover in Europe at 28% Based on this, the share of HORECA clients in the total turnover of tex>le services was approximately 28% in 2011 (see Chart 1-‐3: Share of HORECA clients in tex>le services’ turnover) . There is a no>ceable fluctua>on from country to country. Industry and trade are significant client groups for tex>le services in Germany, and the HORECA share accounts for only 22%. In Italy, with its strong accommoda>on sector, the HORECA share is es>mated to be 36%. In some countries the HORECA segment is the second most important market, in others it is the third most important market. In any event, however, HORECA is one of the large core markets for tex>le services. Italy and Germany achieve by far the highest HORECA turnovers Among the countries par>cipa>ng in this study, Italy – with some 850 million Euros -‐ shows the largest turnover for tex>le services, followed by Germany with about 626 million Euros. The much smaller countries follow, with a strong orienta>on towards tourism: Switzerland and Austria are ahead of the Netherlands, Belgium and Denmark (Graph 2-‐4: HORECA turnovers of selected countries). 27 2. Tex9le services in the HORECA market in 2011 Chart 2–1 Client and product areas Out of all client groups of tex9le services, the hospitality business requires the widest range of products Hotels Restaurants Catering Kitchen linen x x x Table linen x x x Bed linen x Towelling x Casings x Mats x x Washrooms x x Work abre in the kitchen x x x Work abre for waitrons x x x Macress protec9on x 28 2. Tex9le services in the HORECA market in 2011 Chart 2–2 Turnover development HORECA clients Turnover development of HORECA clients in Europe has been posi9ve for years. Turnover rose by approx. € 550 million from 2005 to 2011. Turnover of textile services with HORECA clients in million Euros 3200 3100 3000 2900 2800 2700 2600 2500 2400 2300 2005 2007 2009 2011 Source: ETSA; interviews , es>mates 29 2. Tex9le services in the HORECA market in 2011 Chart 2–3 Share of HORECA clients in the turnover of tex>le services HORECA clients account for 28% of the turnover of tex9le services in Europe. Turnover share HORECA clients 2011 in % 28 HORECA Other client groups 72 Basis: Source: ETSA; ETSA; Interviews interviews , Schätzungen , es>mates 30 2. Tex9le services in the HORECA market in 2011 Chart 2–4 HORECA turnover in selected countries Italy and Germany show the highest turnover for tex9le services Textile services HORECA selected countries 2010 in million Euros IT DE CH AT NL BE DK 0 100 200 300 400 500 600 700 800 900 Source: associa>ons; interviews , es>mates 31 3. Business model for tex9le services and force field of the market The business model for tex9le services is based on outsourcing of tex9le procurement Tex>les are important for crea>ng a pleasant atmosphere and for determining the level of luxury in hotels, restaurants and the catering business. They involve produc>on processes that are oHen demanding in terms of logis>cs and maintenance, requiring know-‐how, staff, tex>le stocks and machinery. Many accommoda>on businesses, restaurants and caterers do not see tex>le procurement as part of their core business. They want to concentrate on their core competence and therefore purchase tex>le procurement from a service provider. Tex>le care is not regarded as an essen>al part of their own value chain, but as a suppor>ng process. As the core task becomes more complicated and HORECA companies, by necessity, become more and more flexible in the implementa>on of their business model, non-‐essen>al processes such as tex>le procurement are more likely to be outsourced. This typically results in a number of advantages in terms of strategy and efficiency, which are shown here at a glance (Chart 3-‐1: Strategic advantages of outsourcing and efficiency gains). The main principle of tex9le services In principle, tex>le services are based on offering tex>le procurement as a service to relieve clients of this task. The service consists of the whole package, from selec>ng and purchasing tex>les to supplying predetermined and laundered tex>les at the right >me, to the right place. The idea is to offer systema>c tex>le procurement to the client, a process that, on the one hand supports the core business in a suitable manner, and on the other hand, is the opera>onal responsibility of a tried and tested partner. 32 3. Business model for tex9le services and force field of the market This basic idea is implemented in different ways, and arrangements are subject to change. These days the opera>onal business of tex>le services is usually described as an extended care cycle (see Chart 3-‐2: Basic structure of tex>le services). We will see that this basic model needs to be expanded in the medium and long term, if tex>le services are to maintain and expand their posi>on in the HORECA market (see Chapter 9: New areas of opera>on and service models). Changes to the basic model result from developments in the various sectors, on the level of both the tex>le services and the HORECA markets. The driving forces of the sectors must be contemplated in order to systema>cally understand not only changes regarding the business model, but also the challenges and opportuni>es of tex>le services in the HORECA market in general. The five market forces affec9ng a sector The dynamics of a sector and its long-‐term development are, in essence, affected by: (1) demand, the requirements thereof and the poten>al to meet them (2) suppliers, their demands and the poten>al to meet them (3) barriers encountered by new compe>tors aiemp>ng to enter the market (4) the risk that products offered could be subs>tuted by other solu>ons (5) compe>>on within the sector (see Chart 3-‐3: Factors of sector dynamics) The above-‐men>oned forces of compe>>on are part and parcel of any company’s framework. The management has to deal with these facts, and within this framework, has to set up an individual organisa>on for the company and produc>on factors that hold their own on the market and against compe>>on, and which sa>sfy investors’ demands regarding profitability. 33 3. Business model for tex9le services and force field of the market Tex9le services as a secondary market, the hospitality business as the primary market Tex>le services provide services for hotels, restaurants and catering companies. The quan>ty and implementa>on of the requested services depend primarily on condi>ons and developments of the HORECA market. Against this background, tex>le services are a secondary market. For a deeper understanding of tex>le services in the hospitality business it is therefore not enough to look at the market dynamics of tex>le services only. Rather, the dynamics of the hotel, restaurant and catering markets must also be understood, in order to enable sustainable decisions. The hospitality business is the primary market in this case. (1) Sources of demand Developments on the hotel, restaurant and catering markets are the most important immediate driving force for tex>le services because they are what creates a demand for tex>le services. A precise understanding of the client markets also makes it possible to come up with ac>ve, innova>ve products that clients did not ask for previously. Development of the market, especially innova>on, largely depend on the ideas and concepts of service providers and suppliers who are totally familiar with their clients’ problems. (2) Suppliers Solu>ons and improvements offered by suppliers to assist a given tex>le service are also decisive. The focus will always tend to be on measures to increase produc>vity and on cost management. Innova>ons which result in completely new services are par>cularly important. In our opinion, the introduc>on of RFID technology for flatwork is an example of such innova>on. More oHen than not however, suppliers do not offer assistance, but rather confront their customers with cost increases or reduced supplies, e.g. u>lity companies or the banking sector. Then it is a ques>on of how the tex>le service’s management is able to deal with the situa>on. 34 3. Business model for tex9le services and force field of the market (3) Compe99on within the sector Compe>>on within the sector is one of the most important dynamic factors. Every company has to assert itself against its compe>>on and to do so by securing or developing a compe>>ve edge. Customer service, quality, reliability, the price-‐performance ra>o and innova>on are some of the essen>al success factors in the market. (4) New compe9tors and subs9tutes Compe>>veness is not only a maier of making a name for oneself within the sector, but also persis>ng against external compe>tors such as facility management and subs>tute products offered to the clients, e.g. paper towels for drying hands. The summaries included provide a general idea of the driving forces in the primary hotel, restaurant and catering market, and the secondary markt of tex>le services which is structured on top of that (Chart 3-‐4: Driving forces in the HORECA tex>le services market; Chart 3-‐5: Summary of dynamic factors of the HORECA market). An analysis follows in the next chapters of this study. 35 3. Business model for tex9le services and force field of the market Chart 3-‐1 Strategic advantages of outsourcing and efficiency gains Many companies see advantages in outsourcing Advantages have to be analysed with respect to the company Strategic advantages and efficiency gains through outsourcing Strategic advantages Efficiency gains Focus on core competence No maintenance costs Concentra9on of educa9on and training Economy of space Less capital commitment Economy in wages and salaries Op9mised scalability of procurement Balance sheet contrac9on Ability to respond faster Clearer accoun9ng 36 3. Business model for tex9le services and force field of the market Chart 3-‐2 Basic structure of tex>le services Tex9le services include the en9re provision of tex9les, from procurement to care: clean linens are delivered to the client at the s9pulated 9me, on a given date Advising-‐financing-‐procuring-‐furnishing Repair Replace Use Collect Deliver Sort Sort Wash Check Finish 37 3. Business model for tex9le services and force field of the market Chart 3-‐3 The five essen>al market forces Buyers and current compe9tors are the most important factors in mature industries Basis:Porter 1991 Primary market HORECA How the market forces are developing Sekundary market textile services HORECA How the market forces are developing 38 3. Business model for tex9le services and force field of the market Chart 3-‐4 Driving forces in the HORECA tex>le services market The dynamics of the tex9le services sector are the result of constant changes and new developments regarding the five essen9al market forces. Sector Demanding en99es Sector compe99on Suppliers TEXTILE Hotels etc. OPL Tex9le chains Facility management One-‐way products SERVICES Restaurants Staff Tex9le management Air drying Caterers Compe9tors: Machines New OPL Household linen regional Energy Carefree tex9les na>onal Water interna>onal Detergent New compe9tors Subs9tutes 39 3. Business model for tex9le services and force field of the market Chart 3-‐5 Summary of dynamic factors in the HORECA market In order to understand the demands of the HORECA market, the driving forces in the HORECA segments have to be understood Sector Demanding en99es Sector compe99on HOTELS Economic situa9on Budget hotels Tex9les Grey market Tourism Luxury hotels Tex9le care Business travel Branching out Staff Facility management etc. Holiday travel Preferences (structure) RESTAURANTS Economic situa9on Suppliers Subs9tutes Systems gastronomy Tex9les Delivery services Convenience stores Tourism Theme gastronomy Tex9le care Business travel Branching out Staff Holiday travel Preferences (structure) Economic situa9on New compe9tors Branching out Tex9les Events Specialisa9on Staff Ins9tu9ons Logis9cs Health & care sector Tex9le care CATERING 40 4. The development of the markets in Europe The European hospitality business on the whole has developed posi>vely. Accommoda>on capaci>es and gastronomy have grown steadily. Even though changes in the economic situa>on play an important role, the general basis is nevertheless an upward trend. Prosperity is the basis of tourism, with respect to both holiday and business travel. The next chapters illustrate the quan>ta>ve development of the three HORECA market segments -‐ i.e. the accommoda>on business, gastronomy and catering – and describe their development factors. Not only quan>ta>ve developments, but also changes in the preferences for products and services shown by guests and clients of the hospitality sector are important for the tex>le services. 41 4.1 Hotels and other accommoda9on businesses 4.1.1 Development of supply capaci>es The accommoda>on business in Europe has grown clearly during the past ten years. It shows that the world has become more mobile and more interconnected. Markets have opened up interna>onally and work is shared globally, resul>ng in more business travel. But habits in leisure travel have also changed. People travel more oHen than they used to and to more distant des>na>ons. Significant increase in number of accommoda9on businesses Increased travel has resulted in a largely con>nuous growth in the number of accommoda>on businesses (see Chart 4.1.1-‐1: Number of accommoda>on businesses EU 27). Within the EU, the number grew from 393,990 businesses in 2002 to 460,361 in 2010. This is an increase of 66,371 businesses or 17% in eight years. The figures include hotels, guesthouses and other types of businesses which offer tourist accommoda>on regularly and on a commercial basis. In this context, both holidaymakers and business travellers are regarded as tourists. Capacity of beds in Europe has grown by 15% in 8 years The rising number of businesses increased the number of EU 27 beds from 24.5 million in 2002 to more than 28 million in 2010. This is a growth rate of 15% in eight years (see Chart 4.1.1-‐2: Beds available EU 27). Distribu9on across Europe When analysing the distribu>on of tourist accommoda>on across Europe, it quickly becomes clear that the large EU countries – Germany, Italy, France, Great Britain and Spain -‐ dominate. In 2010, these countries accounted for 81% of the accommoda>on businesses and for 76% of available beds (Chart 4.1.1-‐3: Supply capacity 2010 by country). Structures however, in terms of hotels versus other types of accommoda>on businesses, their size and the concentra>on of availability differ considerably in the various countries. 42 4.1 Hotels and other accommoda9on businesses 4.1.1 Development of supply capaci>es Italy has the largest number of accommoda9on businesses In 2010, the largest number of accommoda>on businesses was registered in Italy. Italy had 150,315 businesses as opposed to Germany with only 53,532. As for the smaller countries, Austria with its rela>vely strong orienta>on towards tourism leads ahead of the Netherlands, Belgium and Denmark (see Chart 4.1.1-‐4: Number of accommoda>on businesses in selected countries). For Switzerland, only the number of hotels (5,477) is available. Italy also shows significant growth Italy not only has a much larger number of accommoda>on businesses than all the other countries under considera>on taken together, but according to Eurostat also shows the highest level of development dynamics. The number of accommoda>on businesses rose from 128,281 in 2001 to 150,315 in 2010. This is an increase of 17.2%. Furthermore, among the other countries under considera>on, only the Netherlands showed an increase in the number of accommoda>on businesses – from 6,509 in 2001 to 6,954 in 2010. By contrast, the number of businesses slightly dropped in all other countries. Germany showed the largest decrease, in rela>ve and absolute terms, from 55,881 to 53,532 – which is 4.2% (see Chart 4.1.1-‐5: Development of accommoda>on businesses). Growth across Europe is mostly due to Italy and a few other countries. Germany shows largest share of hotels With regard to business types, hotels are the largest segment in all the countries included in this study – except for Italy. At 67%, Germany has the largest share of hotels, followed by Austria with 66% (see Chart 4.1.1-‐6: Share of hotels in number of accommoda>on businesses). Interes>ngly, only 23% of accommoda>on businesses in Italy are classified as hotels. This is by far the lowest percentage among the countries under considera>on. 43 4.1 Hotels and other accommoda9on businesses 4.1.1 Development of supply capaci>es There is no standard defini9on for hotels The exact defini>on of a hotel varies in certain details. The European norm CEN/ISO 1851, introduced in 2003, defines a hotel as “a business with a recep>on, services and addi>onal facili>es, which provides accommoda>on and in most cases meals” (see Laesser 2009, p. 101). There is no further specifica>on as to whether a guest stays for 3 days or 3 months, and no minimum size or other characteris>cs of the business are men>oned. According to the Federal Office of Sta>s>cs in Switzerland a hotel has at least 5 rooms, whereas according to the German Hotel and Catering Associa>on a hotel has a minimum of 40 beds. Hotels dominate with arrivals There is another aspect which makes hotels the most important business type for tex>le services. The number of arrivals is highly significant for the “fresh linen at the right >me and place” service, because each new arrival means a fresh set of bed linen and towels. Hotel arrivals clearly dominate, most of all in Austria, where 85% of travellers stay in hotels. Denmark shows the lowest percentage with 61% of arrivals. In Germany, where the number of arrivals is the largest in absolute terms, the share of hotels is 81%. Italy, despite its small share of hotels within the accommoda>on business, recorded 80% of arrivals in 2010 as hotel arrivals (Chart 4.1.1-‐7: Percentage of hotel arrivals). Hotels are therefore by far the most interes>ng accommoda>on business type for tex>le services. Hotel development is not uniform In 2010, the largest number of hotels was found in Germany and Italy -‐ almost 36,000 and 34,000 respec>vely (Chart 4.1.1-‐8: Development of number of hotel businesses). 44 4.2 Hotels and other accommoda9on businesses 4.2.1 Development of supply capaci>es There are reverse developments behind these figures, however: whereas Germany showed a clear decrease by 2700 hotels (-‐ 6,9%) between 2001 and 2010, Italy had an increase of 500 units (1.7%). In the Netherlands the number of hotels rose by more than 300 (11%) to 3172, while Austria experienced a rather substan>al drop by 1832 (-‐12%) to 13,461. In the other countries the number of hotels remained rela>vely stable. In 2010 there were 5477 hotels in Switzerland, 2088 in Belgium and 482 in Denmark (see Chart 4.1.2-‐8: Development of number of hotel businesses). Based on hotel beds, Italy has the biggest poten9al for tex9le services In the same way that the number of hotels is an indica>on of the number of poten>al clients, the number of beds is the most important indicator for the level of poten>al demand for tex>le services. Italy also shows by far the greatest poten>al in this respect. In 2010 there were 2.25 million hotel beds in Italy, followed by Germany with 1.72 million beds. The other countries have far less than one million hotel beds: Austria 589,000, Switzerland 275,000, Belgium 128,000 and Denmark 81,000 (see Chart 4.2.1-‐9: Hotel beds 2010 in selected countries). General increase in number of hotel beds: the poten9al has increased In all countries under considera>on, the number of beds increased between 2001 and 2010. Italy again stands out with a growth by more than 362,000 beds (19.1%). Hotel capacity in Germany rose by 119,000 beds (7.4%) and in the Netherlands by 37,000 beds (21.5%). Denmark also showed a substan>al increase by 22.6% which is 15,000 beds in absolute terms. Switzerland and Belgium recorded a growth of 5.8 and 5.7% respec>vely (see table in Chart 4.2.1-‐10: Development of number of hotel beds in selected countries). 45 4.2 Hotels and other accommoda9on businesses 4.2.1 Development of supply capaci>es Average hotel size 2010 Over the years, hotels have become larger in all of the selected countries. In the German-‐speaking region, hotels have an average of 44 beds in Austria, 48 in Germany and 50 in Switzerland. In Belgium the average number of beds is 62, in the Netherlands 67 and in Italy 66. The hotel culture in Denmark is totally different: the average amounts to169 beds per hotel (see Chart 4.2.1-‐10: Development of number of hotel beds). The European accommoda9on business employs 2.1 to 2.5 million people Employment in the accommoda>on business is very much subject to seasonal change, especially in the case of typical summer holiday des>na>ons and winter sports resorts. Winter quarters are generally weaker than summer quarters. Employment always peaks in the 3rd quarter of the year, because it is the busiest holiday >me. Some 2.5 million people were employed during the months of July to September from 2008 to 2010. In this general survey, the seasonal low is the 1st quarter, with some 2 million people employed from January to March. Number of women exceeds men by between 500,000 and 600,000 The total number of female employees is defini>vely larger than that of men. Given the seasonal fluctua>ons, the number of female employees is about 500,000 more than men during the weak months and 600,000 more during the strong ones (see Chart 4.2.1-‐12: Employees in the accommoda>on business). 46 4.1 Hotels and other accommoda9on businesses 4.1.1 Development of supply capaci>es Germany has the largest number of employees When it comes to staff, Germany is in the lead among the selected countries with 350,000 to 450,000 employees, even though Italy has the largest number of accommoda>on businesses and beds. Employment in Germany has increased slightly, while there has been a slight drop in Italy. Depending on the season, 200,000 to 250,000 people are employed by Italian accommoda>on businesses. Employment has also dropped in Austria and Switzerland. In Denmark and the Netherlands the 2010/2011 level was about the same as prior to the economic crisis (see Chart 4.1.1-‐14: Development in selected countries). These figures reflect the fact that the recovery of the accommoda>on business has been more visible and more sustainable in countries like Germany than it has been in Italy, for example. Another aspect that needs to be remembered is that the share of small businesses run by families is much larger in Italy than it is in Germany. 47 4.1.1 Development of supply capaci9es Chart 4.1.1-‐1 Number of accommoda>on businesses EU 27 The number of accommoda9on businesses in Europe rose to more than 460,000 units Number of accommodation businesses EU 27 480 000 460 000 440 000 420 000 400 000 380 000 360 000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Eurostat 48 4.1.1 Development of supply capaci9es Chart 4.1.1-‐2 Beds available EU 27 Bed capacity in the EU also grew steadily to more than 28 million beds Number of beds EU 27 29 0 00 0 00 28 0 00 0 00 27 000 000 26 0 00 0 00 25 000 000 24 0 00 0 00 23 000 000 22 0 00 0 00 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Eurostat 49 4.1.1 Development of supply capaci9es Chart 4.1.1-‐3 Supply capacity 2010 by country The leading 5 EU countries account for 81% of businesses and 76% of beds Bed capacity 2010 by country Accommodation businesses 2010 by country FR FR IT IT ES ES GE DE GB GB NL NL AT AT DK DK BE BE Other Other Source: Eurostat 50 4.1.1 Development of supply capaci9es Chart 4.1.1-‐4 Number of accommoda>on businesses Italy has the largest number of accommoda9on businesses Source: Eurostat; bfs; *hotels only 51 4.1.1 Development of supply capaci9es Chart 4.1.1-‐5 Development of accommoda>on businesses Only Italy shows dis9nct growth for accommoda9on businesses Growth of accommodation businesses in selected countries 160 000 140 000 Number of businesses 120 000 Belgium 100 000 Denmark 80 0 00 Germany Italy 60 0 00 The Netherlands 40 0 00 Austria 20 0 00 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Eurostat 52 4.1.1 Development of supply capaci9es Chart 4.1.1-‐6 Share of hotels in the number of accommoda>on businesses Hotels are the predominant type of business in most countries Hotel percentage of accommodation businesses Selected EU countries 2010 80 70 60 in % 50 40 30 20 10 0 Germany Austria Belgium The Netherlands Denmark Italy Source: Eurostat 53 4.2.1 Development of supply capaci9es Chart 4.2.1-‐7 Percentage of hotel arrivals Hotel arrivals account for 60 to 86% of all arrivals Hotel arrivals 2010 – selected countries 90.0 80.0 70.0 in % 60.0 50.0 40.0 30.0 20.0 10.0 0.0 AT DE IT BE NL DK Source: Eurostat 54 4.1.1 Development of supply capaci9es Chart 4.1.1-‐8 Development of number of hotel businesses The number of hotels dropped no9ceably in Germany and Austria. It increased slightly in Italy and the Netherlands. Number of hotels Selected countries 2010 45 0 00 40 0 00 Number of hotels 35 0 00 Germany 30 0 00 Italy 25 0 00 Austria 20 0 00 Switzerland The Netherlands 15 0 00 Belgium 10 0 00 Denmark 5 000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Eurostat 55 4.1.1 Development of supply capaci9es Chart 4.1.1-‐9 Hotel beds in selected countries in 2010 Italy shows the largest supply of hotel beds Hotel beds in selected EU countries 2 500 000 Number of hotel beds 2 000 000 1 500 000 1 000 000 500 000 0 Italy Germany Austria Switzerland The Netherlands Belgium Denmark Source: Eurostat 56 4.2.1 Development of supply capaci9es Chart 4.2.1-‐10 Development of number of hotel beds The number of beds per hotel has increased everywhere Average bed capacity per hotel 180.0 160.0 Number of hotel beds 140.0 Italy 120.0 Germany 100.0 Austria Switzerland 80.0 The Netherlands 60.0 Belgium Denmark 40.0 20.0 0.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Eurostat 57 4.2.1 Development of supply capaci9es Chart 4.2.1-‐11 Average size of hotels in selected countries in 2010 Average hotel capacity fluctuates between 44 and 169 beds Hotel beds / hotel Selected countries 2010 180 160 140 N 120 u m 100 b 80 e 60 r 40 20 0 DK NL IT BE CH DE AT Source: Eurostat 58 4.1.1 Development of supply capaci9es Chart 4.1.1-‐12 Employees in the accommoda>on business The accommoda9on business employs 2.1 to 2.5 million people (I/2008 – II/2011) Among the staff are 500,000 to 600,000 more women than men Employees in the accommodation business Employees, magnitude 1000 3 000.0 2 500.0 2 000.0 1 500.0 1 000.0 EU 2 7 Men Women 500.0 0.0 Source: Eurostat 59 4.1.1 Development of supply capaci9es Chart 4.1.1-‐13 Employees in selected countries In terms of selected countries, Germany has by far the most staff employed under mandatory social security schemes. Employees in the accommodation sector 2008 – II/2011 Selected countries Employees, magnitude 1000 500 450 400 350 300 BE DK 250 DE 200 IT 150 NL 100 AT 50 CH* 0 Source: Eurostat 60 4.1 Hotels and accommoda9on businesses 4.1.2 Dynamics of demand AHer illustra>ng the size and development of accommoda>on capaci>es, especially with regard to the hotel market, we will now analyse the demand side in order to be beier able to understand developments in the sector and draw conclusions for the future. Countries selected for the study account for 42% of EU 27 arrivals In 2010, the EU 27 accommoda>on business plus Switzerland registered 780 million arrivals. The countries under considera>on for this study accounted for a total of 42% of those arrivals (Chart 4.1.2-‐1: Selected countries’ share of arrivals). With regard to hotels, shares are almost iden>cal for the various countries. The volume of hotel arrivals is slightly lower however, at 600 million or 78% of total arrivals. Seen as a whole, the countries under considera>on in this study represent a substan>al part of the EU. Among the selected countries, Germany and Italy had the largest number of arrivals: 135 million (17%) and 99 million (13%) respec>vely. The Netherlands had 30 million arrivals and Austria 29 million. Switzerland (hotels only) reported 14 million, Belgium 13 million and Denmark 6 million guests arriving (see Chart 4.1.2-‐2: Selected countries’ arrivals in 2010). Arrival growth depends on the economic situa9on Looking at arrival trends from 2007 to 2010, dependency on the economic situa>on becomes very obvious. The financial crisis, which turned into a general economic crisis when Lehmann Brothers Inc. collapsed, began in 2008. Already in that year, arrivals dropped in Italy (-‐0.63%) and in the Netherlands (-‐3.83%), but then recovered again, while in the other EU 27 countries under considera>on, they only dropped in 2009 and then increased again (see Chart 4.1.2-‐3: Growth of arrivals). By contrast, GDP growth rates started to drop in all countries in 2008 and crashed in 2009 (Chart 4.1-‐4: Growth rates Gross Domes>c Product). 61 4.1 Hotels and accommoda9on businesses 4.1.2 Dynamics of demand Holiday travel developed unevenly Economic condi>ons affect business and leisure travel to different degrees. Leisure travel remained rela>vely stable. Compared to the boom year of 2007, the economic crisis caused a drop in leisure travel in Italy and Belgium and briefly also in Austria. Germany and the Netherlands showed liile reac>on to the shrinking GDP. In Germany especially, there was no dis>nct feeling of crisis, because hardly any jobs were lost despite the decreasing GDP. This study only captures the type of travel, not its dura>on. It is quite possible that shorter trips were taken and that long-‐distance travel was subs>tuted by travel within Europe. The choice of accommoda>on is not captured either. It only becomes obvious that in Germany and the Netherlands, slightly more leisure travel was recorded than before the crisis, while leisure travel dropped in Austria, Italy and Belgium. Compared to the base value of 2007, leisure travel increased strongly in Denmark in 2010, but in rela>on to the big countries, growth was small in absolute terms (Chart 4.21.2-‐5: Dynamics of leisure travel). Economy has a bigger impact on business travel Business travel shows more dependency on economic condi>ons. Based on the 2007 index, business travel clearly drops in Belgium, Italy and Austria. The index for Belgium decreases to 55 points and for Italy to 64 points. Growth for Germany, however, is posi>ve: the 2010 index increases to 112 points. Denmark is a case of its own in this respect as well. The index curve is flat un>l 2009, but rises steeply to 147 points in 2010, when the number of business trips recorded exceeded that of the base year 2007 by approximately 2.7 million (Chart 4.1.2-‐6: Dynamics of business travel). Further research is recommended with regards to Denmark, as the sta>s>cs method was changed in 2010. 62 4.1 Hotels and accommoda9on businesses 4.1.2 Dynamics of demand Ongoing increase in travel Looking at the long term, it is significant that travel ac>vity is increasing and that arrivals in the EU have risen by some 120 million over the past ten years. It does not seem likely that this structurally posi>ve trend will cease, even though transport costs will probably rise in the coming years. It can also be seen, however, that the number of trips declined during the crisis (Chart 4.1.2-‐7: Arrivals in the EU). Economic condi>ons strongly affect the decision to travel and determine the intensity and fluctua>on of the long-‐term growth trend. This shows clearly with regard to travel from foreign countries, which in the EU as a whole, has actually decreased since 2008 (Chart 4.1.2-‐8: Foreign arrivals in selected countries). It should be noted that over the past ten years, an increase has been recorded, first for the number of arrivals from Eastern Europe and Russia, followed by Asia, especially China and India. Dura9on of stay is slowly decreasing Travel ac>vity in general is increasing, but trips have become visibly shorter in the past decade. First of all, average stays are clearly longer in the typical holiday countries Denmark, Austria and Italy than they are in Germany, Belgium and the Netherlands, which are more characterised by business travel. While in 2001, the average stay in Denmark was almost 5 days, it was only 2.7 days for Germany and Belgium. In 2010, Denmark recorded an average stay of 4.6 days, whereas it dropped to 2.3 days in Belgium at the opposite end of the scale (for a comparison of the countries at a glance see Chart 4.1.2-‐9: Dura>on of stay). Trips have become shorter overall. The winner: acrac9ve ci9es Business developed best in ci>es which are economically significant as well as being tourist airac>ons. If ci>es are sorted into primary, secondary and ter>ary des>na>ons, it becomes clear that long-‐term growth takes place with much higher margins in ci>es like Rome, Berlin or Vienna than it does in ci>es like Pistoia, Würzburg or Klagenfurt. 63 4.1 Hotels and accommoda9on businesses 4.1.2 Dynamics of demand The logic behind this is simple: tourism is much more pronounced in des>na>ons where business ac>vity and cultural airac>veness come together than in those that are only economically or only culturally interes>ng. For Germany, this was shown in detail by Hotour (2011). AHer classifying 90 German ci>es as primary, secondary or ter>ary des>na>ons according to their airac>veness, the long-‐term development of overnight stays was monitored. The result was that from 2001 to 2010 overnight stays at primary des>na>ons increased by 62.1%, while the increase for secondary des>na>ons was 29.0% and for ter>ary des>na>ons 17.8 % (see Chart 4.1.2-‐10: Comparison of des>na>ons). Low u9lisa9on and structural excess capaci9es in the long term The interface between supply and demand is the occupancy rate for beds on offer. Looking in the long term, it becomes obvious that the sector has to deal with intense compe>>on and pressure. In all of the selected countries, occupancy rates in the accommoda>on business dropped well below 50% between 2001 and the second half of 2011. Figures between 30 and 40% dominate (Chart 4.1.2-‐11: Occupancy rate). These figures are not the result of economic condi>ons -‐ supply and demand differ too much. The accommoda>on business is characterised by structural excess capaci>es. Certainly there are many reasons for such structurally low u>lisa>on or such structural excess capaci>es. One of these is seasonality, which characterises holiday regions like the Mediterranean, North Sea and Bal>c coasts on the one hand and winter sports resorts on the other hand. It causes the supply of beds and the whole tourism infrastructure to lie idle for en>re months and weeks. 64 4.1 Hotels and accommoda9on businesses 4.1.2 Dynamics of demand Other typical reasons for structurally low u>lisa>on are: -‐ The hotel environment is constantly working on the airac>veness of its concepts and facili>es. Especially with regard to modest hotels and guesthouses, demands on furnishings and design are rising substan>ally. To a large extent, this is the result of the budget concepts of hotel chains. But demands and expecta>ons for design and bou>que hotels have also increased. Hoteliers who are unable to renovate sufficiently will run into problems regarding airac>veness. Outdated rooms are nevertheless s>ll oHen offered for a long >me. -‐ Barriers for entering the accommoda>on business are low. It is rela>vely easy to start a guesthouse, small hotel or bed & breakfast establishment. Hotels aiming at business travellers or high-‐end patrons, however, involve larger market entry barriers. -‐ Price-‐performance ra>os which are not compe>>ve. Rule of thumb: profitability requires 55 to 65% occupancy According to one of the sectors’ rules of thumb, occupancy needs to be at 55 to 65% to enable the business to be profitable in the long term. This is only a rough guideline, and the rule must be defined in different ways, depending on the region and the type of business. It is clear, however, that the yield poten>al of businesses with an occupancy rate in excess of 70% is much higher and that such businesses are also of par>cular interest for tex>le services. Among the 100 hotels with the biggest turnover in Germany, for example, only one reportedly had an occupancy rate of less than 50% in 2010 (see Der Hotelier. Allgemeine Hotel-‐ und Gastronomie-‐Zeitung, No. 22/2011, p. 1pp). Otherwise occupancy rates of hotels with a high turnover clearly exceed average occupancy rates. Especially in the case of city hotels, high occupancy rates translate into a high number of arrivals and therefore a significant demand for linens. 65 4.1.2 Dynamics of demand Chart 4.1.2-‐1 Selected countries’ share of arrivals The countries under considera9on accounted for 42% of all EU arrivals in 2010 Share of arrivals 2010 – selected countries 100% = 782,341,627 17% Germany 2% Switzerland Austria 4% The Netherlands 4% Belgium 1% 58% 1% 13% Denmark Italy Remainder of EU 27 Countries Source: Eurostat, own calcula>ons; EU 27 plus Switzerland 66 4.1.2 Dynamics of demand Chart 4.1.2-‐2 Selected countries’ share of arrivals Germany and Italy had more than 100 million arrivals in 2010 Arrivals selected countries 2010 160 0 00 0 00 140 0 00 0 00 Number of arrivals 120 0 00 0 00 100 0 00 0 00 80 000 000 60 000 000 40 000 000 20 000 000 0 DE IT NL AT CH BE DK 2010 Source: Eurostat 67 4.1.2 Dynamics of demand Chart 4.1.2-‐3 Growth of arrivals Travelling ac9vity is affected by economic condi9ons Growth rates arrivals accommodation sector 2007 to 2010 8.00% 6.00% 4.00% Germany 2.00% Switzerland* 0.00% Austria WR 2007 WR 2 008 WR 2009 -‐2.00% WR 2010 The Netherlands Belgium Denmark -‐4.00% -‐6.00% Italy EU -‐8.00% -‐10.00% Source: Eurostat, FSO *(CH) hotel arrivals only, own calcula>ons; WR = growth rate 68 4.1.2 Dynamics of demand Chart 4.1.2.-‐4 Growth rates Gross Domes>c Product The economy slumped in all countries under considera9on Growth rates GDP 2007-‐2010 in % 8.00% 6.00% DE 4.00% CH* 2.00% AT DK 0.00% 2007 2008 2009 2010 -‐2.00% IT NL BE -‐4.00% EU 2 7 -‐6.00% -‐8.00% Source: Eurostat, FSO *(CH) Effects of exchange rate changes have to be taken into account for Switzerland 69 4.1.2 Dynamics of demand Chart 4.1.2-‐5 Dynamics of leisure travel Local leisure travel shows uneven development for selected countries Development leisure travel Selected countries 180 160 Index 2 007 = 1 00 140 120 BE DK * 100 DE 80 IT 60 NL 40 AT 20 0 2007 2008 2009 2010 2011 Source: Eurostat, *DK: change of method in 2010 70 4.1.2 Dynamics of demand Chart 4.1.2-‐6 Dynamics of business travel No increase in local business travel in selected countries Development business travel Selected countries 160 140 Index 2 007 = 1 00 120 BE 100 DK * 80 DE 60 IT 40 AT 20 0 2007 2008 2009 2010 2011 Source: Eurostat, *DK: change of method in 2010 71 4.1.2 Dynamics of demand Chart 4.1.2-‐7 Arrivals in the EU Guest numbers in the EU rise long-‐term Number of foreign arrivals has decreased since 2008 Number of arrivals in the EU 900 0 00 0 00 800 0 00 0 00 700 0 00 0 00 600 0 00 0 00 500 0 00 0 00 400 0 00 0 00 300 0 00 0 00 200 0 00 0 00 100 0 00 0 00 0 2001 2002 2003 2004 Arrivals EU 2005 2006 2007 2008 2009 2010 Foreign arrivals EU Source: Eurostat 72 4.1.2 Dynamics of demand Chart 4.1.2-‐8 Foreign arrivals in selected countries Long-‐term increase in foreign arrivals of the countries under considera9on The 2008/2009 economic crisis caused a decline Foreign arrivals in selected countries 40 000 000 35 000 000 30 000 000 Belgium 25 000 000 Denmark Germany 20 000 000 Italy 15 000 000 The Netherlands Austria 10 000 000 Switzerland 5 0 00 0 00 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Eurostat 73 4.1.2 Dynamics of demand Chart 4.1.2-‐9 Length of stay The average length of stay dropped everywhere – most markedly in Austria and Italy Average length of stay accommodation businesses In days and in selected countries AT NL IT 2010 2001 DE DK BE 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Source: Eurostat 74 4.1.2 Dynamics of demand Chart 4.1.2-‐10 Comparison of des>na>ons Acrac9ve ci9es (primary des9na9ons) developed more favourably than secondary and ter9ary des9na9ons Overnight stays according to destination category Million 70 60 50 40 Primary Tertiary 30 Secondary 20 10 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Hotour 2011 75 4.1.2 Dynamics of demand Chart 4.1.2-‐11 Occupancy rate The level of occupancy is very low Gross occupancy of accommodation businesses 50 45 40 in percent 35 BE 30 DK 25 DE IT 20 NL 15 AT 10 CH 5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1-‐6, 2011 Source: Eurostat, FSO; Switzerland hotel occupancy only 76 4.1 Hotels and other accommoda9on businesses 4.1.3. Trends that determine the future of the accommoda>on business Apart from quan>ta>ve developments as described, tourism habits will also change – with regard to demand as well as supply. Such changes will not take place erra>cally, but in an evolu>onary process. If a far-‐reaching economic crisis has to be overcome, however, the speed of change may dras>cally pick up for some trends. In its basic structure the accommoda>on business is a buyers’ market, i.e. The demand side is in a stronger bargaining posi>on. Trends on the demand side are therefore the star>ng point (Chart 4.1.3-‐1: Demand trends). (1) The demographic factor: tourism products must develop with the baby boomers The years from about 1952 to 1965 showed par>cularly high birth-‐rates in Europe. People born in those years are known as baby boomers. Now, between their late 40s and early 60s, they are shaping markets and infrastructures by their numbers and spending power. In their personal lives, they are past the >me of building careers and raising a family -‐ the children are adults themselves. The baby boomer genera>on now has more >me on their hands and more income at their disposal. They are very experienced, well-‐informed consumers who know the meaning of the price-‐performance ra>o. Many of them have travelled extensively and become discerning travellers. They value security, personal service, convenience, cultural experiences and ac>ve recrea>on with light physical ac>vity such as hiking and cycling. Eco-‐social values and sustainability as well as hygiene and a good price for their accommoda>on are important to them. (2) Increasing numbers of guests from emerging countries (BRIC tourism) The rising economies in Brazil, Russia, India and China have resulted in a broad middleclass with good incomes and a desire to catch up in terms of travel (Chart 4.1.3-‐2: Increasing middleclass in BRIC countries). “Old world” Europe is a preferred des>na>on. 77 4.1 Hotels and other accommoda9on businesses 4.1.3. Trends that determine the future of the accommoda>on business In 2010, some 3.8 million visitors to Europe came from China alone. This number is expected to rise to about 15 million by 2020 (see Z-‐point/Tui 2012, p. 4pp). For the accommoda>on business, significant possibili>es for differen>a>on as well as market niches are opened up by the resul>ng changes. For a number of years “old world” Europe will s>ll be interes>ng for travellers from Asia, but they will look increasingly towards par>cular themes, mainly in the context of culture and sports. Beach holidays are not par>cularly popular yet. Security is a very important aspect for many interna>onal travellers because they find themselves in an environment which is totally new and unfamiliar to them, making it difficult to size up poten>al risks. Hygiene is essen>al as well, not least because European bacteria differ from those at home. The various interna>onal epidemics, such as SARS or swine flu, had an enormous impact on travel. They clearly highlighted the importance of hygiene in interna>onal tourism. Another essen>al aspect is that Internet connec>vity is extremely important for Asian tourists, par>cularly the Chinese. (3) Price-‐performance ra9o becomes more important from the traveller’s point of view These days, travellers are much more aware of the services offered by their hotel or guesthouse in the context of prices asked for. There are several reasons for this: -‐ a high degree of transparency due to the Internet -‐ travellers are very experienced and know exactly what they want -‐ more transparent accounts for business trips -‐ >ghter budgets for business trips -‐ many interna>onal tourists travel on rather low budgets (4) Increasing importance of ecological values It has become important to travellers, that their trip is in tune with ecological values. Eco-‐miles can be bought, for example, in order to compensate for the environmental damage caused by flying, and hotels’ efforts at ecological compa>bility are received well. 78 4.1 Hotels and other accommoda9on businesses 4.1.3. Trends that determine the future of the accommoda>on business Hotel coopera>ons that strongly emphasise ecological aspects have already been formed, e.g. Eco Hotels of the World. Criteria for the sustainability of hotels have also been developed. They are specified in the Austrian eco-‐label for tourism, for example. On the whole, the scene is a liile confusing at present, but that indicates that there is a lot of development going on. According to a study by a consumer research associa>on, every third household in Germany, which travels ac>vely, considers eco-‐social aspects to be important, and would even be prepared to pay more for them (Lomoth 2012). In the medium and long term, it will become a maier of course for tourism to take ecological issues into account first, social issues thereaHer. Travellers will come to expect that such issues have already been solved. (5) Increasing individualisa9on It is no longer easy to package and standardise mo>va>on for travel. Especially the experienced travellers in the “young seniors” group oHen have very detailed ideas and want good personal service. Group and package tours are not as popular any more as they used to be. For the tourism industry, however, this also opens numerous possibili>es for differen>a>on and specialisa>on. (6) Online culture Increasing numbers of travellers operate online. Not only to communicate, but also for daily requirements, and trips are planned, booked, executed and evaluated online. A mul>tude of products are available on the web for that purpose (Chart 4.1.3-‐3: Websites for travel planning). Hotels have to adapt to this in terms of distribu>on channels and marke>ng. They will also con>nue to make more informa>on available on the Internet and develop applica>ons to facilitate the stay. Wi-‐Fi access has long since become a selec>on criterion. 79 4.1 Hotels and other accommoda9on businesses 4.1.3. Trends that determine the future of the accommoda>on business The supply side has to cope with changing demand on the one hand and cost pressures on the other hand. We see a number of basic trends as being essen>al in order to remain airac>ve to travellers and be able to absorb rising costs. These trends will also leave their mark on tex>le services. The trends on the supply side (Chart 4.1.3-‐4: Supply trends): (1) Hotel brands gain market shares Compe>>on is very dynamic in the big ci>es in par>cular. It is vigorously driven by hotel brands and aimed at business travellers as well as city tourists. Room for the further expansion of brand hotels exists in airac>ve ci>es in par>cular, where there is s>ll a strong component of privately managed hotels. In interes>ng ci>es, this is oHen the three-‐star segment because in Europe, independent, private providers s>ll have a large market share. Hotel brands have several strengths which put pressure on independent hotels: Hotels that are part of a brand usually have a clear-‐cut strategy and posi>on among compe>tors as well as a dis>nct marke>ng and sales presence. They are able to u>lise synergies in procurement, distribu>on and organisa>onal know-‐how and have easier access to the financial markets. In many cases, private providers are unable to keep up with them. If hotels are not well-‐posi>oned, they can therefore be badly affected or completely driven out of the market, both competently and successfully, or they are taken over as another branch of a brand. In addi>on, it can be seen that private hoteliers oHen encounter problems in finding a successor, and therefore sell to a chain. On the whole, the largest European hotel companies no>ceably expanded their capaci>es with their brands in 2011 (Chart 4.1.3-‐5: The largest hotel companies in the EU). They have been gaining market shares in Europe for years. At present, the market share of hotel brands is es>mated to be 27% (MKG 2011). In view of the fact that the share of hotel brands in North America is 71% it becomes obvious that Europe s>ll offers considerable room for further gains in market shares. 80 4.1 Hotels and other accommoda9on businesses 4.1.3. Trends and challenges in the accommoda>on business (2) Growth in the budget hotel industry Hotel enterprises and brands have been entering the economy market increasingly with budget concepts for some >me now. Tradi>onally, that segment used to be dominated by privately managed one and two-‐star hotels. Brands like Motel One, Formula 1 or IBIS have become popular with many a traveller. They combine reasonable prices with stylis>cally confident facili>es for their guests, concentra>ng on a good buffet breakfast, well equipped bathrooms, free Wi-‐Fi access, great TV sets – at prices which start below EUR 50. In turn, the recep>on is more modest, and there are no doormen in uniforms, no bell boys and no porters. Budget hotels are usually found in the one and two-‐star category, which accounts for a rather small market share of less than 25% in the countries under considera>on. By contrast, the market share of this category is significantly bigger in other countries. In France, for example, it is more than 50%. This is an indica>on of the poten>al offered by this category. Especially during and aHer a crisis, markets are prepared to expand budget offers. A study by the MKN Group shows that in 2010, the majority of new hotels opened in the economy segment (Chart 4.1.3-‐6: Growth by hotel category). Since 2012, the largest hotel enterprise in Europe, Accor, is targe>ng this segment even more intensively than before. The IBIS, Etap, and All Seasons brands are to be consolidated under the IBIS, name to strengthen the brand. The IBIS brand will be three-‐>ered: (1) IBIS Hotels will provide the same level of convenience and facili>es for which they are already known for, (2) IBIS Budget with trimmed conveniences and (3) IBIS Styles where reasonable prices are to be matched with design-‐oriented furnishings. This concept will be rolled out worldwide in 2013. 81 4.1 Hotels and other accommoda9on businesses 4.1.3. Trends and challenges in the accommoda>on business (3) Lots of know-‐how, outsourcing, capital in short supply Against the background of a dis>nct and more demanding buyers’ market, lots of know-‐how and flexibility are needed to run a hotel or a group of hotels. Developments within the economy and society have accelerated and demand shorter response >mes. The large hotel companies are con>nuously changing their concepts in order to remain airac>ve to the market, and their por€olios are designed for different target groups in order to spread yield risks. Technological developments embraced by travellers and hotels require concentra>on on the perfect environment in accordance with the wishes of guests. Many tasks which are necessary to ensure the well-‐being of guests are transferred to partners: independent restaurants, kiosks, cleaning of the premises, room service, tex>le services, gym, cosme>c studio etc. The hotel management ensures that these services are provided, but does not provide them itself. It is a growing trend that helps hotels to change and adapt faster, which is a prerequisite for hotel brands that wish to gain market shares. This mainly involves two aspects: (1) Hotels concentrate on their core business, i.e. airact travellers and afford them the best possible care and aien>on, and (2) Tie up as liile capital as possible, because capital commitments are oHen one of the major obstacles for flexibility and adapta>on. (4) Differen9a9on Higher informa>on levels among travellers and their powerful bargaining posi>on cause a dis>nct differen>a>on of accommoda>on products. The influence of “young seniors” on overall demand, as described earlier, has already resulted in a wide variety of wellness hotels, while other accommoda>on businesses specialise in culture, hiking or cycling. Classifica>on standards for 50+ hotels have even been introduced. Other areas of diversifica>on are sports, family holidays or different regions. 82 4.1 Hotels and other accommoda9on businesses 4.1.3. Trends and challenges in the accommoda>on business Conference hotels have become important for business travel. The general rule is that hotels with a clearly defined target group and sufficient poten>al will be able to assert and strengthen their market posi>on. (5) Sustainability Viewing accommoda>on businesses, tourism companies and even des>na>ons in terms of their sustainability is currently a strongly increasing trend, taken up by the buyers (see above). Implementa>on requires heavy investments by hotels. Ecological aspects are taken into considera>on by building services in par>cular (ligh>ng, hea>ng, hot water processing). As for the guest, it has long since become customary to draw aien>on to the ecological consequences of changing towels daily and to offer alterna>ves. In this respect, the ecological posi>on of a hotel is strengthened if its tex>le service is ecologically cer>fied or at least visibly commiied. This is also an advantage in some hotel classifica>ons. (6) Service technologies for personalising the guest’s stay Among the most interes>ng innova>ons are the technologies which enable travellers, personal choices for the dura>on of their stay, similar to the Smart Home Technology for private homes. Some of these technologies are illustrated in Chart 4.1.3-‐7: Technical horizons for guest services. They will affect tex>le services only par>ally, but it is quite conceivable that various op>ons for the bedding or the bathroom would be offered in the menu of this virtual room service. Such op>ons could already be offered, however, with a drop-‐down menu at the >me when the booking is made. On the whole, it is to be expected that communica>on between the hotel and the guest will rely increasingly on interac>ve systems. Tex>le services should begin looking around for ways of ge[ng integrated into this personal form of communica>on with the guest. 83 4.1.3. Trends that determine the future of the hospitality business Chart 4.1.3-‐1 Demand trends Development characterised by shiYs in tourism demand Shifting demand transparent budgets demographic change: 1. Target group “young for business travel clients experienced in travel seniors” gains clout tighter budgets for 2. Increasing increase in Asian business trips internationality visitors 3. Critical priceattractiveness of performance ratio cultural interest big cities Nachfragevalues 4. Ecological become important price-performance ratio health/wellness 5. Increasing individuality individuality sustainability 6. Online culture hygiene online culture vegetarians increased sensitivity to prices safety 84 4.1.3. Trends that determine the future of the hospitality business Chart 4.1.3-‐2 Rising middle class in BRIC countries The middle class of populous BRIC economies will expand significantly Share of middle class in total popula9on 2009 (%) 2015 (%) 2025 (%) Brazil 46 52 59 Russia 71 71 56 India 6 16 46 China 37 59 75 Source: Amadeus/Fast Future Research (2010, p.13) 85 4.1.3. Trends that determine the future of the hospitality business Chart 4.1.3-‐3 Websites for travel planning There is an increasing trend towards planning, booking, organising and evalua9ng travel plans online Bedding and bathroom furnishings are among the most important elements of the stay 86 4.1.3. Trends that determine the future of the hospitality business Chart 4.1.3-‐4 Supply trends Hotels have to manage shiYs in demand and cost pressures Buyer market Pressure for innovation Cost pressures Excess capacities Grey market Price competition Staff shortage New sales structures 1. Brands gain market shares 2. Budget hotels gain shares 3. Slimmed down Nachfrage management 4. Differentiation of products 5. Service technologies Standardisation Digitalisation Online connectivity Differentiation Smart room technologies Service expansion Crises Concentration Climate change Sustainability 87 4.1.3. Trends that determine the future of the hospitality business Chart 4.1.3-‐5 The largest hotel companies in the EU Eight of the ten largest hotel groups in Europe have expanded their capaci9es Top 10 of hotel companies in the European Union on 01 January 2011 Rank Company Hotels Hotels Hotel Rooms 2011 2010 growth 2011 1 Accor 2,272 2,231 41 246,665 2 Best Western 1,309 1,289 20 89,092 3 Intercontinental Hotel Group 545 548 -‐3 84,653 4 Group du Louvre 942 995 -‐53 66,705 5 NH Hoteles 354 352 2 51,121 6 Carlson Europe/Rezidor 247 228 19 49,237 7 Sol Melia 204 203 1 44,531 8 TUI 164 158 6 41,639 9 Hilton International 177 163 14 41,214 10 Whitbread 588 579 9 40,975 Rooms Rooms 2010 growth 242,288 1.8% 87,017 2.4% 84,522 0.2% 71,544 -‐6.8% 50,502 1.2% 44,471 10.7% 45,960 -‐3.1% 39,914 4.3% 39,713 3.8% 39,142 4.7% Source: MKG 88 4.1.3. Trends that determine the future of the hospitality business Chart 4.1.3-‐6 Growth by hotel category Budget hotels showed the strongest growth in 2011 Basis: MKG 89 4.1.3 Trends that determine the future of the hospitality business Chart 4.1.3-‐7 Technical horizons for guest services Hotels 2020 – Func9onality and service change the sector Technology Effects on the sector Guest room func9onality Room concierge Within the next decade instruments will be used to offer a personalised concierge service. These could take the form of monitor screens, tablets or pads to request a virtual or real concierge when needed, or ul>mately they could be personal robots. The Berkley Hotel in London and the Plaza in New York offer iPads in all rooms and suites. The Plaza also offers a virtual Concierge App with a Mul>media Welcome Video which allows guests to read newspapers, surf the internet , order room service, book restaurants, communicate with the real concierge , arrange wake-‐up calls, view airline schedules, print out boarding cards and discover New York city des>na>ons. Robot staff Next Genera>on Analyses established that the demand for all-‐inclusive service robots will be worth 15 billion US Dollar in 2015 or some 5 million robots per year (CNET News 5/27/09). Robots can be used as individual butlers for rooms and take over core tasks like porter services and cleaning rooms. Support for mee9ngs Hybrid and virtual events Hotels should strive to offer a type of func>onality which enables event organisers to integrate virtual events and online par>cipants into live events. These applica>ons include audio-‐visual TV/Radio content, 2D and 3D trade fairs as well as virtual interac>on of par>cipants. 90 4.1.3. Trends that determine the future of the hospitality business Chart 4.1.3-‐8 Self-‐service and hybrid events Hotels 2020 – The hotel as the temple of high-‐tech Technologie Effects on the sector Check-‐in QR – Quick Response codes These 2-‐D barcodes have been designed for illustra>on purposes and for being read by mobile phones. Airlines and railway companies now admit QR codes on mobile phones as electronic boarding passes and >ckets. QR codes can be used for checking in, for safety, marke>ng and product offers. Guest services Self-‐service kiosk While the use of kiosks in the hotel sector has increased considerably, the ques>on arises whether guests prefer the same func>ons via their mobile phone which in general would make the kiosk redundant. A study conducted in 2010 by the Cornell Centre for Hospitality Research (CHR) found that the self-‐service kiosk contributes to guest sa>sfac>on and improves hotel finances. In case of problems with the self-‐service system guests refuse to pay or return premiums. There is a possibility to offer addi>onal func>ons and personalised services, which could generate extra turnover. Interac9ve displays Interac>ve coffee tables, windows and walls, too, could enhance guest sa>sfac>on. Even human skin can be given a display surface. Scien>sts have created a system which turns hands and arms into touchscreens. Skinput uses projectors the size of a microchip which allow interac>ve elements to be executed through the forearm or hand. 91 4.2 Restaurants Restaurants are characterised by their table and service culture, which are an expression of the aien>on that guests can expect. At the same >me, the well set table and a neatly dressed service team that await the guest are an indica>on of what type of client is to be airacted and what expecta>ons will be met on the part of patrons. In this context, the use of tex>les has the concrete func>on of protec>ng and preserving, as well as a decora>ve func>on, which supports marke>ng. These aspects must be viewed together and both are subject to changes over >me, as needs change not only in terms of quality, but also with regard to quan>ty. The driving forces of change in restaurants are illustrated in Chapter 3, Chart 3-‐4 (Driving forces in the HORECA tex>le services market) and Chart 3-‐5 (Summary of dynamic factors of the HORECA market). Restaurants show considerable fluctua9on The first considera>on of tex>le services is how restaurants develop as a business. Restaurants as a business type show considerable fluctua>on, because concepts change fairly quickly: what is considered “the place to be” one day is no longer “in” two years later, and in some cases, owners or tenants also change every year. On the other hand, there are restaurants and cafés which are a feature of a given town or part of town and do not change hands for many years. Restaurants on the whole, however, are not an ideal target group for tex>le services which value long-‐ term customer rela>onships. Significance of European sta9s9cs is currently limited Currently, it is difficult to illustrate developments with homogeneous sta>s>cs for all of Europe. This is due to adjustment processes on both European and na>onal level. In 2008, Eurostat changed its system of capturing product and service groups. Therefore, results can no longer be compared with those of earlier years. Furthermore, these changes have not been fully completed in all countries yet, so that comparisons between par>cipa>ng countries (except Switzerland) can only be made for 2008 and 2009. 92 4.2 Restaurants Methods have also been changed on a na>onal level. Germany, for example, introduced a system of rota>ng basic totals in 2009, which caused very no>ceable inconsistencies with previous methods. Eurostat, as the methodical basis for comparisons of the par>cipa>ng countries, will only stabilise in the next years where gastronomy is concerned. Some statements regarding structure, which support the general assessment of restaurants for tex>le services, can be made, however. The countries under considera9on account for about 40% of EU 27 restaurants According to Eurostat, there were more than 820 000 restaurants in the EU 27 in 2009. Germany with 124 000 (15%) and Italy with 123 000 (15%) accounted for the lion’s share among the countries under considera>on. Denmark, with 8 000 restaurants (2008) had the smallest share (Chart 4.2.-‐1: Restaurants EU27 in 2009). In 2009, this sector employed about 4.5 million people. According to Eurostat, Germany accounted for 1 million employees (22%) and Italy for approximately half that number (11%). For details, see Chart 4.2.-‐2 (Restaurant staff EU27). The effect of expected income and economic condi9ons Visits to restaurants, whether private or business, are subject to the available budget or the expected development of that budget. To start with, it is a ques>on of the prevailing economic climate, because changes to private income or expense accounts, due to the economic situa>on, are an important reason for the changing paierns of restaurant visits. 93 4.2 Restaurants Structural effects on income expecta9ons It is not only the state of the economy that affects private income and company expense accounts. Especially in Germany, the largest market for restaurant turnover, income expecta>ons during the past 10 years were strongly characterised by a financial thinning of the middle class and difficult years of adapta>on in companies. The “precarious” condi>ons on the job market, illustrated by mini-‐jobs and temporary work, have increased no>ceably, boosted by labour market reforms. Together with more flexible regula>ons regarding short >me, they reduced expected as well as actual income of staff, as well as former employees who were forced into self-‐employment. This resulted in a drop in expenditure in restaurants, which in Germany lasted from the >me the Euro was introduced un>l 2011. According to the German Hotel and Catering Associa>on, restaurant turnover in Germany dropped even during the economic boom of 2006 to 2008 (see Chart 4.2.1 – 4: Turnover development for restaurants and GDP). It illustrated the structural changes to living condi>ons in Germany. Added to that, company expense accounts became subject to much stricter control and transparency, causing restaurant turnover to con>nue to drop in 2007 and 2008 despite favourable economic condi>ons. Restaurant turnover increased again for the first >me in 2011. The German example illustrates that in the short and medium term, economic condi>ons are not always the decisive force that determines growth of restaurants. Structural developments may have a greater effect than the economic impulse. For Europe and the countries under considera>on, no uniform paiern can currently be iden>fied between turnover growth of restaurants and economic developments. It is quite possible that incomes in Italy are now subject to the processes of structural adapta>on seen in Germany 8 to 10 years ago, because Italy is presently experiencing structural adapta>ons throughout the en>re public sector and private economy. 94 4.2 Restaurants Restaurants are predominantly small businesses Restaurants are small businesses which are oHen managed by a family or single persons. In Europe, the average size, in rela>on to staff, is 5 to 6 employees. Par>cularly interes>ng in this context are Belgian restaurants with 3.3 employees at the boiom of the scale and the Netherlands with 10 employees per restaurant in 2009 at the top end (see Chart 4.2.1-‐1: Staff per restaurant). The picture is similar when turnovers are compared: the average turnover of restaurants in Europe was € 234, 000 in 2009. At the boiom of the scale was Italy with € 195, 000, while the Netherlands led with € 413, 000 (see Chart 4.2.1-‐2 Turnover/restaurant). As a third structural magnitude, there is the comparison of turnover per employee. In the EU, the total turnover is € 42, 000 per employee. Germany is at the boiom of the range with € 30, 000 per staff member in 2009, while Belgium is at the top with € 67,000 (see Chart 4.2.1-‐3 Turnover/staff). The restaurant types behind these rough structural numbers and comparisons are very different, from small individual restaurants, where the discerning cuisine of the patròn is the heart and soul, to the fast food system gastronomy and the neighbourhood pizzeria. System gastronomy is characterised by franchising, and each legally independent franchising company is reflected sta>s>cally. Restauranteurs and restaurant managers typically act in a very cost-‐conscious, middle-‐class manner. Tex>le procurement and maintenance is handled in different ways which, among others, depend on the following factors: -‐ own image -‐ helping family members -‐ part of a (franchise) chain -‐ number of employees in the restaurant -‐ awareness of HACCP -‐ visibility of the chef and the kitchen 95 4.2 Restaurants Increase in system gastronomy These days, basic restaurants have to deal with tough compe>>on from system gastronomy. Compared to modest restaurants, inns and pubs with a tradi>onal character, system gastronomy has considerable advantages. It ranges from purchasing to sophis>cated marke>ng and strategic concepts. Furthermore, the outlets of various system gastronomy companies stand for a known quality, and consumers are oHen familiar with the menu, the layout of the business and its procedures. Another reason for the growth of system gastronomy is a trend towards purely func>onal food intake that has been apparent for some >me now. Apart from the income developments men>oned earlier, consolida>on of work has resulted in taking much shorter lunch breaks than before. Speed and price are oHen the decisive criteria for restaurant choices and system gastronomy therefore score. But the retail trade, bakeries and petrol sta>ons benefit from this trend, too. Basic restaurants feel the squeeze. Depending on market penetra>on, system gastronomy grew, even at a >me when restaurant turnover dropped generally. System gastronomy becomes innova9ve service gastronomy System gastronomy has started to expand beyond the image of fast, affordable eateries with easily assessable quality. This applies to the design of the premises as well as to the kitchen and the service. The core principle of system gastronomy is standardisa>on and mul>plica>on. Newer concepts like Mongos, Block House or Vapiano also integrate and standardise the services of classic gastronomy. Open-‐minded consumers in par>cular, tend to perceive this innova>ve concept as trendy. When it comes to service, Vapiano for example, with a bar, dishes cooked to order and excep>onally friendly staff, cannot simply be placed between self-‐service and the classic full service. 96 4.2 Restaurants Rather, it is a different type of service: patrons communicate with the kitchen staff right at the kitchen counter, which means that they are more involved in the specifics of the prepara>on of their order. When the details have been sorted out, the patron is given a beeper which informs him when his meal is ready for collec>on. It seems almost natural that patrons themselves carry their food to their table. Procedures in the kitchen and the service are structured differently, and many patrons see that a refreshing innova>on. For the restaurant, it is just as interes>ng because processes can be standardised and cost control can be improved. Clearly posi9oned restaurants are also successful Successful restaurants have established a clearly defined posi>on for themselves. This does not only apply to top restaurants but also to the difficult medium segment. Decisive factors for successful posi>oning are: -‐ regional relevance of the cuisine and the restaurant -‐ boos>ng the image by focusing on the chef, an excellent wine list and exquisite furnishings -‐ down to earth atmosphere -‐ ecologically oriented restaurants that promote healthy cuisine for body and soul -‐ exceedingly pleasant service Theme restaurants, open air catering Concepts involving exo>c culinary themes (e.g. Mongolian cooking) or interac>ve communica>on technology are increasingly returning to city restaurants. The best-‐known example is the Inamo in London where tables are used as a projec>on surface. Available projec>ons include virtual tablecloths, menus and webcam views into the kitchen etc. 97 4.2 Restaurants Visits to restaurants oHen have the aim of combining socialising and ea>ng. With this in mind, open air catering will also con>nue to be an important aspect to develop further, as it imparts a sense of freedom from the constraints of offices and management floors. Bans on smoking have also contributed to increased significance of open air catering. Less table linen As a result of the advance of system gastronomy and the increasing popularity of tables with surfaces which look good or are at least easy to clean, restaurants have reduced their use of table linen. Tradi>onal restaurants have also no>ced that neatness and style are not necessarily connected to table linen. Nevertheless, a table that is airac>vely set with the use of tex>les is s>ll an important characteris>c of stylish high-‐end restaurants. Table linen produces a noble appearance. Reducing the use of table linen takes place in several steps: the table cloth and overlay are replaced by place sets and decora>ve runners or other combina>ons of table linen. In the last step tex>les are subs>tuted by paper or a self-‐service tray with a paper place mat and paper napkins. Even though many middle-‐class hotels in ci>es like Paris, Amsterdam or Frankfurt have adopted this style for their breakfast restaurants, it s>ll remains a characteris>c of fast food outlets. Increase in work wear and corporate wear Uniforms that emphasise the corporate image are an essen>al element of tex>les required by the gastronomy system in par>cular. They have the classic aims of corporate wear: -‐ ensure that employees are appropriately dressed 98 4.2 Restaurants -‐ enhance hygiene -‐ impart a promise of quality -‐ spread brand awareness But the presence of well-‐dressed service staff also underlines the image of high-‐end restaurants. If a restaurant is famous for its chef, he should be dressed in a manner that suits his image. Increasing significance of hygiene Hygiene plays an increasingly important role in professional food processing and thus also in restaurants in their role as the last link of the chain. This is not only because European regula>ons on foodstuffs are more stringently enforced by the na>onal law of the various countries but also because patrons have become more aware of issues surrounding health and care. In 2001, Denmark introduced hygiene smilies, which restaurants have to display in a conspicuous posi>on. The smilies represent the results of public inspec>ons in the form of a popular pictogram. They are ranked from the Elite Smiley, awarded for at least 4 years of excellent performance and no objec>ons, down to the sad Smiley indica>ng no>fica>on of the police and subsequent legal ac>on due to viola>on of foodstuff regula>ons or failure to adhere to them (see Chart 4.2.1-‐4: The use of smilies for transparency in hygiene in Denmark). Experiences made with the hygiene smilies have been posi>ve. In Germany, a similar concept was planned in 2011, but the hygiene “traffic lights” were dismissed by the economic ministries of the German federal states. The plan was reduced to a decision that the names of restaurants that have to pay fines exceeding 350 Euros for viola>ons against hygiene regula>ons will be published on the Internet. Although this is considerably watered down, it s>ll shows that hygiene is becoming more significant with regard to restaurants. In the same way, work wear will be used more in line with the HACCP concept s>pulated for businesses (see chapter 5.2.5: work wear for the kitchen). 99 4.2 Restaurants Chart 4.2-‐1 Restaurants EU 27 in 2009 Germany and Italy together have 30% of EU 27 restaurants The countries under consideration account for 40% of the 820,000 EU 27 restaurants in 2009. 3% 1% 15% 15% 60% 3% 3% BE DK* DE IT NL AT Other Source: Eurostat, *DK=2008 100 4.2 Restaurants Chart 4.2-‐2 Restaurant staff EU 27 By far the most employees in this the sector work in Germany The countries under consideration account for 44% of the 4.5 million employees in 2009. 2% 22% 56% 11% 4% 2% BE DE IT NL A DK* 3% Other Source: Eurostat, * DK=2008 101 4.2 Restaurants Chart 4.2-‐3 Turnover development for restaurants and GDP Up to 2011, restaurant turnover in Germany dropped steadily for years, even though GDP rose con9nuously, except in 2009 Growth rates GDP and restaurant turnover DE 6.0 4.0 P e r c e n t a g e 2.0 Restaurant turnover 0.0 2007 2008 2009 2010 2011 GDP -‐2.0 -‐4.0 -‐6.0 Source: DEHOGA, Federal Statistics Office 102 4.2 Restaurants Chart 4.2-‐4 Staff per restaurant Most restaurants have a small staff con9ngent Average number of staff per business 12.0 10.0 8.0 6.0 2008 2009 4.0 2.0 0.0 EU 27 BE DK DE* IT NL A Source: Eurostat, * DE new method in 2009 103 4.2 Restaurants Chart 4.2-‐5 Turnover/restaurant Average turnover in the EU was € 234,000 in 2009 Average turnover per business in € 450000 400000 350000 300000 250000 2008 200000 2009 150000 100000 50000 0 EU 2 7 BE DK DE* IT NL A Source: Eurostat, * DE new method in 2009 104 4.2 Restaurants Chart 4.2-‐6 Turnover/staff The low average turnover per employee is due to the large share of part-‐9me staff Average turnover per employee in € 80000 70000 60000 50000 40000 2008 30000 2009 20000 10000 0 BE DK DE* IT NL A Source: Eurostat, * DE new method in 2009 105 4.2 Restaurants Chart 4.2-‐7 The use of smilies for hygiene transparency in Denmark The smiley system in Denmark Since early 2000, Danish grocery inspectors are no longer employed by municipali>es, but directly by the Ministry of Foods and Beverages. The Smiley principle was introduced in 2001. Ini>ally, the necessary transparency had to be enforced as a result of the resistance shown by restaurant owners. Four different smilies for inspec>on results + an ELITE Smiley (since 2008)! J No complaints Reminder to adhere to the rules more closely KOrder or interdic>on by inspec>on authority L Penalty or complaint to the police J for 4 years of excellent performance and no objec9ons Elite The smiley system is successful with consumers and businesses Danish consumers are 100% familiar with the smiley, according to a 2008 survey by the Ministry of Food and Beverages. 97% think the system is “a good or very good idea”, 59% avoid a restaurant with a bad Smiley. 88% of inspected businesses now also think that the smiley is “a good or very good idea”; 86% feel they are “evaluated fairly”. 80% say – in the context of smilies– that they have had construc>ve discussions with their staff. .. Given / 2002 2003 2004 2005 2006 2007 2008 J 70.1% 75.2% 75.1% 76.7% 76.3% 75% 82.8% 26.2% 21.1% 21.2% 19.6% 19.6% 17.5% 12.7% K 1.9% 1.6% 1.7% 1.5% 1.4% 2% 1.2% L 1.8% 2.2% 2.0% 2.1% 2.6% 5.5% 3.3% 100% Total Source: www.foodwatch.de 100% 100% 100% 100% 100% 100% 2008 J Elite >40% 106 4.3 Catering The essence of catering services is to provide food and beverages at a place chosen by the client. From this nucleus, a wide range of products has been developed, which can reach far into event organisation and facility management. The catering market is very heterogeneous, consisting of five different segments: 1) Company cafeterias and canteens 2) Hospitals 3) Retirement homes and nursing homes 4) Schools, universities, nursery schools 5) Events and functions Textile requirements play very different roles in these market segments. At a client function (event segment), textiles will probably be much more diverse and elaborate, than in the refectory of a university. Catering is a service that has been developing successfully for years. Similar to the role of textile services, catering unburdens institutions and companies of a value creation function that is not part of the essential value creation processes, but rather plays a supporting role. The focus of schools and universities is on imparting knowledge, not on eating and drinking. Therefore one of the driving forces of growth in the catering industry is that companies and institutions do not have to deal with the running of in-house cafeterias or the preparation of patients’ food. Catering services take over these duties, which they then perform as instructed. 107 4.3 Catering According to Eurostat, there were approximately 65,000 catering companies operating in the EU 27 in 2009. Germany accounts for 11,869 (18%) of these, followed at a considerable distance by the Netherlands with 3,725 companies (5.7%) and Italy with 3,339 companies (5.1%), (see Chart 4.3-1: Distribution of caterers in the EU27 in 2009). According to Eurostat, catering services in the EU employed about one million people in 2009, with Germany accounting for 190,770 thereof (19%), Italy for 124,478 (12%) and the Netherlands for 42,580 (Chart 4.3-2: Catering staff by country). A mix of large and small companies The sector is characterised by a moderate number of very large companies and many medium and small businesses. With regard to staff structure, catering services in the EU had an average of fifteen employees in 2009. Italy stood out with 37 employees per company, while Germany and Austria employed an average of 16 and 15 people respectively. Belgium came last with 6 staff members per company (Chart 4.3-3: Staff per catering business). Average turnover per employee was € 45,000 for the EU 27 in 2009. Belgium occupied the first place with € 90,000, followed by Austria with € 75,000. Germany ranked last with a turnover of € 39,000 per employee (Chart 4.3-4: Turnover per employee in selected countries). Development of the sector does not conform to a regular pattern The large catering segments, also known as communal catering, are usually hired on a long-term contract. This applies to staff cafeterias, hospitals and retirement homes as well as schools and universities. Event catering on the other hand, specialises in providing food and beverages for non-recurring events such as a trade fair or the gala evening of a jubilee celebration. The numerous party services are also part of events catering. 108 4.3 Catering The market shares of the defined segments, have not been captured in official statistics and there is no recent study that analyses their significance for Europe as a whole. However for Germany, the largest catering market, a fresh analysis is available on the individual importance of the five segments for the turnover of the 40 biggest catering services. According to that analysis, company cafeterias are the most important segment by far, followed by hospitals and nursing homes. The latter are also known as “Care Catering“. In countries where catering services are smaller, they probably account for a larger share than staff cafeterias. Nursery schools, schools and universities are the smallest segment in Germany. Event catering has a share of 8% (Chart 4.3.5: Turnovers of the top 40 caterers by business segment). It has to be kept in mind, however, that events by companies in Germany probably account for more than the average level. The reason is that, by comparison, there are more large companies and most of the big international trade fairs are held in Germany. Catering services are often hired for fairs. Different drivers for growth in the various segments In terms of driving forces, the five catering segments can be divided into two groups: (1) segments subject to demographic development and politics - care catering, schools, nursery schools and universities (2) segments directly affected by the economic climate – staff cafeterias and event catering Demographics and politics as essential development factors Catering for children, teenagers and young adults during their years at nursery school, school and university is largely subject to demographics and the competition of institutions. Demographic development has a retarding effect in all countries. It remains to be seen, whether this can be overcompensated by increasing attractiveness of catering in order to unburden parents and schools. 109 4.3 Catering With the exclusion of Ireland and France, demographic development is characterised by the much discussed impact of an ageing population. Based on existing public care structures, demand for retirement homes and nursing homes will increase. This segment will inevitably grow over the next years. The fact that politics favours care-giving at home – also preferred by most people in need of care – may have a moderating effect. In that case, caterers will expand their ‘meals on wheels’ services. Similar trends apply to hospitals and clinics. The changes that health politics have caused to hospital structures are already evident. Hospitals are very expensive for health insurance beneficiaries and taxpayers. Since costs continue to rise, the political aim for health and nursing services is to reduce hospital stays and to restrictively control costs in all dimensions. In some countries, the number of hospitals will continue to drop and emphasis on outpatient care will increase further. Nevertheless, no shrinking of this segment is to be expected. But in the long term, budget pressures will remain extremely high for hospitals and nursing homes. The impact of economic conditions Economic conditions are the dominating factor for the development of the staff cafeteria and event catering segments. During times of crisis, the number of meals sold in staff cafeterias drops because of reduced shifts, short time and job losses. Event catering feels the effect of companies cutting back on entertainment budgets and private households entertaining less elaborately. This was seen in 2009. In some countries, e.g. Italy, Austria and Germany, catering turnover dropped (according to figures provided by the German Hotel and Catering Association). 110 4.3 Catering In other countries, the negative impact of unfavourable economic conditions was overcompensated for by the growth momentum generated by care catering in particular (Chart 4.3-6: Turnover comparison 2008 and 2009). The sector reports good and very good growth rates for 2010 and 2011, because continuing momentum in the care market was boosted by increased catering demand for staff cafeterias and events. Similar to textile services, growth rates in the catering sector are always higher than those of the economy on the whole. This can be expected to continue for some time, because the market shows no signs of saturation yet. Event catering is the most interesting segment for textile services The catering business has been mentioned as one of the growth potentials for textile services. A closer look quickly reveals however, that the amount of textiles required per meal served is very small, especially in the school and university segments. Hospitals usually have a cafeteria or restaurant for visitors and mobile patients, some of which use table linen. More table linen is used by nursing homes than by hospitals, in order to underline the residential character of the institution. But until now, it has not been very common to have table linen provided by catering services in nursing homes. Event catering is the segment that uses the most textiles (Chart 4.3-7: Textile use in the catering segments), where variety and quality are required in equal measure. Events are supposed to out of the ordinary, and they are often arranged to celebrate something special. Luxury and opulence are expected, and this also includes table linen and other textiles. Flexible, high-quality products are required by event catering services Event catering services are relatively difficult clients, because their needs vary strongly, depending on the type and number of events they are catering for at any given time. On the other hand, this is exactly the reason why they need a good textile services partner who has the expertise and the resources to respond to their needs flexibly. 111 4.3 Catering For an event catering service, it is important that guests perceive its products as an image factor for the service itself, as well as for the commissioning principal and the event as such. The uniforms of waitrons and logistics staff lie at the forefront. If live cooking is part of the event, the chefs and staff members behind the counter have to be dressed for the part. Table linen or covers for tables and chairs may also be required, depending on the type of event. Corporate attire for all catering services Even small catering businesses are now adopting corporate attire as a norm. On the one hand it is work attire, but on the other hand it is intended to make all members of staff who interact with clients and guests easily identifiable. This applies particularly to waitrons and delivery staff. Favourable future prospects The catering business has experienced excellent growth for years, because outsourcing is a successful business model and the limits of the market have not yet been reached. In fact, the range of services is expanding all the time. There are catering services, for example, which permanently come up with changing culinary concepts for specific locations - such as the Pardo museum restaurant in Dusseldorf. Non-food catering is also on the increase, providing furniture, table linen or mobile bars for events. While economic conditions are favourable, further significant bouts of growth can be expected in event catering in particular, which makes this market segment very attractive. 112 4.3 Catering Chart 4.3-‐1 Distribu>on of caterers in the EU 27 18% of the approximately 65,000 EU catering businesses are in Germany Distribution of caterers in the EU 27 DK 2% BE 5% DE 18% IT 5% Other 63% AT 1% NL 6% Source: Eurostat 113 4.3 Catering Chart 4.3-‐2 Catering staff by country 32% of approximately 1 million employees in European catering services work in Germany and Italy Catering staff by country 2009 BE 2% DK* 1% DE 19% Other 60% IT 13% NL AT 4% 1% Source: Eurostat 114 4.3 Catering Chart 4.3-‐3 Staff per business Italy has the largest catering businesses In 2009‘s crisis year, the average number of employees rose in IT and AT Staff per business 40 35 30 25 20 2008 2009 15 10 5 0 EU 27 BE DK* DE** IT NL AT Source: Eurostat, *2009=2008; **DE new method in 2009 115 4.3 Catering Chart 4.3-‐4 Turnover per employee in selected countries Belgium and Denmark show the highest turnover per employee Turnover per employee 120000 100000 80000 2008 60000 2009 2010 40000 20000 0 EU 2 7 BE DK DE* IT NL AT Source: Eurostat, *DE new method since 2009 116 4.3 Catering Chart 4.3-‐5 Turnovers of the top 40 caterers by business segment Event catering is a rather small business segment Turnover distribution of top 40 caterers Germany 2010 Schools, universities, kindergartens 5% Events 8% Nursing Homes 16% Staff c afeterias 46% Hospitals 25% Source: www.cafe-future.net/gv/rankings 117 4.3 Catering Chart 4.3-‐6 Turnover comparison, 2008 and 2009 The economic slump in 2009 was overcompensated for in some countries Catering turnover 2008 and 2009 Selected countries 8000 7000 6000 5000 4000 2008 2009 3000 2000 1000 0 BE DE* IT NL AT Source: Eurostat, *DE new method in 2009 118 4.3 Catering Chart 4.3-‐7 Tex>le use in the catering segments Event catering is par9cularly interes9ng for tex9le services Tex9le type Staff cafeterias Hospitals Nursing homes Schools etc Events Table cloths x x xx xxx Place sebngs etc. x x xx xx Servieces/Napkins xx xxx Kitchen linen x x x x x Work abre x x x x xxx Covers etc. x 119 5. Tex9le services as service providers 5.1 The compe>>on between distribu>on channels Textiles for hotels, restaurants and catering services are purchased through different distribution channels. Each of these is subject to its own set of decision processes and therefore handled in different ways by the marketing and sales divisions. The different distribution channels are: Ø Textile services Ø Specialist wholesalers Ø Retailers Ø Online/mail order Ø Direct sales The distribution channels have different strengths and weaknesses in terms of products and customer groups. With regard to products, for example, it is common to hire textile services for the handling of bed linen, because it is a rather elaborate process for a hotel, especially when it comes to operating the rotary iron. Since linen care can also be arranged through a laundry, wholesalers also remain an important distribution channel. Washroom services based on towel rolls represent a clear-cut textile services product because no well established alternatives exist. Work attire for the kitchen is often very individual and can therefore be procured through any of the distribution channels. From the perspective of customer groups, it must be remembered that restaurants are often small and managed as a family business. The family is more likely to use its own washing machine than an external service. In such cases, textile services are excluded from list of distribution channels. In other cases, it is common to use textile services for flatwork only. Catering companies on the other hand, prefer to have their work attire provided by a textile service, because they want their waitrons and delivery staff to be recognised easily and the clothing is part of the corporate image. It is too risky to allow staff to take responsibility for their own work attire. 120 5. Tex9le services as service providers 5.1 The compe>>on between distribu>on channels There are other reasons why textile services are not used as the only distribution channel, e.g.: - invitations to tender do not always include textile services - many hotels and restaurants let their staff take care of their own workwear and purchase directly from manufacturers or by mail order - many hotels and restaurants take care of their own laundering and therefore buy from wholesalers or other sources Share of individual distribution channels is unclear It is not easy to specify the market share of textile services and that of the competing distribution channels. Capturing the market size that is covered by the distribution channels is difficult enough. Statistics on production and foreign trade are the most reliable instrument for describing the supply of goods. In the EU it is also the most standardised tool, but even so it poses numerous problems. It is not possible, for example, to clearly define imports of manufactured goods as workwear or bed linen for the HORECA market. Neither has any further subdivision of distribution channels for the HORECA market been made yet. Chart 5.1-1 (Market position of textile services) illustrates the significance of distribution channels for the HORECA market in Europe. In some countries, the evaluation of the market position of textile services deviates in certain aspects. But in general, a dynamic view shows which distribution channels have become stronger and what the future prospects are. 121 5. Tex9le services as service providers 5.1 The compe>>on between distribu>on channels Online and mail order business on the increase As a distribution channel, the online and mail order business is clearly gaining in importance. Online offers are very flexible from a marketing point of view: price discounts and other campaigns can be arranged at very short notice and the existing range can be updated at any time. Promotions are possible as well. On the whole, this channel is suited for fast and flexible action or response. Its significance is currently rather small, but clearly on the rise. Wholesale trade has problems While we regard online trade as a constantly growing distribution channel in the HORECA market, the wholesale channel tends to be stagnating or even declining. Their main functions are financing and storage, which enable wholesalers to supply minor quantities of towels or bed linen for example, at short notice. But keeping stock becomes more difficult as the trend moves towards individually designed linen, and apart from that, textile services now also take care of financing. Thus the scope of action is decreasing for wholesalers. Added to that, today’s communication technology and instruments of logistics allow for very tight interlocking within the value creation chain, to the disadvantage of wholesale. The staunchest wholesale customers are hotels, restaurants and catering services, which continue to purchase their own textiles and either wash them in-house or send them to a laundry. In the medium to long term, this support will diminish, however, because textile services are not only a distribution channel that simply competes successfully. They also represent a new business model which organises textile procurement in entirely different ways, and in many respects it is more advantageous for the businesses of the HORECA market. 122 5.1. The compe99on between distribu9on channels Chart 5.1-‐1 Market posi>on of tex>le services Importance of distribution channels varies for different product categories Distribu9on channel Online/mail order Wholesale Retail Tex>le services Product group Direct Bed linen Towelling Table linen Kitchen cloths Workwear in the kitchen Workwear for waitrons Washroom products Very important Important Not so important 123 5. Tex9le services as service providers 5.2 The advantages of the tex>le services business model The advantages of textile services are embedded in the business model The starting point is the realisation that division of work is advantageous, because it creates room for specialisation. It follows that specialists are able to work better and more productively in their specific fields than those who do everything themselves. In modern terms, this means that companies outsource value creation processes which are not elementary for their business. Procurement of textiles is typically a supporting process, but for the accommodation business and gastronomy, it is not an inevitably essential value creation process. Outsourcing to a service provider results in strategic advantages and increased efficiency. Accordingly, the basic idea of textile services is to offer systematic textile procurement which supports the client’s business in a suitable manner, whilst the operational responsibility remains entirely with the service provider. Strategic advantages of outsourcing textile procurement The major strategic advantages of outsourcing textile procurements are: - ability to focus on central value creation processes which are crucial for the company’s success. This is empirically supported by a survey which we conducted in 2010 (Chart 5.2-1: Results of survey on the advantages of textile services). The main strategic advantages of focusing on the core business are: - simplification of purchasing - less capital commitments, because required financing of assets and floating capital decreases - concentration on further training, because training resources are no longer needed for laundry know how - improved response capability, because the company no longer has to take operation of a laundry and its staff into consideration. 124 5. Tex9le services as service providers 5.2 The advantages of the tex>le services business model Numerous efficiency gains Efficiency gains range from discontinuation of maintenance and repair costs for an in-house laundry to simpler accounting with regard to textile procurement. The summary headed “efficiency gains through textile services” shows how varied the arguments in favour of textile services can be. Three different aspects must be considered: 1) laundry management – advantages include the fact that no more investment and maintenance costs are incurred (Chart 5.2-2: Advantages in laundry management) 2) textile management – textile stocks no longer have to be financed and purchased (Chart 5.2-3: Advantages in textile management) 3) business management – less of a burden with regard to organisation, planning, accounting and financing (Chart 5.2-4: Advantages in business management) Whether the basic advantages exist in each concrete case should however be checked in respect of each individual company. Advantages will probably be more noticeable for a city hotel with 100 rooms, which is part of a brand, than for a 30 room hotel on a small island in the Mediterranean or on the North Sea Coast. 125 5.2 The advantages of the tex9le services business model Chart 5.2-‐1 Results of the survey on the advantages of tex>le services Concentra9on on the core business is seen as the most important advantage that tex9le services can offer to clients Advantages of tex>le services improved just-‐in-‐>me availability other concentra>on on core business superior product quality cost-‐benefit advantages Source: Böiger 2010 liquidity advantages 126 5.2 The advantages of the tex9le services business model Chart 5.2-‐2 Advantages in laundry management Area In-‐house laundry (HW) Tex9le services Room, building -‐ installa>on costs -‐ maintenance, renova>on -‐ cost of premises -‐ specialised in the laundry business -‐ generally lower costs than in-‐house laundry Machinery -‐ investment costs -‐ maintenance costs -‐ higher produc>vity -‐ shorter investment cycles -‐ lower costs per item than in-‐house laundry Staff -‐ staff is oHen versa>le -‐ know-‐how strongly >ed to certain staff -‐ speciialised staff -‐ high level of training and knowledge Logis9cs -‐ infrastructure and maintenance -‐ organisa>on -‐ exis>ng, specialised systems -‐ possibly higher transport costs Ecology -‐ processes in general are not always in tune with the latest developments -‐ shorter investment cycles allow for state of the art technology, therefore improved conserva>on of resources Standards and documenta9on -‐ know-‐how and infrastructure are oHen weak -‐ specialised infrastructure and organisa>on e.g. for hygiene standards 127 5.2 The advantages of the tex9le services business model Chart 5.2-‐3 Advantages in tex>le management Area In-‐house tex9le management Tex9le services Specific requirements -‐ knowledge and experience required -‐ some>mes specialisa>on is necessary -‐ customer advice service -‐ condi>ons at industrial laundries are taken into considera>on (increased life-‐cycles of tex>les) Installa9ons -‐ measurement and other changes require process organisa>on -‐ individual changes are part of the service -‐ rou>ne business Changes in staff -‐ work a[re has to be altered or new sets bought -‐ new ou€its are rou>ne, no addi>onal costs Losses -‐ new tex>les have to be bought to replace those that are lost (towels etc.) -‐ a regular, binding con>ngent is specified in the tex>le service contract Wear & tear, repairs -‐ repairs have to be arranged -‐ replacements have to be arranged -‐ part of the service Con9nuity of model -‐ the same model of a product is oHen only available for 2 – 3 years -‐ models are guaranteed for several years Logo -‐ internal organisa>on necessary -‐ part of the service 128 5.2 The advantages of the tex9le services business model Chart 5.2-‐4 Advantages in business management Area In-‐house management Tex9le services Budget decisions -‐ investment decisions for machines, infrastructure and tex>les -‐ running costs -‐ investment decisions are unnecessary Stock -‐ tex>les -‐ equipment, spare parts -‐ client does not need floa>ng capital Investment capital -‐ machinery, buildings in balance sheet, asset ledger, calcula>on -‐ deprecia>on is not a balance sheet item for the client Capital commitment -‐ high capital investment for facili>es and stocks -‐ lower levels of equipment and stock improve the balance sheet for the client Liquidity -‐ fluctua>ng burden on liquidity -‐ -‐ at >mes, need for large amounts of cash -‐ amount according to the contract, easy to plan Organisa9on -‐ laundry and tex>le management require separate organisa>on of structure and processes -‐ tex>le services make lean, client-‐oriented organisa>on possible Planning safety -‐ in-‐house horizon; other problems oHen take precedence -‐ typically a 3-‐year contract 129 6. Developments in purchasing 6.1 General trends In view of the tough compe>>on in the hospitality business, purchasing is extremely important. The founda>on for good overall performance in terms of the client and profitability, is established through purchasing. When a company decides to leave tex>le procurement to a tex>le service, a contract term can be chosen, which coincides with the term of the lease contract, taking care of tex>le procurement for the dura>on of the lease term. The crucial building blocks of the contract have to be evaluated and recorded In par>cular, this applies to: - choice of tex>les: they have to be durable and underline the design of the hotel/restaurant - number of sets: as small as possible to keep stocks low - frequency of collec>on and delivery: availability must be ensured at all >mes, despite low stocks - place of delivery: floor, linen room etc. – the closer to the place of demand that the tex>le service delivers, the more the burden on the client is eased - flexibility regarding volume and >me of delivery - prices, terms and condi>ons Concentra9on, centralisa9on and coopera9ve groups increase the bargaining power of the client The complexity of poten>al contracts varies, depending on size. Tex>le services are used by small independent hotels and restaurants as well as by hotel chains and catering companies engaged in community catering. And the tex>le services sector is flexible enough to deal with rather small jobs too. Contracts to be nego>ated therefore range from a rela>vely simple service contract signed between the owner of a guesthouse and the tex>le service’s sales representa>ve to mul>-‐level documents nego>ated with housekeeping, central purchasing and business management. 130 6. Developments in purchasing 6.1 General trends With regard to large volumes, i.e. enquiries from large clients, it is increasingly common to invite tenders or at least to ask for quotes from compe>ng companies, which can then be weighed up against one another. The number of tenders and complex contract nego>a>ons is rising, because chain hotels are gaining strength, nego>a>on of basic contracts is being done on a central level and more and more independent hotels and restaurants are organising their procurement through purchasing companies and coopera>ve groups. As a result, nego>a>ons on terms and condi>ons are becoming tougher. Tex9le selec9on between client preferences and produc9on pressures As a maier of principle, tex>le services must combine client preferences with their own resources. This is a challenge in a highly compe>>ve market and not only applies to prices but also to the en>re service package. Tex>le selec>on already poses a problem because many hotels and restaurants want their tex>les to differ from those of the compe>>on, or they have specific ideas of the type of tex>les that match their style. For tex>le services, however, it would be the easiest if the client was simply prepared to accept tex>les from a standard pool. In this respect it is important to come up with a solu>on that is acceptable to both par>es. For the tex>le service, this means dealing with a number of tex>le suppliers selected by the client. Considering the details of purchasing and process organisa>on, the structure of tex>le procurement is not ideal for tex>le services (see Böiger 2007, pp. 156 ). But the selec>on of tex>les is client-‐oriented, bearing in mind that on the side of the tex>le service provider, certain requirements are indispensable. These mainly include tex>le proper>es with regard to the care process, which are summed up as ‘suitable for leasing’ or ‘suitable for industrial laundering’. 131 6. Developments in purchasing 6.1 General trends Suitability for leasing becomes the most important func9onal criterion As tex>le care is increasingly penetrated by laundry and tex>le technology, func>onal criteria have been developed, which ensure durability of products for at least 60 washing cycles. Suppliers who want to sell hotel linen through tex>le services can no longer ignore these criteria. But with regard to direct sales, housekeepers are also beginning to appreciate enhanced care proper>es in bed linen more and more. In the countries where tex>le services play a significant role, these proper>es are even more important. Suppliers from northern European countries oHen include details about suitability for leasing on the labels of their products. This prac>ce is less common in other countries. Intex demands on flatwork The most detailed func>onal requirements for flatwork suitable for leasing were compiled by a working group of Intex, a German associa>on. Requirements are specified for various product categories, including bed linen, fiied sheets and towels. These criteria are not always taken fully into account in the actual purchasing process, and purchasers from outside the German-‐speaking area are not as aware of them, but even so they are very helpful for the tex>le supply chain, for example, in the development of products suitable for laundering. ETSA demands on work abre In the same way, an ETSA working group compiled minimum requirements for work a[re suitable for leasing on a European level. Recommenda>ons were submiied on: (1) fabrics (2) fasteners (3) design and construc>on 132 6. Developments in purchasing 6.1 General trends The Hohenstein Ins9tute presents the quality label ‘suitable for leasing’ Standards for the suitability for leasing have also been developed by the Hohenstein Ins>tute. The quality label, to be awarded aHer successful tes>ng of tex>les, will be a transparent summary for tex>le procurement, which indicates that the material used is suitable for industrial laundering. The Hohenstein quality label is available for seven product groups, including work a[re, bed linen, table linen and towelling goods. The various requirements and standards are useful in the following ways: - agents purchasing for tex>le services are able to rely on the suitability of appropriately labelled tex>les - clear targets are set for tex>le developers - decision makers in the hotels can refer to guidelines on the specifica>on of their tex>les The responsibility of tex9le suppliers Highly qualified tex>le suppliers bear the differen>a>on requests of the hospitality business and the well-‐being of guests in mind, as well as being aware of the technical problems that tex>le services face. They ensure that tex>les are suitable for leasing and also that they meet their clients’ demands in the best possible way. 133 6. Developments in purchasing 6.2 Sustainable tex>le services The increasing importance that sustainable economic ac>vity has for the guests and hoteliers in the HORECA market is illustrated in Chapter 4.2.3 (Trends which determine the future of the accommoda>on business). This is also expressed in calls on tex>le service providers to operate on an economically sustainable basis. Furthermore, it must be taken into considera>on that tex>le service providers and their supply chain are highly compe>>ve, and innova>ons in terms of sustainability are seen as a way of improving the market posi>on. Therefore, the dynamics for innova>ons which boost sustainability do not originate at the source of demand alone, but are also vigorously promoted by the suppliers. In their quest for innova>on and sustainability, tex>le services are strongly supported by suppliers from the machinery, chemical and tex>le industry sectors. Ac9ve policies of associa9on help to spread corporate social responsibility (CSR) Endeavours towards sustainability are taken up on associa>on level and promoted in the companies and the supply chain. ETSA joined the United Na>ons Global Compact and submiied its third progress report in spring 2012. Na>onal associa>ons of the tex>le care and procurement sectors have also joined the UN Global Compact. The German Intex associa>on, which has its own CSR working group, conducted a comprehensive CSR campaign in 2011, which was well received by clients, members and suppliers. One of the most important findings was that CSR can only be successful if it includes the en>re tex>le supply chain. What is the use of energy savings in the laundry process if, for example, the coion contained in the tex>les has to be categorised as highly cri>cal, from both the ecological and the social aspect. Tradi>onal methods of growing coion require a lot more water and pes>cides or gene>c changes are undertaken. This has led to a number of alterna>ve systems which produce coion by methods which meet improved ecological standards (Chart 5.2.1-‐1: Comparison of ecological and social coion ini>a>ves). Ecological and social efforts can now be no>ced throughout the en>re tex>le chain. 134 6. Developments in purchasing 6.2 Sustainable tex>le services In the interests of consistency, HORECA clients need to regard sustainability on two levels: 1) the work a[re and flatwork provided by the tex>le service provider 2) the tex>le service provider and its system of opera>on Standards have been set in order to make the ecological and social background of products transparent. This helps clients with assessments, but there are numerous conflic>ng standards. Since their content and scope differs, buyers and clients have to find out for themselves what the standards displayed on the various labels entail. For a comparison of some of the important standards for tex>le produc>on, see Chart 5.2.1-‐2: Ecological standards at a glance. The green hotel room – FAIRTRADE products from organic cocon An exemplary concept for sustainable flatwork is offered by Dibella, a company based on the border between Germany and the Netherlands. Its hospitality collec>on, “Breeze”, consists of towels, bed linen and table linen made from coion that is sourced from controlled biological cul>va>on. The products are cer>fied according to the Global Organic Tex>le Standard (GOTS) and the FAIRTRADE principles. The core of the FAIRTRADE idea is a fair minimum price as well as s>pulated environmental and social standards in order to improve the standard of living of the producers. Suppliers have to undergo inspec>ons at regular intervals. The Breeze range is for people who also place emphasis on eco-‐social responsibility when staying at a hotel. Dibella is a member of the UN Global Compact and has published its first progress report in accordance with the ISO 26000 norm. 135 6. Developments in purchasing 6.2 Sustainable tex>le services No eco-‐social standards for tex9le services Tex>le services may use sustainable tex>les, but the standards that apply to those tex>les say nothing about the eco-‐social quality of tex>le services as a produc>on process. Training modules on sustainability in the laundry and in cleaning do exist, but no verifiable standards have been set for laundries or for transport logis>cs. Management systems and progress reports Many companies in the tex>le services sector are nevertheless very ac>ve with regards to opera>onal improvements to reduce the use of resources and boost social responsibility. Presently there are two main ways to communicate this to the market and within the company: cer>fied management systems and membership of the UN Global Compact and the issuing of the required annual progress reports. As for management systems, the environmental management system according to ISO 14001 is the most popular. Eco-‐Audit und Management System (EMAS), introduced by the EU as part of its environmental policy, is less commonly used. Systems according to ISO 14001 are designed as a permanent process of improvement, which in due course should lead to a pre-‐determined environmental goal. ISO 14001 is compa>ble with a number of other quality and environmental norms, e.g. IS0 9001 as a management system and norm for the compila>on of eco-‐ balances and for the evalua>on of environmental performance. Regarding the use of management systems, the tex>le services sector shows the largest growth rates for the UN Global Compact and the progress reports that are a condi>on of membership. An advantage of the UN Global Compact is that it is very openly phrased and also contains social components. The annual progress reports, which do not have to be cer>fied, are the central instrument for improvement (see Chart 5.2.1-‐3 UN Global Compact). 136 6.2 Sustainable tex9le services Chart 6.2-‐1 Outline of ecological standards OE Standards GOTS FAIRTRADE GRS SCS Recycled BLUESIGN none Raw material Organic coion Organic fibres Fair price Recycled materials Recycled materials Tracking system Transac>on cer>ficates Transac>on cer>ficates Documenta>on of status monitoring Transac>on cer>ficates Auditable status monitoring Ecologically compa9ble processes Socially compa9ble processes Recognised labelling* none Use of chemicals and water, environmental strategy none ILO standards “Contains x% organic coion” *with standard-‐ specific control criteria “ORGANIC” or “Contains x% organic -‐based raw materials“ none Water consump>on, environmental strategy none none ILO standards none FAIRTRADE cer>fica>on logo “Contains recycled raw materials; x% at produc>on; x% recyclable end product” “Contains x% recycled materials, y% at produc>on and z% recyclable end product“ Database system Consump>on of water, energy and chemicals none “Bluesign® product“ or “Bluesign® approved product“ LOGOS Source: Hellmann ISO 26000 137 6.2 Sustainable tex9le services Chart 6.2-‐2 Comparison of ecological standards regarding coion ORGANIC cocon Ban on chemical and synthe9c pes9cides Total ban FAIRTRADE cocon Ban on selected substances Cocon from Africa Ban on selected substances BETTER COTTON Ini9a9ve Ban on selected substances Stockholm Conven9on: POPs harmful substances, not easily degradable banned banned banned Rocerdam Conven9on: PIC List of chemicals for import control banned banned banned WHO Class 1: extreme, highly dangerous banned banned permiied banned banned banned Banned on principle 18 years (in line with ILO conven>on 138) 16 years banned banned Par9cipa9ng countries 23 9 5 9 Farmers (thousand = K) 275 K/ 2009 85 K/ 2009 171 K/ 2009 65 K/ 2010 Produc9on in tons/ha 24,697 t / 461,000 ha 28,300 t / 75,000 ha 49,947 t / 198,2100 ha 10,000 t / 241,200 ha Endosulphane Worker protec9on: minimum age for applying chemical pes9cides Gene9cally modified cocon Moratorium un>l 2012 banned gradual phase-‐out gradual phase-‐out gradual phase-‐out 18 years (in line with ILO conven>on 138) permiied 138 6.2 Sustainable tex9le services Chart 6.2-‐3 UN Global Compact UN Global Compact Global Compact is a pact which companies and/or associa>ons conclude with the UN in order to support social and ecological aspects of economic development. Any company can join, and as a member, undertakes to adhere to minimum ecological and social standards. For many members, par>cipa>on in the UN Global Compact is the basis for their corporate social responsibility (CSR). Members are obliged to issue an annual progress report in which they describe the improvements they have achieved in terms of the 10 principles of conduct. MINIMUM STANDARDS -‐ UN Global Compact The 10 principles of conduct 1. Respect interna9onally proclaimed human rights, adhere to and promote them within your sphere of influence 2. Ensure that you are not involved in the viola9on of human rights 3. Respect the rights of employees, the right to trade union ac9vity and the right to collec9ve nego9a9ons 4. Exclude all forms of indented or forced labour 5. Abolish child labour and do not support child labour 6. Exclude discrimina9on in the workplace and within your company 7. Take precau9ons against endangering of the environment 8. Start ini9a9ves to promote increased environmental awareness 9. Encourage the development and dissemina9on of eco-‐friendly technologies 10. Stand up against corrup9on in any form – including extor9on and bribery 139 7. Requirements, opportuni9es and risks on the product level 7.1 Bedding 140 7. Requirements, opportuni9es and risks on the product level 7.1 Bedding The superior significance of bedding For travellers, the bed is the most important feature of a hotel room (Chart 7.1-‐1: Significance of the bed for guests). Most recently, this was confirmed by a study conducted by the Fraunhofer Ins>tute (Borkmann 2010). Beds are required to give a good night’s sleep and a feeling of comfort when falling asleep and waking up. The different components that make up the bed, from the mairess to the bedding, play a central role in this, because they contribute decisively to the feeling of well-‐being in bed. Well-‐being is not so much a ques>on of aesthe>cs, but rather of essen>al func>ons such as the firmness of the mairess or the sleep climate. Bedding as a compe99ve edge For hotels and guesthouses, beds are an important component for impressing guests. The culture of spending the night away from home is characterised by the features of the bed, and should be an integral part of the whole concept of an accommoda>on business. Wellness hotels, high-‐end city hotels, conference hotels, budget hotels, country inns or golf hotels – they all need to present their beds in a way that matches their image. But the hotel category, indicated by the number of stars, for example, cannot simply be equated with the quality of beds. We know of 5-‐star hotels where the beds are no beier equipped than those of certain budget hotels. This is the result of different strategic concepts: 5-‐star hotels try to implement excep>onal quality in many areas, while newer budget hotels concentrate on a few areas in which they aim to make an impression on the guest. Modern budget hotels emphasise the “stay-‐the-‐night“ experience Whereas the first genera>on of economy hotels tended to resemble youth hostels, today’s budget hotels furnish their rooms adequately: flat screen TV, Wi-‐Fi, good bed linen and towels, good mairesses – i.e. comfortable beds – and appealing design. Guests should enjoy their rooms. By contrast, costs are saved in recep>on and the restaurant. No uniformed bell boys or doormen, a breakfast room without table linen instead of a restaurant, washrooms which are spotless, but not luxurious. 141 7. Requirements, opportuni9es and risks on the product level 7.1 Bedding This meets the requirements of guests who consider the room and the bathroom -‐ the core areas of accommoda>on and personal comfort – to be the top priority for crea>ng a feeling of well-‐being and for making the decision to book. The “Übernachtung 2.0” (Overnight Stay) study conducted by the Fraunhofer Ins>tute confirms these preferences (Chart 7.1-‐2: Importance of bedding). Guests’ expecta>ons with regard to bedding can also be illustrated as a typecast (Chart 7.1-‐3: Guests’ expecta>ons with regard to bedding). Differen9a9on criteria for bed linen In different parts of Europe, there are differing no>ons of what a good bed should look like and consist of. We will look at bed linen and mairess covers only. Even hotel bed linen comes in different different shapes and sizes in Italy and large parts of Belgium than what is usual in Austria and Germany. The different tradi>ons that exist in the various countries are part of the reason for this. 100% cocon and the feeling of well-‐being in bed OHen, the opinion prevails in hotels, that guests expect high-‐quality bed linen to contain 100% coion, not only with regard to the hap>c aspect, but also because coion is a natural fibre. Using coion-‐polyester blends is mainly accepted due to the lower cost and/or by accommoda>on businesses that are not ranked in the high-‐end categories. Pu[ng it simply: bed linen made of coion is of high-‐quality, and even more so if it is of long-‐staple coion, e.g. Egyp>an coion. Polyester, however, has a number of advantages which include lower acquisi>on costs and lower laundry costs because polyester dries fast and is easy to finish. Bed linen made of blended fabrics is also more durable. These advantages are why fabric blends are commonly used for bed linen. They are preferred by accommoda>on businesses and tex>le services, who assume that their guests are less par>cular about coion, or for whom the cost aspect has priority. 142 7. Requirements, opportuni9es and risks on the product level 7.1 Bedding The company logo as a means of branding and brand promise It is certainly perceived as an airibute of quality, when bed linen bears the hotel’s logo. The logo makes the bed linen part of the hotel’s iden>ty and its image is reflected in the choice of bed linen. For the hotel, on the other hand, this is another opportunity to boost their own brand and entrench it more firmly in the clients’ conscience. The disadvantage is that branded linens cannot be used for pooling. Pooled goods as the most flexible and economical form of supply Pooled goods are tex>les which a tex>le service provider does not offer to a specific hotel, but rather to several accommoda>on businesses. Pooled items look exactly the same. Hotels have the guarantee that the same number and types of items will be delivered to them aHer laundering, but they do not receive the exact same items that were collected for laundering. Pooled goods have considerable advantages for many hotels, because their availability is easier to control and laundry costs are no>ceably lower than is the case for individual designs. Laundry costs are lower, because laundries are able to buy larger produc>on lots, formulas and processes are a maier of rou>ne and possible replacements can be arranged extremely quickly. Acquisi>on costs are also more favourable because of larger quan>>es. Individual design creates differen9a9on but is not suitable for pooling Many hotels, however, do not want to use exchangeable pooled goods. Even though airac>ve quality is available for pooled goods, it is not an op>on if bed linen is to be part of the compe>>ve edge. In any case, no pooling offers in the high-‐quality segment exist, e.g. brocade and damask linens made of combed coion with 98 threads per square metre and a weight of only 120 g/square metre. Hotels that use individual designs or superior product quality regard these features as being more significant than the cost advantages of pooled goods. 143 7. Requirements, opportuni9es and risks on the product level 7.1 Bedding Macress protec9on increases comfort and reduces cost Mairess protectors are seen as increasingly important and may take the form of a classical molton pad or an encasing. The addi>onal tex>le buffer between mairess and sheet increases the guest’s comfort by adding support to his back and contribu>ng to a healthy and beneficial bed climate. Encasings provide protec>on against dust mite allergies. Since allergies are on the rise and the age of guests is increasing, a growing market poten>al for encasings can be expected (Chart 7.1-‐4: Digression: An>allergenic mairess protec>on). The advantages for the accommoda>on business are not only the increased comfort of the guests, but also the fact that mairesses are protected against soiling, moisture and sweat. Protec>on no>ceably increases the life-‐span of mairesses. AHer the bed itself, the mairess is the most expensive part of a bed. Demands on bed linen that is suitable for leasing For tex>le services, it is impera>ve that the bed linen they work with is suitable for industrial laundering. Technical characteris>cs as compiled by an Intex working group as well as by the Hohenstein Ins>tute, are essen>al. Specifica>ons have been defined for physical proper>es such as pilling, changes in size, maximum pull-‐out force and colour proper>es such as fastness in terms of light, sweat, washing and rubbing. The Intex requirements are illustrated in Chart 7.1-‐5 (Intex demands in respect of bed linen). Opportuni9es and risks for tex9le service providers with regard to bedding In our opinion, bed linen and other bedding products offer more opportuni>es than risks for tex>le service providers. The market is expanding. Trend forecasts for individual products are illustrated in Chart 7.1-‐6 (Growth in bedding by product). 144 7. Requirements, opportuni9es and risks on the product level 7.1 Bedding Growth poten9al of bedding 1) Rising demand Regarding quan>ty, medium-‐term increase in travel will result in a higher demand for bed linen and other bedding products. Unfavourable economic condi>ons may delay growth in countries like Italy and Belgium. 2) Upgrading of bedding As a result of the expansion strategy implemented in the budget hotel category, bedding is currently being upgraded. The room and the bed are of more significance than the pres>gious character of the hotel as a whole. This will have a posi>ve impact on bedding throughout the accommoda>on market and will also include addi>onal products such as bed runners, mairess protectors and bedside rugs. 3) Guided support for individual hotel ranges If hotels wish to have their own bed linen instead of pooled goods, tex>le services should support them and cooperate with suppliers who understand the problems. This furthers the hotel’s target of dis>nguishing itself, and related costs are kept low. Hotel-‐specific products and designs usually result in more costs because they cannot be pooled. In most cases they also mean smaller batch sizes and a higher predisposi>on for complaints. Cost control requires close coopera>on with suppliers who offer a small range of quali>es but a large range of mix and match products. Limi>ng the number of basic quali>es reduces the level of diversity with regard to washing instruc>ons. 145 7. Requirements, opportuni9es and risks on the product level 7.1 Bedding 4) Blended fabrics with core yarns produce a cocon feeling Using yarns with a polyester core and a coion sheath offers an innova>ve and interes>ng compromise between guests’ expecta>ons and economic pressures, at least in terms of the hap>c aspect. Since the polyester is the core of the yarn, and the coion is spun around it, it creates the feel-‐good sensa>on of coion for the guest, whilst at the same >me, ensuring a considerable improvement of both the laundering proper>es and the cost of the product. Laundry advantages include less pilling, enhanced stability of shape and improved fade-‐resistance in respect of chlorine and temperatures of 95 degrees Celsius. This type of core yarn, offered by Beirholms Vaeverier A/S for example, displays the use of polyester in bed linen in an en>rely different light. 5) Sleeping with a clear conscience: sustainable bed linen Eco-‐socially produced bed linen is now available from a number of suppliers. Sustainability is interpreted in different ways, however, from products which comply with the Oekotex Standard to companies which are ISO 14001 or ISO 20001 cer>fied and those which in addi>on are cer>fied according to the GOTS and Fairtrade standards. The interpreta>on of sustainability against the background of these cer>fica>ons, labels and ini>a>ves has to be checked individually from case to case. In any event, the increasing awareness of the subject opens up good opportuni>es for doing business with the accommoda>on sector (see Chapter 6.2: Sustainability). (6) Long-‐term development poten9als Bed linen and mairess protectors will be developed further and hotels will also benefit this. Some of these advanced products are already available, but have not yet been adopted by the accommoda>on sector. 146 7. Requirements, opportuni9es and risks on the product level 7.1 Bedding Examples are: - construc>ons and equipment which boost hygiene - an>-‐allergenic construc>ons and equipment - dirt-‐resistant construc>ons and equipment - non-‐iron bed linen - integrated quilt and cover No product-‐related risks in the hotel bedding market The various growth impulses for bedding in the accommoda>on sector are not countered by any major risks resul>ng from specific quali>es of bedding as such. The main risks are general market risks such as economic condi>ons, travel behaviour, prices of raw materials etc. Growth prospects for various items of hotel bedding are illustrated in Chart 7.1-‐6 (Growth in bedding by product). 147 7.1 Bedding Chart 7.1-‐1 Significance of the bed for guests The bed is the most important feature of the hotel room Borkmann 2010 148 7.1 Bedding Chart 7.1-‐2 Importance of bedding The macress and bed linen are par9cularly important when it comes to beds Borkmann 2010 149 7.1 Bedding Chart 7.1-‐3 Guests’ expecta>ons regarding bedding Guests’ expecta9ons regarding bed and bedding differ considerably Guests’ expecta9ons regarding bedding selected criteria not important Mairess cover x Sustainable products Coion content of linen Fabric quality x Design/colour x Company logo x Supplier brand x Number/size of pillows Size/weight of quilts Crease-‐free sheets Ornamental runner/bedspread x Scaier cushions x Bedside rug x important A x x A A x x x A A very important A A A A A A A A low expecta>on x high expecta>on A 150 7.1 Bedding Chart 7.1-‐4 Digression: An>allergenic mairess protec>on Encasing to the benefit of allergy sufferers Excrement of dust mites find their way into the respiratory tract at night in the form of fine dust v ENCASINGS are covers for macresses, quilts and pillows Developed for people who are allergic to dust mites - allergens are sealed in the encasing - flakes of dead skin (main food of the mites) cannot enter the encasing v Shielding the BED Dust mites live in beds, wall-‐to-‐wall carpets and curtains Source: BNP Bedcare 2010 Ideal condi9ons for dust mites: - Temperature under the quilt ~ 35° - Room temperature set too high - Humidity level too high 151 7.1 Bedding Chart 7.1-‐5a Demands in respect of bed linen 152 7.1 Bedding Chart 7.1-‐5b Demands in respect of bed linen 153 7.1 Bedding Chart 7.1-‐5c Demands in respect of bed linen Basis: Intex 154 7.1 Bedding Chart 7.1-‐6 Growth in bedding by product Bedding is a growth market for tex9le service providers Product 2013 2017 Bed linen Sheets Runner Bedspread Bedside rug Macress protec9on 155 7. Requirements, opportuni9es and risks on the product level 7.2 Bathroom tex>les Foto: Buddemeyer 156 7. Requirements, opportuni9es and risks on the product level 7.2 Bathroom tex>les The bathroom plays a decisive role in the guest’s sense of well-‐being and overall experience of a hotel stay. Tex>les are an important part of that. Since guests’ expecta>ons of towelling goods differ from the requirements of accommoda>on businesses (see Chart 5.2.3-‐1: Guests’ expecta>ons of bathroom tex>les), guests’ expecta>ons, compe>>on and consistency with the hotel’s style as a whole have to be harmonised. The experience of being pampered is an important feature, especially in the case of wellness hotels, because it is the main reason for staying there. Tex>les in the en suite bathroom, for the sauna, pool, gym and treatment area therefore become a core element of the each individuals feeling of well-‐being. Tex>les for the wellness segment are not an explicit part of this study, however. With regards to bathroom tex>les, it should once again be kept in mind that the number of stars awarded to a hotel does not necessarily allow for concrete conclusions with regard to the quality of tex>les (see Chapter 5.2.2: Bedding) Differing guest expecta9ons and bathroom tex9les The main differences between guest expecta>ons and hotel requirements revolve around the quality and the comprehensive quan>ty of the towelling goods made available. Volume is an important criterion for quality. For towelling, a volume of up to 700 g/m2 is required to impart a luxurious feeling. Suitability for leasing, however is ques>onable, due to the >me needed for drying, but handling on the whole is also much more difficult than for towelling with a volume of 550 g/m2. Regarding diversity, apart from bath sheets and hand towels, the complete range of towelling is an essen>al characteris>c of sophis>cated and luxurious bathrooms. The complete range includes bath mats, face cloths or miis, towelling robes , slippers and possibly a sauna towel. 100% cocon dominates Coion is more dominant in towelling goods than in bed linen. Differen>a>on in towelling is mainly a maier of volume. It starts at about 380 g/m2 for moderate expecta>ons and ends at about 550 g/m2 if suitability for leasing is taken into considera>on. 157 7. Requirements, opportuni9es and risks on the product level 7.2 Bathroom tex>les Modal increases sustainability, brightness of colour and fluffiness The use of tencel in towelling fabrics increases sustainability because, among many other aspects, the life cycle assessment of tencel fibres is more favourable than that of ordinary coion (Lenzing 2011). The proper>es of this fibre also make it soHer to the touch and more colour intensive, i.e. increased brightness of colour. The soHness becomes most no>ceable aHer a high number of washing cycles, at which >me the coion pile can no longer be opened sufficiently by tumble drying. A disadvantage however, is that modal pile does not stand as well as coion does. This is mainly seen in new towels that have not been washed oHen. Own logo for iden9fica9on and preven9on Many hotels want their logo or their own iden>fiable design on towelling goods even more than on bed linen. This is not only a maier of branding and customer connec>vity but it is also very much about preven>ng theH. Losses of hand towels and face cloths are considerable. Clear marking can help to reduce such losses, but this does not apply generally. The logos of luxury hotels increase the souvenir value of items par>cularly, and is a major cause for the theH of branded items. Tex9le management by design Large hotels have different towels for different areas, e.g. for the swimming pool or the rooms, for Wing A or Wing B. Pool towels usually have different colours and dimensions. In this case, the main reason for differen>a>on is simplifica>on of tex>le management rather than impressing guests with addi>onal variety. Planning and control of tex>le supplies becomes easier through alloca>on by different business units per design. 158 7. Requirements, opportuni9es and risks on the product level 7.2 Bathroom tex>les Pooled goods and individual design Common towelling goods like white coion-‐based towels with a density of 430 g/m2 are typical pooling products. Their use can be shared by several hotels, because the important factor is that the goods meet the standard of quality agreed upon and that they are available at the right >me and at the right place. We have already elaborated on the numerous advantages of pooled goods (see Chapter 5.2.2: Bedding). Apart from the individuality that a hotel wishes to express with its own towels, preven>on of theH and loss, is another important reason for branded towelling goods – as opposed to bed linen. Therefore, an addi>onal financial reason exists, when considering pooled goods or branded bathroom tex>les. Requirements for towelling goods that are suitable for leasing Towelling goods selected by tex>le services have to be suitable for industrial laundering. This means that a number of technical features are required, which ensure at least for the term of the contract, that the towelling con>nues to look good and serves its purpose. Such requirements have been defined by an intex working group as well as by the Hohenstein Ins>tute. They refer, for example, to stability in terms of -‐ ra>o of pile to base fabric -‐ fabric weight (g/m2) -‐ loop -‐ net/soak >mes While the requirements compiled by intex refer to the fabric, those of the Hohenstein Ins>tute also include manufacturing. The Hohenstein requirements are illustrated in Chart 7.2-‐2 (Requirements for towelling goods). 159 7. Requirements, opportuni9es and risks on the product level 7.2 Bathroom tex>les Growth poten9al of towelling goods 1) Rising demand Quan>ta>vely, the increase in the number of arrivals will result in a higher demand for towelling goods. Growth may be delayed by unfavourable economic condi>ons in some countries. 2) Upgrading of bathroom tex9les Increasing importance of the bedroom and bathroom area for the overall hotel experience, which is ac>vely promoted by budget hotels, has a posi>ve impact on bathroom tex>les as a whole. 3) Health and wellness trend The posi>ve trend experienced by health and wellness hotels will con>nue, because it is supported by the demographic development and the growing popularity of hotel stays that boost health and physical fitness. There is a very high and diverse demand for towelling goods from hotels in this market segment. Sauna towels and towelling robes in par>cular will benefit from this. 4) Support for individual hotel ranges Even though white towels are par>cularly suitable as pooled goods, there are important reasons, as explained earlier, why hotels prefer towels with an individual design – especially their own logo. The addi>onal costs, by comparison to pooled goods, can be reduced considerably if ranges are put together cleverly. Coopera>on with the supplier chain is essen>al for achieving this. 160 7. Requirements, opportuni9es and risks on the product level 7.2 Bathroom tex>les 5) Pampering the body with a clear conscience Towelling goods which are produced and condi>oned in a sustainable manner are in line with today’s system of values and their market share will therefore increase. The exact meaning of sustainability in this context is s>ll under discussion (see Chapter 6.2: Sustainability). (6) Long-‐term development poten9al Towelling goods are experiencing an interes>ng development phase at present. The wellness trend is a driving factor because towels and robes for sauna and treatment use are designed with many different func>ons. One example is the towel with one side for drying oneself and the reverse side for si[ng on in a sauna. Another example is the towelling robe by Outlast, made of phase change material, which regulates temperature changes between sauna sessions. No product-‐related risks in the towelling goods market The accommoda>on sector’s demand for towelling goods is not affected by specific product-‐related opportuni>es and risks. Domina>ng factors for market expansion are the number of arrivals, general market risks and the ranges selected by the hotels. Growth prospects for various items of bathroom tex>les are illustrated in Chart 7.2-‐3 (Development of demand in respect of bathroom tex>les). 161 7.2 Bathroom tex9les Chart 7.2-‐1 Guests’ expecta>ons in respect of bathroom tex>les Towelling goods are important for the guest’s feeling of well-‐being Guests’ expecta9ons of tex9les selected criteria Bath sheet Hand towel Facecloth Bath mat Bathrobe Sustainable products Cocon content Volume (g/sqm) Design/colour Company logo Supplier brand Slippers Sauna towel low expecta>on high expecta>on not important x x x x x x x x important x x A x x x A A A A very important A A A A A A A A x A 162 7.2 Bathroom tex9les Chart 7.2-‐2a Demands in respect of towelling goods Hohenstein quality standard 709 for towelling goods Source: Hohenstein 163 7.2 Bathroom tex9les Chart 7.2-‐2b Demands of towelling goods Hohenstein quality standard 709 for towelling goods Source: Hohenstein 164 7.2 Bathroom tex9les Chart 7.2-‐3 Development of demand in bathroom tex>les Demand for towelling goods will develop favourably. Short-‐term growth will be slightly weaker than medium-‐term growth. Product 2013 2017 Bath sheet Hand towel Facecloth Bath mat Bathrobe Slippers Sauna towel 165 7. Requirements, opportuni9es and risks on the product level 7.3 Table linen www.dekora>on.de 166 7. Requirements, opportuni9es and risks on the product level 7.3 Table linen Table linen is mainly used by restaurants, cafés and catering services. With regard to the guests‘ experience, there is usually an addi>onal social dimension. A neat, airac>ve ambience doesn‘t affect you alone – when ea>ng out with family, friends, business partners or colleagues, it is a communal experience. Factors such as pres>ge also play a role. Hotels, restaurants and catering services need to be able to reflect this. A fes>ve table set for the jubilee celebra>on of a well-‐known company will certainly look different from an ordinary table in a nursing home restaurant or an average pizzeria. Apart from its decora>ve role, table linen has an important protec>ve func>on. Soiling of tablecloths is reduced by place sets or runners. Sets and runners may replace tablecloths altogether if the clientele and eateries are less sophis>cated. In some countries i.e. Italy, paper tablecloths are being used more oHen. Table linen is the quality statement of an eatery or event The use of table linen, in contrast to bathroom fabrics and bed linen, usually is an expression of a company’s image. Mixing different standards, e.g. self-‐service with opulent table linen, is not a common business model. Accordingly, breakfast restaurants of budget hotels use table linen sparingly. It is quite usual that guests carry their breakfast selec>on from the buffet to their table on a tray with a paper placemat and paper napkins. In these cases, the breakfast room is organised along the lines of methodical community catering. Breakfast, however, is not part of the core business of budget hotels – as opposed to independent restaurants. Different levels of demands on table linen are s>pulated in Chart 5.2.4-‐1 (Demands on table linen). 167 7. Requirements, opportuni9es and risks on the product level 7.3 Table linen Differing guest expecta>ons and company images can be met par>cularly well with table linen. Opulence is the most important element when decora>ng a table with linens. Cocon less important Since table linen does not come into direct contact with the skin – except for the hands – coion is not expected or demanded as much as is the case with bed linen and bathroom tex>les. Two-‐ply damask and jacquard coion fabrics share joint first place as the top products. Mercerised yarns are important for a lustrous appearance. But polyester coion blends are more commonly used because they are easier to clean and the costs of condi>oning are clearly lower. Experts see the four-‐sided narrow seam as an expression of high quality. Strong role of colour and design A properly set table is an important element in any restaurant. Besides white, which is the classical colour in table linen, other colours and designs are oHen chosen. Table linen can also be selected to match or underline elements of the furnishings, making it part of interior decora>on. It may reflect decora>ng trends and thereby help to airact the restaurant’s target clientele. Logos in the high-‐end segment Brands, logos and names are only important in upmarket gastronomy, including hotels and cruise liners. 168 7. Requirements, opportuni9es and risks on the product level 7.3 Table linen Varying table sizes make pooling more difficult Most table linen is white and made from a polyester coion blend. This is actually a perfect basis for pooling. But this is countered by the fact that tables in hotels, restaurants and cafés come in many different shapes and sizes. Tex>le services have to offer a wide range of table linen sizes, which makes pooling considerably more difficult. Differences in care requirements In contrast to bed linen and bathroom tex>les, the tex>le industry offers bed linen with different care requirements to hotels and restaurants. There are stain-‐resistant materials (Teflon) and iron-‐free fabrics. Requirements for the leasing suitability of table linen Intex has also drawn up requirements for table linen fabrics. The Hohenstein Ins>tute has added criteria for ready-‐ made ar>cles (Chart 5.2.4-‐2: Criteria for leasing suitability). The focus is on checking fabric borders and seams aHer a number of washing cycles, as well as colour fastness, loss of shape and stability of dimensions. Special products for events and catering services Table linen is much in demand for events, from conferences in large hotels to company func>ons during trade fairs or other events. In this context, covers for chairs and tables and also skir>ng play an important role. Catering companies call this part of their services non-‐food catering, which lends itself to coopera>on with tex>le services. 169 7. Requirements, opportuni9es and risks on the product level 7.3 Table linen Growth poten9al of table linen 1) Dangers of subs9tu9on Fabric tablecloths and napkins are currently experiencing full-‐blown compe>>on with alterna>ve solu>ons. If nothing else, this is due to the fact that they are rather expensive. Regarding tablecloths, there are two alterna>ve trends: a) if the tabletop is airac>ve, a decora>ve runner and/or place sets are used instead of a full-‐sized tablecloth; in some cases, no table linen is used at all, or paper table cloths are used; b) in community catering – e.g. in staff cafeterias, dining rooms in nursing homes and hospitals, and even in hotel breakfast rooms – table linen is being replaced by trays. As for napkins, fabric is being subs>tuted by paper increasingly. On the whole, full-‐sized fabric tablecloths and fabric napkins are being pushed into the higher end of gastronomy. 2) Difficult economic constella9on Economic development in Europe was not uniform in 2012/2013 (see Chapter 10: Market development scenarios). Especially Italy, a country with a dis>nct culture of using table linen, is stricken by the Euro crisis. On the whole, it can be expected that demand will increase in the medium term, because the principal drivers of demand will develop in a posi>ve manner. In the short term, however, demand will only rise in the stable countries of the EU. 3) Events catering Event catering is a growth segment. Accordingly, catering companies are enjoying growing demand for their services. But despite all the prerequisites for expansion being in place, this segment heavily depends on economic condi>ons. Flexibility demanded from tex>le services in terms of ability to deliver and punctuality is par>cularly high in this segment. 170 7. Requirements, opportuni9es and risks on the product level 7.3 Table linen 4) Community catering on the rise The catering segment consis>ng of re>rement homes, hospitals and staff cafeterias is also expanding because ins>tu>ons and companies are closing their own kitchens, with a resul>ng increase in the number of par>cipants in community catering. The demand for table linen is generally not very high from ins>tu>ons, but it contributes to the total volume of demand for basic table linen. This has more impact on the health & care market, however, than on catering companies. 5) Long-‐term innova9on poten9al Work con>nues on stain-‐resistant table linen and good results are expected from Nano technology. Other new func>onali>es have been iden>fied for further development as well, e.g. using the tablecloth as a monitor screen. Menus could be displayed and orders placed through the virtual screen. This could reverse the trend to subs>tute tablecloths and make them interes>ng once again. How to keep them clean s>ll has to be clarified. FTN, the tex>le services associa>on of the Netherlands, has looked into this and into other innova>on poten>als and draHed and ini>ated corresponding research and development programmes (FTN/NST 2012). On the whole, the growth poten>al for table linen is likely to be less posi>ve un>l 2017 than for bed linen and bathroom fabrics. Growth expecta>ons for specific products are illustrated in Chart 5.2.4-‐3 (Development of demand for table linen). 171 7.3 Table linen Chart 7.3-‐1 Demands in respect of table linen Stock of table linen in line with targeted patrons Guests’ expecta9ons of table linen selected criteria Table cloths Table runners Place sebngs Fabric napkins Fabric quality Supplier brand Company logo Colour/design Sustainability Outdoor table cloths Table covers Skir9ngs Chair covers not important x x x x xA x x x x x important x A A A A A x xA A A very important A A A A low expecta>on x high expecta>on A 172 7.3 Table linen Chart 7.3-‐2a Demands in respect of table linen Hohenstein quality standard 706 for table linen Source: Hohenstein 173 7.3 Table linen Chart 7.3-‐2b Demands of table linen Hohenstein quality standard 706 for table linen Source: Hohenstein 174 7.3 Table linen Chart 7.3-‐3 Development of demand in table linen Demand for table linen from tex9le service providers depends on economic condi9ons. Table cloths and napkins are pushed into the high-‐end segment. Product 2013 2017 Table cloths Table runners Place sebngs Napkins Outdoor table cloths Table covers Chair covers Skir9ngs 175 7. Requirements, opportuni9es and risks on the product level 7.4 Work a[re for chefs 176 7. Requirements, opportuni9es s and risks on the product level 7.4 Work a[re for chefs The chef has become a public figure No part of the hospitality business has become as visible in recent years as the kitchen. Cooking has become a media event, whether at a celebrity dinner or in cooking shows. Many events offer not only an airac>ve buffet, but also rope in a TV chef or a top chef for live entertainment. Chefs have turned into stars and celebri>es in their own right. In many restaurants it is common courtesy that the chef de cuisine shows himself to the guests – in his work a[re. In some restaurants, patrons can look into the kitchen from their tables. At the Inamo in London, ac>vity in the kitchen is shown via camera. This public interest has also resulted in a boost for work a[re for chefs. Acrac9ve and suitable clothing underlines the posi9on of the chef Work a[re has a number of func>ons and in some cases, a long tradi>on which goes back to the medieval guilds (see Böiger 2009). The main purpose of kitchen a[re is: 1) Hygienic protec>on of foodstuffs and dishes during food prepara>on 2) Sparing of private clothing 3) Iden>fica>on of the chef with both his profession and his employer 4) Shaping the image of the restaurant Fashion and design as success factors In line with the increased public effect, fashion and design are important factors for success. The workwear industry offers a wide range of choices in terms of model, colour and design. Stylish chef‘s jackets with sophis>cated trimmings, bandanas as fashionable headdresses or half aprons in the latest colours – work a[re collec>ons have pizzazz and are up to date with regard to fashion. The market leaders offer both innova>ve new styles and classical, tradi>onal styles, in order to cover the whole spectrum of demand. 177 7. Requirements, opportuni9es and risks on the product level 7.4 Workwear for chefs Hygienic protec9on in the kitchen is compulsory Protec>on in the kitchen is about preven>ng transmission of germs and other kinds of contamina>on while food is being prepared. Since kitchen staff work with non-‐packaged, perishable foodstuffs which are ready for immediate consump>on, kitchens are placed where hygiene is of utmost importance. The EU regula>ons for food hygiene are directly applicable to any kitchen which is not part of a private household (EU Regula>on 852/2004 for Food Hygiene). It also aims at protec>ng consumers from harm due to insufficient hygiene between primary produc>on and selling (“from farm to fork”). In accordance with this regula>on, the principles of the HACCP concept have to be applied in order to ensure hygienic protec>on in the workplace (see Chart 7.4 -‐1: Outline of the HACCP concept). In some countries the EU regula>on is supported by na>onal regula>ons. Requirements for HACCP clothing What proper>es does clothing which protects against hygiene risks have? In Germany, DIN 10524 was developed on the basis of the European food regula>ons and their German counterpart. It specifies the criteria for work a[re in companies that handle food and for the inspec>on thereof. Criteria for work a[re include requirements with regards to ready-‐made ar>cles and the fabrics used. Requirements regarding the manufacturing of the garments are mainly intended to avert risks of contamina>on. Examples of specific criteria are: - pale colours to make cleanliness visible - no buions on the outside which could drop into food - no open pockets on the outside from which something could fall - no elas>cised waist-‐line in order to prevent dirt from gathering in folds 178 7. Requirements, opportuni9es and risks on the product level 7.4 Work a[re for chefs Condi9oning according to the rules of hygiene Not only the manufacturing of work a[re must be in line with the prerequisites of hygiene, but condi>oning must also ensure that the standards demanded are adhered to. The rule is: just clean is not hygienic enough. Condi>oning has to be monitored in terms of hygiene according to the HACCP concept. In Europe, the EN 14065 has been created, envisaging a management system for laundries, which will ensure hygienic -‐ that is microbiological -‐ quality. It should be noted that technical regula>ons for laundries vary within the EU. While >me/temperature calcula>ons based on TNO regula>ons are applied in the Netherlands, Germany relies on guidelines established by the Robert Koch Ins>tute or the German Society for Hygiene and Microbiology. This means that technical and microbiological implementa>on of hygiene management differs in the various parts of Europe. RABC as a flexible management system Based on EN 14065, a cer>fiable management system has been developed. Risk Analysis Bio-‐contamina>on Control (RABC), similar to HACCP, is intended as permanent improvement management. RABC can be combined with general quality management systems and with the HACCP system. With this method, the cri>cal issues and tolerance limits are iden>fied for individual companies, so that arrangements are flexible. It is a management system that establishes mechanisms for improvement, based on the situa>on as it is currently (Chart 7.4-‐2: The 7 Basic building blocks of the RABC concept). The German Gütegemeinscha7 Sachgemäße Wäschepflege for its part, has commissioned the Hohenstein Ins>tute to develop a quality label (RAL-‐GZ 992/3) that specifies threshold limits and monitors procedures for the microbiological quality of condi>oning. 179 7. Requirements, opportuni9es and risks on the product level 7.4 Work a[re for chefs Requirements for leasing suitability Hygienic condi>oning in accordance with the HACCP in gastronomy and the RABC in laundering,means that kitchen workwear has to comply with criteria that ensure suitability for industrial laundering and disinfec>on. Since in this respect, no specific requirements have been laid down for kitchen workwear, the norms and requirements established for the cleaning of workwear by tex>le services are applicable. On the EU level, these are the ETSA requirements for workwear. They are not norms, but rather guidelines to improve the durability of products exposed to industrial laundering processes. Together with the ISO 15797 norm, which defines procedures for tes>ng whether the requirements are met, and ISO 30023, which covers pictogram labelling of workwear (see Chart 7.4-‐3: Pictograms for industrial cleaning of workwear), this represents a clear catalogue of requirements to be considered by purchasing departments and laundries. Alterna>vely, there is also the quality label which the Hohenstein Ins>tute has developed for workwear that is suitable for leasing. Chances and risks for kitchen workwear 1) Hygiene as a driver of growth Awareness of hygiene will con>nue to increase in Europe and worldwide. Diseases like SARS (2003), swine flu (2008) and H1N1 (2009) had a worldwide impact on travel behaviour and sensi>vity to issues surrounding hygiene. AHer a series of food scandals, Denmark introduced Hygiene Smilies as a compulsory evalua>on of standards maintained by food-‐processing companies. Restaurants also have to display them in a prominent place, in order to inform visitors about their hygiene status. In May 2011, the consumer protec>on ministers of the German states adopted a similar system, dubbed the Hygiene Ampel (traffic light), to be launched in 2013. Under this system, assessment of gastronomy businesses will be based on the results of the previous four food inspec>ons. This ini>a>ve did not make it through the red tape unscathed, but at least it underlines the increasing importance of hygiene. 180 7. Requirements, opportuni9es and risks on the product level 7.4 Work a[re for chefs Kitchen work a[re is an essen>al and very visible precau>on for ensuring that hygienic condi>ons prevail in gastronomy. Increased awareness of hygiene issues will con>nue to have a posi>ve impact on demand in the medium term. 2) Fashion and design as an impulse for demand For the workwear industry, the kitchen is a prolific field in terms of innova>on and fashion. There are few segments where fashion designed for a specific profession plays such a big role. Obviously this boosts demand. 3) Risks due to economic condi9ons Fluctua>ons in the economy show fairly quickly in the turnover of restaurants. In view of the non-‐uniform economic situa>on within the EU, the development of tex>le services offering kitchen work wear will be less favourable in southern Europe than in northern Europe. 4) Expansion of system gastronomy boosts kitchen workwear Work a[re is compulsory for kitchen and wai>ng staff employed in system gastronomy. Expansion is also expected in the medium term and will boost demand for kitchen work a[re. 5) Increasing importance of catering services Event catering also uses work a[re for kitchen staff. This sector is heavily affected by economic condi>ons, but further growth is expected in the long term. Increasing business opportuni>es for tex>le services are expected in the community catering segment – e.g. re>rement homes, hospitals and rest cure clinics -‐ irrespec>ve of economic condi>ons. 181 7. Requirements, opportuni9es and risks on the product level 7.4 Workwear for chefs The rough assessment of the development of demand in Europe is illustrated by product class in Chart 5.2.5-‐4 (Development of demand for work wear in the kitchen). 182 7.4 Work abre for chefs Chart 7.4-‐1 Outline of the HACCP concept The HACCP concept The Hazard Analysis and Cri>cal Control Points concept (HACCP) was originally conceived to manufacture the first foods for space flights. The system is recommended by the Food and Agriculture Organisa>on (FAO) of the United Na>ons in order to ensure worldwide food hygiene for consumers. The seven HACCP principles 1) Conduct a hazard analysis of the safety of all foodstuffs for which the company is responsible 2) Iden>fy cri>cal control points for the safety of foodstuffs in the company 3) Establish cri>cal limits for each cri>cal control point 4) Establish cri>cal control point monitoring requirements 5) Establish correc>ve ac>ons when tolerance limits are exceeded 6) Establish procedures for ensuring the HACCP system is working as intended 7) Establish record keeping procedures The HACCP principles were specified for various sectors and developed further, as for example for frozen foods. The ‟good hygiene prac>ces” (GHP), which many associa>ons adopted as their first guidelines, are oHen the basis. HACCP cer>ficates are issued by cer>fied HACCP auditors. 183 7.4 Work abre for chefs Chart 7.4-‐2 The 7 building blocks of the RABC concept Tight planning and efficient control are impera9ve RABC is a quality management system in line with other QMs and HACCP systems QM system HACC RABC P The seven pillars of the RABC system 1 – List all risks of microbial contamination 2 – Establish control points (CPs) to locate potential risks 3 – Determine threshold values + tolerances 4 – CP monitoring: testing + observation 5 – Start corrective action if threshold values are exceeded 6 – Set up RABC system for efficiency control 7 – Documentation 184 7.4 Work abre for chefs Chart 7.4-‐3 Pictograms for industrial cleaning of workwear Pictograms provide an idea of the resilience of workwear in an industrial recondi9oning process. The new ISO 30023 serves as the basis. Washing Process 1 as the basis Tumble-dryer tested Professional Not for consumers Tunnel and wardrobe finisher tested Eight different washing processes are defined Source: Böiger 2011 185 7.4 Workwear for chefs Chart 7.4-‐4 Development of demand in respect of work a[re in the kitchen Demand of chefs work abre from tex9le service providers will increase in the medium term Product 2013 2017 Chef’s jacket Chef’s trousers Pinafore Half apron, bistro apron Shirt Blouse Polo shirt Headscarf/bandana 186 7. Requirements, opportuni9es and risks on the product level 7.5 Work a[re for waitrons Foto: Bierbaum-‐Proenen 187 7. Requirements, opportuni9es and risks on the product level 7.5 Work a[re for waitrons A sector in which staff members have such close contact to the client as in the hospitality business, is forced to take the appearance of its wai>ng staff very seriously. It is one of the key factors to welcoming and serving guests in a pleasant manner. This includes a demeanour that gives them the impression that they are being taken care of and respected, and that the staff is williing to make their visit special. Part of that has to do with the clothing . Hospitality staff in hotels, restaurants and catering companies have different func>ons. Restaurants are dominated by waitrons and bar personnel, catering services by waitrons and delivery drivers, and hotels by recep>onists and room service staff. Their work a[re has the following purposes: (1) staff is easily recognisable for guests (2) the image of the respec>ve businesses is boosted (3) staff iden>fies with the workplace (4) private clothing does not get spoiled (5) func>onality Dress should promote an image In the hospitality business, the well-‐known proverb “clothes make the man” becomes “clothes make the image” or even “clothes make the brand”. Well-‐dressed staff is not only an expression of the esteem a business has for its guests -‐ it also promotes its image and values. Neat and trim clothing is par>cularly important for room service staff and waitrons. In the large fast food chains, work a[re promotes branding. Apart from the external effect, corporate wear also boosts cohesion within the company. A joint dress code and visual iden>ty supports the self-‐image of employees as a “public” part of the company. 188 7. Requirements, opportuni9es and risks on the product level 7.5 Work a[re for waitrons Subsequently, one of the most important requirements for the work a[reof service staff is availability in the company colours, provided that the special rules for especially manufactured clothing allow for this, or that the colour range available is extensive enough. If not, it should be possible in any case, to add logos and emblems in the form of embroidery, a print or a patch. Fashionable aspira9ons are secondary, but important Fashionable aspira>ons for work a[re have come to play a significant role. When it comes to work wear in the hospitality business, these aspira>ons clearly take a backseat, behind the corporate image. Nevertheless a fashionable look remains important, because the work wear has to meet the expecta>ons of the guests as a target group, whilst at the same >me being comfortable to wear. Many employees feel that purely func>onal uniforms are frumpy. A more fashionable interpreta>on of work wear, however, allows waitrons and even cleaners to look smart. The purpose of fashion, in this context too, is differen>a>on, a lively appearance and integra>on into a dynamic society. Even today, the very classical black and white look dominates in gastronomy, followed by muted colours like anthracite and Bordeaux, but the situa>on is easing up considerably. There is also a large selec>on of paierns and shapes to choose from, especially for bar and restaurant staff. Tailoring for female staff and the use of func>onal materials are also becoming increasingly important. The emphasis is on humidity management and elas>city for improved comfortable wear. Suitability for industrial laundering is not always requested There are two reasons why suitability for industrial laundering is a less important requirement than in other segments. Firstly, recep>on staff usually wear business clothes, which so far are rarely offered as suitable for industrial laundering. 189 7. Requirements, opportuni9es and risks on the product level 7.5 Workwear for waitrons Work wear collec>ons which are suitable for leasing have only become available in recent years. Usually it is assumed that business suits, whether for ladies or gents, have to be taken for dry cleaning and employees are expected to do this on their own account. Secondly, many employees in the hospitality business work for smaller restaurants and bars which oHen issue work wear, but leave laundering to the wearer or take care of it themselves. Larger restaurants, chains and hotels on the other hand tend to make use of tex>le services. Suitability for industrial laundering is therefore a crucial requirement. Details were discussed in the previous chapter on work wear in the kitchen. Chances and risks of hospitality work abre 1) Economic condi9ons Economic condi>ons are the biggest risk factor for the development of demand for hospitality work wear. It must also be remembered that employment in the hospitality sector does not rise automa>cally when the economy gains momentum. Restaurants and hotels try to avoid hiring more staff for as long as they can because labour costs are the most important and the largest cost item – and the most sluggish one in terms of permanent posi>ons. It can be expected that non-‐uniformed economic development within the EU will have a nega>ve effect on the demand for hospitality work wear in countries like Italy. Countries where condi>ons are more favourable will have to compensate for this. 190 7. Requirements, opportuni9es and risks on the product level 7.5 Workwear for waitrons 2) Increasing concentra9on strengthens corporate wear and tex9le services The system advantages that restaurant and hotel chains have over independent businesses, becomes more apparent in >mes of crisis. Increasing concentra>on results in larger business units. This boosts the propaga>on of corporate wear, but more importantly the role of tex>le services as suppliers. 3) Demand promoted by fashion and design Fashion and design also play a part in s>mula>ng demand. It should not be overrated, however, and certainly is subject to serious considera>on during budget planning for restaurants and hotels. Since restaurants and bars have become part of an event culture, the fashionably fresh ou€its of waitrons may be an important aspect of a hospitality product which is harmonious as a whole. 4) Impulse provided by long-‐term growth in the hospitality business A slight, but no>ceable growth in the number of employees wearing hospitality uniforms can be expected in the medium to long term, due to increasing tourism in Europe. Since labour costs are the most important cost item employers will do their best to keep costs in check by raising labour produc>vity. This leads to some discrepancy between growth in value crea>on and the required number of employees. Hospitality staff will therefore increase at a slower rate than tourism. A rough es>mate of demand development by product class is illustrated in Chart 7.5-‐1 (Development of demand for work a[re for waitrons). 191 7.5 Workwear for waitrons Chart 7.5-‐1 Development of demand in respect of workwear for waitrons Demand in respect of workwear for waitrons will increase in most product groups Product 2013 2017 Jacket, blazer Trousers, skirts Waistcoats Half apron, bistro apron Tunics Blouses Polo shirts Accessoires 192 7. Requirements, opportuni9es and risks on the product level 7.6 Washroom services 193 7. Requirements, opportuni9es and risks on the product level 7.6 Washroom services Cleanliness and hygiene in hotels and restaurants are basic prerequisites to promote a sense of well-‐being among guests. The condi>on of toilets is par>cularly cri>cal. A washroom which is not spick and span will significantly reduce an otherwise posi>ve impression. Many guests view the condi>on of toilets as a measuring s>ck for the overall quality of a hospitality business. They even discuss it at the dinner table. Guests see a correla9on between washroom hygiene and the kitchen To mark World Toilet Day in 2011, paper towel manufacturer Tork presented the Washroom Barometer 2011, a survey on hygiene in European restaurants for which 4000 people were interviewed. One of the findings was that an unairac>ve washroom is seen as an indica>on that the kitchen is also in bad shape and not par>cularly hygienic (Chart 7.6-‐1: Washroom barometer 2011). This result clearly underlines the important role that well-‐kept washrooms play in gastronomy. It is probably similar with respect to hotels and hotels garni since they have to provide at least one restaurant or a breakfast kitchen (ISO 18513). Washrooms equipped from a single source The basic tex>le component of washroom services offered by tex>le services consists of fabric towels for drying hands. Market leaders offer numerous addi>onal products, especially: (1) Dispenser systems for fabric and paper towels (2) Soap dispensers and fragrances (3) Toilet accessories from brushes to toilet roll holders (4) Disinfectants and other consumer goods Washroom services aim at supplying any products that are needed for a washroom, for cleaning and for use by the guest, from a single source. Large suppliers of paper towels follow a similar concept. 194 7. Requirements, opportuni9es and risks on the product level 7.6 Washroom services Compe99on of hand dryer systems Basically, all washrooms in hospitality businesses are now equipped with a hand dryer system. Growth poten>al is therefore a maier of which system is preferred when new washrooms are equipped or when exis>ng systems are replaced. A comparison of the systems is difficult. There are some studies on hygiene efficiency and environmental compa>bility, but the findings cannot be used indiscriminately, because these studies are usually commissioned by stakeholders in the paper and fabric towel sectors. Even small changes in a study‘s basic assump>ons or the scope of method of approach can produce new results. This is not the place to look into this in a comprehensive and scien>fic manner. The most important findings are summed up in Chart 7.6-‐2: 1) Air drying is the best op>on in terms of costs. It is beyond ques>on, however, that the number of bacteria leH on air dried hands is higher than with other methods. 2) Fabric towels are the most expensive alterna>ve, but in terms of reducing bacteria they are considered more effec>ve than paper towels. 3) Air drying compares well in terms of environmental compa>bility. A study on fabric towel rolls and paper towels, commissioned by ETSA and conducted by the Ökoins>tute gives beier marks to the tex>le solu>on, but the European Tissue Symposium has pointed out that some assump>ons have a distor>ng effect and rela>vely renders the posi>ve result. 4) In terms of the hap>c sensa>on experienced by users, the two “camps“ have produced studies which are completely contrary to one another. 195 7. Requirements, opportuni9es and risks on the product level 7.6 Washroom services According to general experience, however, the use of fabric towels is similar to the familiar sense of drying known at home. Paper towels, even though much used in the kitchen, have not yet threatened the posi>on of hand towels in private homes. In contrast to towels used at home, fabric towel rolls in public bathrooms provide a new clean sec>on of cloth for each user. Fabric hand towels dominate in the upper market segment Based on empiric observa>on, although this has not substan>ated a representa>ve scien>fic study, the following can be said: 1) The luxury solu>on, adopted by interna>onal top hotels with five stars or more, is a toilet aiendant who personally hands a fresh towel to each guest. This is rarely seen in Europe but common prac>ce in Asia, for example. 2) The fabric towel roll dominates in good hotels and restaurants. Paper towels are in the minority although some businesses seem to opt for high-‐quality, rela>vely thick and absorbent paper. 3) Paper towels dominate in local restaurants, the system gastronomy and in more affordable hotels and other types of accommoda>on businesses. (4) Compe>>on at the boiom end of the market is mainly between paper towels and hand dryers. In that segment the paper tends to be rather thin and not very absorbent. Washroom informa9on system by CWS But the fact remains ,whether fabric or paper towels are offered, that a washroom that is not well kept will always leave a very bad impression, e.g. if the towel roll is not changed in >me, if bins are overflowing or if the paper towel dispenser is empty. 196 7. Requirements, opportuni9es and risks on the product level 7.6 Washroom services Such shortcomings are not a ques>on of systems, however, but a maier of proper housekeeping. This is where one of the latest innova>ons of CWS-‐boco comes in: a radio module in the fabric roll dispenser sends usage data to CWS which in turn informs the facility manager responsible. The immediate advantages are: -‐ Cleaning staff is able to react quickly -‐ Con>nued supplies to the washroom are ensured -‐ Planning is secured for all resources -‐ Costs are reduced and secured by proper planning Opportuni9es and risks in respect of tex9le washroom services (1) Risk: Costs Since the fabric roll service is not the most economical solu>on, the alterna>ve op>ons for drying hands clearly exert pressure on the price. (2) Risk: Expansion of system gastronomy and budget hotels If economic condi>ons are less favourable and the systems gastronomy and budget hotels con>nue to expand, growth for the luxurious fabric towel will be weakened by paper towels, and market shares will be lost. (3) Opportunity: Innova9on The use of tex>les for drying hands can be boosted by innova>ons. Market leader CWS-‐boco has launched a whole series of innova>ons in washroom hygiene, which not only strengthen the posi>on of CWS, but also that of the towel roll. One of the major innova>ons is the washroom informa>on system and towel roll dispensers used as messengers. Companies can use the front panels of the dispensers for their own purposes or sell the surface as adver>sing space. 197 7. Requirements, opportuni9es and risks on the product level 7.6 Washroom services 4) Chance: HACCP As efforts to improve hygiene spread further, facili>es for washing the hands will also improve, par>cularly in kitchens. This will give addi>onal momentum to the market, and towel rolls will play an important role there. Bocom line: On the whole we expect washroom turnover to grow, because the hospitality sector is expanding. As a result, there will be growth impulses for the tex>le op>on, but in the coming years, the rela>ve market share for tex>les may fall behind the paper towel op>on. 198 7.6 Wash room services Chart 7.6-‐1 Wash room barometer 2011 If the toilet isn’t clean, the kitchen won’t be clean either Response of sampled population by country FR UK NL DE BE 72 74 76 78 80 82 Percent 84 86 88 90 92 Source: www.tork.co.uk 199 7.6 Wash room services Chart 7.6-‐2 Comparison of hand drying systems S9ff compe99on between fabric and paper towels Price per drying process Decrease in bacteria Environmental compa9bility Hap9c aspect Air drying 1 3 1 3 Paper towels 2 2 2 2 Fabric towels 3 1 2 1 Source: www.etsa-‐europe.org; www.schulklo.de; www.tork.com/au; www.wepa-‐professional.de; www.european>ssue.com 200 7.6 Wash room services Chart 7.6-‐3 The Washroom Informa>on Service Innova9ons like the WIS may strengthen the posi9on of the fabric towel roll Source: www.cws-‐boco.com 201 7. Requirements, opportuni9es and risks on the product level 7.7 Mats Foto:Kleen-‐tex 202 7. Requirements, opportuni9es and risks on the product level 7.7 Mats Mat systems increase cleanliness and reduce costs First impressions are important. Stepping through the door prepares the guest for things to come. The entrance area of many hotels and restaurants is therefore designed with great care. It is an opportunity for hotels to showcase themselves and at the same >me to make the guest feel welcome and appreciated. The overall aim is to create an impression that lasts. The entrance area therefore has an important marke>ng func>on and cleanliness is indispensable. Dirt trapping mats for entrance areas are a par>cularly good example of the usefulness of mat systems. They contribute to cleanliness and safety and even serve as an element of communica>on. Specially designed mats, displaying gree>ngs or logos for example, can enhance the marke>ng func>on of the entrance area in a targeted manner – in addi>on to reducing cleaning and renova>on costs. The basic func9ons of mats There are three basic func>on classes for mats in the hospitality business: 1. Dirt trapping 2. Communica>on 3. Other func>ons such as industrial safety Each of these func>ons has its jus>fica>on and contributes to the market and yield poten>al of the mat business. Dirt trapping and communica>on are currently the domina>ng func>ons in the HORECA market. Industrial safety is not very prominent yet, but it is expected to become more significant in view of the fact that working condi>ons are increasingly scru>nised, especially with regards to the kitchen and recep>on. 203 7. Requirements, opportuni9es and risks on the product level 7.7 Mats Everyone has dirt on their shoes and brings it inside Each person who enters a hotel or restaurant carries a certain amount of dirt inside, and all this dirt combines into one of the largest sources of pollu>on. According to a study conducted by the European Tex>le Service Associa>on (ETSA), the average amount of dirt carried in on entering is 1 gram per person when the weather is pleasant and up to 7 grams or more when the weather is bad. For busy hotels, this means that 500 people, for example, would bring in between 500 grams and 3.5 kg of dirt per day. Dirt trapping mats absorb up to 80 percent of dirt and wetness from shoes that walk over them – at any >me of the year. They also reduce the risk of slipping. Considerable savings can be achieved with dirt trapping mats: they influence cleaning costs in par>cular, but also repair and renova>on costs, because the protec>on afforded by them increases the lifespan of floors. Func9onal requirements for dirt trapping mats Dirt trapping mats should meet the following criteria: 1. Remove dirt from shoe soles 2. Trap the removed dirt 3. Prevent those walking over the mat from picking up the dirt that has already collected, thereby spreading it 4. Absorb wetness from shoe soles so that they do not leave dirty footprints in the interior of the building 5. Stay firmly in one place without slipping 6. The surface of the mat may not be slippery 7. The pile needs to be able to recover well so that the mat looks clean for a given period of >me and does not start to smell. 204 7. Requirements, opportuni9es and risks on the product level 7.7 Mats 8. They should be wheelchair-‐friendly. 9. For ecological reasons, the mat itself must be cleanable in order to keep it fully func>onal for as long as possible. Different purposes for mats Mats outside the building can prevent most of the dirt on shoes from being brought inside. They are usually of rubber and also serve as a moisture barrier, unless the entrance area is covered. Even though they are oHen suitable for industrial cleaning, it is not common to take them to a mat cleaning service in all countries. The most important area of use for dirt trapping mats made of tex>les is the foyer or entrance hall. They are also a good idea, however, for bridging different levels of pollu>on, e.g. from underground parking into the hotel, and they are also useful in places which are prone to heavier soiling, such as in front of elevators. There are different mats for different types of dirt and different frequency of use, so that areas for heavy traffic have different mats to those used for side entrances, for example. Mats with special func9ons Rubber mats can also be used inside if they have a special func>on. Several companies offer rubber mats with an an>-‐fa>gue effect, for example. They are made of pressed foam rubber. The fact that the mat is soHer than a normal floor reduces fa>gue in staff who have to stand during most of their working >me, e.g. in the kitchen. The springy surface also reduces breakage when crockery drops onto the floor. Carefully posi>oned holes allow moisture to trickle through. This type of mat combines two func>ons: it provides relief for people who have to stand a lot at work and it protects against moisture. 205 7. Requirements, opportuni9es and risks on the product level 7.7 Mats The future poten>al of mats that improve condi>ons in the workplace is interes>ng because working condi>ons are now being taken more seriously by industrial safety authori>es and also by employees themselves. The use of mats is advantageous in many places. An average hotel poten>ally has ten different areas where the use of mats makes sense from an economical point of view (see Chart 7.7-‐1: Model: posi>ons of mats in hotels). The message at your feet: mats as a medium Mat culture culminates in design and logo mats that carry a message in addi>on to their dirt trapping func>on. Corporate iden>ty, image and informa>on can all be displayed on mats, too. Quan>ta>vely, these mats account for only about 20% of the market, but their prac>cal value is much higher than that of unprinted standard mats. Responsibility also differs on the client‘s side: marke>ng managers and proprietors are contact persons for sales representa>ves when it comes to logo and design mats, whereas facility management or housekeepers make decisions regarding unprinted mats. Sustainability is also important for mats It should be noted that mats as such contribute to the longevity of floors and help to save cleaning and renova>on costs. They are products that help to promote sustainability. But their product proper>es and cleaning requirements are also being scru>nised increasingly, with regard to the aspect of sustainability. Leading manufacturers have added mats to their programme for which recycled materials are used. For example, one square metre of mat pile is made from about 25 recycled 500 ml PET boiles. Apart from being produced in a more sustainable manner, this pile is also more heat resistant and it dries more easily. 206 7. Requirements, opportuni9es and risks on the product level 7.7 Mats Opportuni9es and risks for tex9le services in the HORECA market in Europe 1) Differing economic condi9ons The mat business is dependent on the number of guests in the hospitality sector, and therefore on economic condi>ons. Countries where condi>ons are favourable offer good opportuni>es for tex>le services to further expand their business with mats. Fewer chances for mat services are offered by countries where guest numbers are temporarily lower due to the Euro crisis. 2) Market poten9al is not yet exhausted Many tex>le services see mats as addi>onal business, run along the lines of “considering that we are already doing this we may as well do mats, too”. This is true for sales as much as for laundries and service rounds. It makes mat services quite profitable, because mats are simply included in some of the cost items (laundry, service rounds) and some items are not worthwhile or remain low. The market is not yet exhausted however. According to our assessments, turnover with mats in the HORECA segment of tex>le services amounts to between 70 and 80 million Euros in the German-‐speaking area. The poten>al is between 220 and 240 million Euros, based on 54,000 hotels, and ten mats as the typical poten>al of an average hotel. This means that only 30% of the market poten>al is currently being u>lised (see Chart 7.7-‐2: Maximising the mat market). Facility management, retail trade and direct and online sales account for the remaining 70%. A large part of the poten>al is not equipped with mats at all. 3) Focus on sales Specialised companies like CWS or CityClean (Berlin) show that with a focused approach, beier exploita>on of the HORECA market for mats is also possible. 207 7. Requirements, opportuni9es and risks on the product level 7.7 Mats The exper>se of these two companies in respect of mats not only results in improved know how and increased sales opportuni>es with hotels and restaurants, but also in condi>oning processes for larger quan>>es and with more techniques, which in turn reduce costs and increase profitability. Both philosophies are jus>fied. From the client‘s perspec>ve, it is important that a service that is comprised of several product groups is available from a single source. From the perspec>ve of the product, it is important that the market poten>al is developed and u>lised in the best possible way. How the priori>es are set is a ques>on of the individual sales strategy and sales concept. 4) Intensify coopera9on with facility management services Mats are also provided by facility management services. The construc>on of these mats is oHen not intended for industrial cleaning but rather for vacuum cleaning, possibly followed by some rubbing. Since this type of cleaning has to be done more oHen than industrial cleaning, dirt is kept at the surface instead of dropping to the backing. Mats constructed for industrial cleaning work in the opposite way: because dirt drops to the backing they can absorb a lot of it (Chart 7.7-‐3: Differences in the construc>on of mats). Cleaning intervals are longer for these mats and according to the industry, their lifespan is 10 years or longer. Non-‐washable mats last for much shorter periods. Many hotels and restaurants therefore prefer washable mats. Since cleaning of hotel floors is oHen outsourced to facility management services, these companies usually cooperate with tex>le services in order to serve their clients in the best way possible. Demand for mat services would be on the rise if tex>le services ac>vely sought such coopera>on. The assessment of demand is illustrated by product in Chart 7.7-‐4 (Development of demand for mat services). 208 7.7 Mats Chart 7.7-‐1 Model: loca>ons of mats in hotels 209 7.7 Mats Chart 7.7-‐2 Maximising the mat market Market poten9al for mat services promises favourable growth Source: Böiger 2012 210 7.7 Mats Chart 7.7-‐3 Differences in of mat construc>on Dirt drops onto the backing of washable mats. The backing is perforated for water permeability during the recondi>oning process. In non-‐washable mats, dirt stays at the surface for removal by a vacuum cleaner. Illustra>on: Kleen-‐Tex 211 7.7 Mats Chart 7.7-‐4 Development of demand for HORECA mat services Demand for mats and mat services will rise Product 2013 2017 Mats for outside area Mats for inside area Logo and design mats Other func9on mats 212 8. Opportuni9es and risks in product design Now that we have dealt with what clients expect from tex>le services and the resul>ng opportuni>es and risks based on products, we turn to the opportuni>es and risks involved in the process of providing services to the HORECA market. We will look at opera>onal performance and related costs. Organisa>on of resources is constantly concentrated on increasing the company’s poten>al and exploi>ng it successfully. The two decisive factors are: (1) Controlling costs and digression of exis>ng products and produc>on processes (2) Innova>ons to keep costs down, improve service to clients and boost the compe>>ve edge In this study, we will only look at some of the fundamental aspects and approaches which are of par>cular significance for the HORECA markets, based on crucial func>ons of value crea>on and the costs involved. Risks resul9ng from rising costs The costs of almost all the primary products, opera>onal facili>es and auxiliary means used by tex>le services have increased over the past years. Prices for energy and water/effluent in par>cular, rose significantly. Tex>les also saw price hikes aHer the coion crisis. Salaries and wages rose as well, in par>cular aHer the 2009 crisis had been overcome in some countries. The cost index compiled by FBT, the Belgian associa>on for professional tex>le care, shows that cost factors for Belgian laundries have increased by 20 index points since 2007. And this even though the 2009 crisis leH deep marks in Belgium as well (Chart 8-‐1: Increasing laundry costs). Germany also introduced a minimum wage, which resulted in addi>onal costs for smaller companies in the tex>le services sector. 213 8. Opportuni9es and risks in product design Rising costs immediately reduce profits unless they are passed on to the client. This is difficult for tex>le services in the short term because at best, prices are nego>ated annually, but more importantly because the fierce compe>>on and budget pressures experienced by many clients do not leave much room for passing the buck. The big cost items should be trimmed first Efforts to reduce unit costs are usually faster, more effec>ve and above all more client-‐friendly than price nego>a>ons. Furthermore, a provider should not risk manoeuvring himself out of the compe>>on. Price hikes should be absorbed by star>ng to trim down the big cost items. Cost structure is dominated by labour costs Labour costs are the most important item in the cost structure of tex>le services. Several surveys, conducted by the Hohenstein Ins>tute or by Intex for example, are available on the subject. A study by Ecolab shows that labour costs account for 31% of the total costs of European tex>le service companies. Tex>les are the second largest cost item. Figures for their share in total costs differ between 17% (intex 2011) and 27% (von Schoenebeck/Hohenstein 2011). According to Ecolab, they account for 24%. Costs for water and energy, much discussed for environmental reasons, account for only 7% and 4% (Chart 8-‐2: Cost structure tex>le services. 214 8. Opportuni9es and risks in product design Chart 8-‐1 Increasing laundry costs The costs of produc9on factors for laundries have risen steadily Source: Kostenindex FBT 215 8. Opportuni9es and risks in product design Chart 8-‐2 Cost structure tex>le services Expenses for European tex9le services are dominated by labour and tex9le costs Source: Ecolab 2012 216 8. Opportuni9es and risks in product design 8.1 Labour costs and produc>vity In a sector that experiences posi>ve development, the success of companies must be shared with employees by raising salaries and wages. A crucial factor for keeping the resul>ng increase in costs in check is improving produc>vity. There are approaches which specifically target flat work and there are innova>ve concepts for the process as a whole. Improved produc9vity through automa9on between washing and finishing Flatwork is oHen more labour-‐intensive than garments because some laundry processes are not yet very automated, par>cularly those between the washing machine and the rotary iron: sor>ng the various pieces to be ironed aHer they have come out of the washing machine. Instead of picking pieces from the laundry trolley by hand, machines are available to separate and straighten the individual pieces for easy feeding into the rotary iron (Chart 8.1: Pick-‐up system). Jensen has developed a machine for automa>c separa>on and folding of fully dried towels. Folding machines are also improving con>nuously by reducing the number of items that have to be folded by hand and an increase in speed. One example is the folding of bathrobes, which can now also be done by machine. Improvement of the en9re process through informa9on systems Produc>vity can be increased significantly by applying control methods which cover the en>re process, i.e. the coherence of capaci>es in terms of availability as well as real-‐>me monitoring. In essence, this is about being able to check the performance of machines or employees at cri>cal produc>on points at any given >me. The control system will show, for example, that Number 1 rotary press performs beier than Number 2, or that Employee A’s output is lower than that of Employee B. 217 8. Opportuni9es and risks in product design 8.1 Labour costs and produc>vity Covering all produc>on sta>ons, this provides an excellent overall idea of boilenecks and differing performance. The detailed view of produc>on as a whole and the transparency of equipment and staff performance are seen by many companies as a significant step forward that offers many opportuni>es for improving produc>vity. Improvement through benchmarking and becer produc9on planning and control Whereas monitoring systems are a retrospec>ve source of informa>on, there are three factors that can increase produc>vity more so than transparency can: 1) New systems, e.g. those offered by Spindle Technologies Europe in coopera>on with Ecolab, provide real-‐>me informa>on. This means that the produc>on manager is able to see immediately if performance drops below the target level at any of the work sta>ons and, if possible, can respond immediately. 2) If the tex>le services company is large enough and runs several laundries, detailed internal standards of comparison can be established. The experience of the technology provider can also be used to compare typical efficiency levels with one’s own. 3) (3) Capaci>es can be op>mised and produc>on planning as a whole can be considerably improved if availability is taken into account. This informa>on package (Chart 8.1-‐2: Real-‐>me informa>on for the laundry management) increases produc>vity significantly and allows for produc>on on a very high level. It also strengthens mo>va>on of staff and teambuilding. Development of capaci>es, availability and the flow of material take on a new dimension while produc>vity of staff and machines is liHed onto a new level. 218 8.1 Labour costs and produc9vity Chart 8.1-‐1 Pick-‐up system Automa9c straightening, separa9ng and pick-‐up eases the feed to the rotary iron Transfer to picking belt and distribu>on Sensor clamps LiHing of items Separa>on Source: Kannegiesser 219 8.1 Labour costs and produc9vity Chart 8.1-‐2 Real-‐>me informa>on for the laundry management Visual display of prevailing laundry performance hip://www.youtube.com/watch?v=QAgzd7MrGc4 220 8. Opportuni9es and risks in product design 8.2. Saving water, energy and chemicals Savings and more sustainable produc9on Energy and water are necessary for produc>on but they are not part of the product. There have been numerous efforts for some >me now to reduce the use of water and energy in tex>le services. One aspect is saving costs: according to an Ecolab survey (Chart 8-‐2: Saving water, energy and chemicals) water, energy and chemicals account for about 13% of total costs. Another aspect is sustainable produc>on. Cu[ng down on chemicals without reducing cleanliness is also welcomed by society as an effort to further sustainable and natural produc>on. This is not the place to look at the many innova>ons which help to save water, energy and chemicals. Almost every supplier of machines and chemicals has presented novel>es in recent years. Some of the features which are important for the HORECA segment give an indica>on of the general direc>on and the intense and comprehensive efforts to further develop produc>on. Innova>ons focus on: (1) improving individual processes and machines, e.g. the rotary iron (2) new laundry methods, e.g. low temperature laundering (3) cross-‐process op>misa>on, e.g. an energy management system (4) new energe>c overall concepts, e.g. the steamless laundry Hea9ng band systems improve rotary iron technology HORECA markets mainly deal with flatwork. Therefore we take a closer look at an improvement in rotary iron technology, which not only reduces energy costs, but is also easy on the tex>les. The star>ng point is the conven>onal principle of roller and chest for drying and smoothing. 221 8. Opportuni9es and risks in product design 8.2. Saving water, energy and chemicals For a tradi>onal 3-‐roller chest ironer, which is 4000 mm wide, 6 tons of steel have to be heated up and kept hot, which requires huge amounts of energy. An addi>onal problem is that the heavy hea>ng element does not fit the roller >ghtly enough to distribute heat absolutely evenly. Significant progress has been achieved with hea>ng band technology: the roller chest is replaced by a >ght fi[ng band of high-‐grade steel which is at least 80% lighter than the conven>onal bed. This means that much less steel is used for the band and much less energy is needed to heat it up and maintain the temperature. Since less energy is used, there is also less heat radia>on, and the amount of vapour that escapes is also lower. The Leonardo da Vinci project on Sustainability of Industrial Laundering Processes compared a three-‐module rigid chest ironer with a two-‐module hea>ng band ironer of equal capacity. According to the project’s findings, the hea>ng band requires 127 000 kWh of electricity less per annum (www.laundry-‐sustainability.eu). Other advantages are that less space is needed, running costs and maintenance costs are lower and ironing quality is excellent due to equal distribu>on of pressure and the polished surface of the high-‐grade steel band. Hea9ng band technology with reduced temperatures and con9nuous vapour adjustment Kannegiesser has made further improvements to this technology, i.e. lowering temperatures and steam pressure, because in many cases, flatwork is ironed at higher temperatures than necessary. Items dry faster this way but the flipside is an unnecessarily high loss of tensile strength and damage to fibres. Infinitely variable vapour adjustment ensures that tex>les are treated at temperatures that are best suited to the fabric. This again reduces energy consump>on, because the ironer is not set too high “just to be sure“, and adjustment to the ideal temperature is faster and unlimited . 222 8. Opportuni9es and risks in product design 8.2. Saving water, energy and chemicals The gentler treatment of tex>les increases their lifespan, while the ironer, especially the hea>ng band, is also subjected to less wear and tear (for more details see: von Schoenebeck, 2011). Energy saving in the laundry system Laundering is based on four basic components: >me, equipment, temperature and chemicals. In certain cases, one component can be subs>tuted by one of the other four. For many years, innova>ons for industrial laundries were aimed at increasing the speed and temperatures of machines in order to improve produc>vity. The goal of saving water and energy costs and adhering to the principles of sustainability has become the new paradigm of produc>on. Low temperature laundering Energy can be saved by reducing the water temperature of wash cycles. As explained by the Sinner Circle, lower temperatures need to be be compensated for with improved machinery, more efficient chemicals or more >me in order to maintain the same level of performance. Ecolab promotes Ozonit 40, a new disinfectant and bleach. With this powerful agent, it is possible to wash hotel laundry at 50 degrees while maintaining the required standards of cleanliness and hygiene. This means that the whole process needs less steam pressure, which in turn results in a significant drop in energy costs. Addi>onal ways of saving water and energy are recycling of waste water, heat exchangers and energy converters (Chart 8.2-‐1: The basics of saving water and energy). 223 8. Opportuni9es and risks in product design 8.2. Saving water, energy and chemicals Energy recovery under one roof An energy recovery system such as the one installed for Larosé in Berlin uses (1) the heat content of waste water from laundering for the heat exchanger and (2) the warm waste air from finishing for the condensa>on heat exchanger. The heat exchanger heats fresh water to 50 or 55 degrees for use by the laundry. The Larosé energy recovery system, which is said to be the biggest in the world, is expected to recover 3.5 million kWh per year (o.V., WRP 3/2012, p.36). The steamless laundry The steamless laundry is a concept introduced by Jensen, which works without a boiler room that produces steam. Energy is supplied by direct gas-‐fired units, independent high-‐speed or low-‐pressure steam generators and ingenious energy and water recovery systems. According to Jensen, energy savings of up to 60% can be achieved with this concept (Jensen 2010). It has also been applied by A&M Blanchisserie Basse Meuse, a Belgian tex>le services company. A&M specialises in hotel linen and is designed to handle 125 tons. Towels and bed linen are laundered at about 60 degrees in gas-‐heated tunnel washers. Table linen needs higher temperatures and is therefore transferred to steam-‐heated tunnel washers. All drying and finishing machines run on gas. Machine and chemical suppliers offer various other op>ons which cannot be discussed here. Recent trade fairs on laundry technology have shown that the laundry sector has many choices on offer when it comes to saving costs and using resources more carefully. The management of laundries have come to realise that the earth and its resources also have their limits. 224 8.2. Saving water, energy and chemicals Chart 8.2-‐1 The basics of saving water and energy Highly efficient detergents and addi9onal devices result in considerable savings in water and energy consump9on Basis:Ecolab 2008 225 8. Opportuni9es and risks in product design 8.3 Logis>cs: RFID for flatwork Unmistakable iden9fica9on is the key With a wireless non-‐contact system called Radio Frequency Iden>fica>on (RFID), it is possible to iden>fy any item equipped with an RFID tag. The tag emits radio waves to its base. It requires no line of sight or handling (Chart 8.3-‐1: Structure of the RFID system). Any informa>on that is necessary to iden>fy the tagged item beyond doubt is stored on that item’s tag. Readers send a signal to the tag and register its response. RFID tags can be widely applied to track and manage inventory. Comparison of RFID and barcodes The big progress achieved with barcodes and RFID is the fact that encoded data is stored for reading by special devices. Individual items no longer have to be wriien down as they used to. Incoming goods, inventory and materials management on the whole, have been simplified by automa>c reading of data. In terms of logis>cs, the RFID system is far more advanced than the barcode. A barcode does not iden>fy an individual item, but rather the product type – e.g. hand towel 60 x 80 cm, weight 490 g, colour white, owner Grand Hotel – while the RFID tag, apart from storing the same informa>on, adds a unit code with which it can be unmistakably iden>fied. This creates transparency for the individual towel: how long was it in the hotel before it was brought back to the laundry, how many cycles has it gone through, on which floor is it used etc. Informa>on such as origin and des>na>on can also be stored on the tag. There are a number of other advantages, for example, that RFID tags can be reprogrammed if relevant data has changed. A summary of the advantages and disadvantages is illustrated by Chart 8.3-‐2 (Comparison of barcode and RFID). 226 8. Opportuni9es and risks in product design 8.3 Logis>cs: RFID for flatwork Whether a tex>le services company uses barcodes or RFID needs to be decided in each individual case. It is rather obvious, however, that the transparency of items which is made possible with RFID has many financial advantages. This will lead to increasing use of this technology, but not to the complete replacement of barcodes. As far as the HORECA markets are concerned, cos>ng will probably leave a lot of room for barcodes. UHF technology improves bulk reading RFID is not at all new and has already been in use in laundries for years. According to a survey conducted by IDTechEX , a market research and consul>ng company specialised in iden>fica>on technologies, laundries bought some 75 million tags between 1944 and 2005, accoun>ng for a market share of about 3%. By comparison, the transport sector alone accounted for more than 40%. IDTechEX researchers expect RFID growth rates of 10% and more for the next years in the tex>les and clothing industry as well as related sectors such as laundries (Harrop, Das 2012). Un>l now, tags have mainly been used for garments and rarely for flatwork. One of the decisive reasons is that the High Frequency range of about 1.5 metres, which has dominated un>l now, was not considered sufficient for efficiently reading data from a bin of dirty bed linen, for example. More recently, however, Ultra High Frequency technology is available with a range of 3-‐6 metres and higher transmission speeds. UHF is clearly an improvement for bulk readings, even though condi>ons will have to be analysed from case to case, because reliability is s>ll a weak point, due to the Faraday Effect of metal containers for example. RFID for flatwork in the laundry Every tagged item is automa>cally and individually recorded by bulk reading at the entry point for dirty laundry. When incoming goods are compared with outgoing goods, differences in quan>ty immediately become apparent. 227 8. Opportuni9es and risks in product design 8.3 Logis>cs: RFID for flatwork Incoming items are entered into the system when they are purchased by the tex>le services company. As they are received for condi>oning, the data is cross-‐checked. The number of cycles, cycle >me at the client, possible aHercare on previous occasions, the manner of condi>oning and other informa>on can be retrieved from the data for each individual piece. At specific points where a reader is installed, opera>onal efficiency during the condi>oning process can be monitored and improved in terms of the machine or workplace. Before laundered goods are dispatched to clients, completeness of orders can be checked easily and automa>cally. Commissioning and processing of orders becomes faster and more accurate with the use of RFID for stock and dispatch. In general terms, using RFID in laundries mainly serves to: - mark individual pieces - monitor stock - locate posi>ons - control produc>on and avoid process errors - control incoming goods - control dispatch Currently, only a few companies do this with flatwork, leaving ample space for improvement. The benefit of RFID is not limited to the increase in efficiency during condi>oning. Rather, the data captured for the individual items forms the basis for comprehensive tex>le management as an addi>onal service for hotels, restaurants and catering companies. The goal is op>misa>on along the value crea>on chain for the client as well. This is largely new ground for the tex>le services sector in the HORECA markets. We will take a closer look at this in the chapter on new business fields and service models. 228 8.3. Logis9cs: RFID for flatwork Chart 8.3-‐1 Structure of the RFID system Structure and general func9oning of RFID systems Source: Transport Informa>on Service according to Böiger (2008) 229 8.3. Logis9cs: RFID for flatwork Chart 8.3-‐2 Comparison of barcode and RFID The RFID system is more advantageous for demanding logis9cal services Source: Heinrich 2011 230 8. Opportuni9es and risks in product design 8.4. Marke>ng and sales Internet marke9ng becomes most important When decision makers of companies are asked about the media they use for marke>ng, the sales representa>ves of suppliers s>ll come first for clients from the tex>le services sector (see Böiger 2007). But the Internet is catching up fast. Many decision makers are already looking at Internet offers first before deciding whether they want more informa>on and from which source. Against this background, a company’s presence on the Internet is something like a business card at first. Developments reach much further, however, and will con>nue to expand. Not only has the age of the Internet only recently begun, but so too has the age of Internet marke>ng (Chart 8.4-‐1: Internet development). “Google“ first If one doesn’t know an Internet address which could provide answers to certain ques>on, a search engine is the next step. With regard to using a search engine: Google is used in more than 70% of searches. Search engines are interfaces of communica>on on the web. They turn informa>on from millions of websites into catchwords and send these to searching users. It is not enough to have a good website as a business card -‐ it has to be op>mised for search engines in order to get it listed at all when a search is answered (Chart 8.4-‐2: Search engines as nodes). Search engine op>misa>on (SEO) is currently in the process of being developed into strategic Internet marke>ng, which aiempts to control the informa>on about a company that is available on the Internet. Internet marke9ng becomes interac9ve The interac>ve instruments which are now adopted by the business world are of crucial importance in Internet marke>ng: opportuni>es to give feedback through the company website, forums and especially communi>es with portal func>on. 231 8. Opportuni9es and risks in product design 8.4. Marke>ng and sales Permanent connec>ons are formed through virtual mee>ng places and markets which serve to keep in touch, exchange informa>on and prepare the ground for business (Chart 8.4-‐3: Diverse forms of expression in the Internet). Direct marke9ng goes online Internet marke>ng and direct marke>ng are combined through newsleiers sent by email and closed groups of users with specific user profiles. Some companies have already introduced protected areas that are intended mainly for clients and can only be accessed by login. Direct marke>ng with printed informa>on will decline. Mee9ng in person remains important Despite the buzz surrounding the Internet and online marke>ng, it must be pointed out that mee>ng in person remains important for counterbalance, e.g. trade fairs, par>cipa>on in or sponsoring of events arranged by target groups etc. Personal contact is oHen the key to success, or failure, especially when it comes to sales ac>vi>es. Periodic restructuring and innova9on are necessary There is no magic formula for the best structure and organisa>on of sales. Experience shows, however, that sales have to be driven in a goal-‐oriented manner and need to be restructured every three to five years. Fundamental innova>on is necessary to maintain dynamic momentum. In the face of increasingly fierce compe>>on, it is impera>ve that sales structures are reviewed and accounted for more oHen than is currently the case. 232 8. Opportuni9es and risks in product design 8.4. Marke>ng and sales Establish a CRM system A CRM system is needed if you want to play a leading role in the market. Increasingly tough compe>>on makes it necessary for sales staff and management to know as much as possible about their target clients. These details have to be recorded as well, firstly because systema>c recording some>mes shows what the company does not know, and secondly because what employees know about customer rela>onships must be made known to the company as a whole. The CRM system is the pacemaker and coordinator of direct marke>ng and sales – which is another reason why it is important to establish this system. Establish online sales Some tex>le service companies already offer exis>ng clients the opportunity to use their own data for registering or cancelling addi>onal users within the scope of exis>ng contracts. This is the start of online sales to exis>ng clients, and development will con>nue from this point. We expect marke>ng and sales to merge online, e.g. by promo>ng or selling certain products online only. Offering an online shop with addi>onal items will further broaden the basis of online sales. Expert sales for specialisa9on For companies that are involved in several strategic business fields, it may be important to establish an expert sales unit for the HORECA market. Organisa>on of an expert unit depends on a company’s specific circumstances, of course. Usually 100-‐200 km is seen as the op>mum radius for the ac>vity of sales representa>ves (Chart 8.4-‐4: Area range for sales representa>ves). In this par>cular case, it can make sense for a specialised sales advisor to cover a radius of 300+ km if the area is not par>cularly worthwhile. Addi>onal expenses should be offset by improved know-‐ how in canvassing. Another op>on is to introduce specialist sales on a key account basis to supplement regional sales. We see specialist sales as a superb opportunity for the company to begin specialising in specific business fields. 233 8. Opportuni9es and risks in product design 8.4. Marke>ng and sales Separate exis9ng client business from newly recruited clients In our opinion, rela>onships with exis>ng clients can be permanently supported by online solu>ons which are also of benefit to the representa>ve in the field. At the same >me, it should become rou>ne for a consultant specialised on canvassing, to look through the database of exis>ng clients at regular intervals with the help of the CRM system and/ or the colleague responsible for customer care, in order to generate new business. Lead with goals and numbers This may sound obvious, but in business prac>ce, it isn’t a maier of “opera>onal sales targets have to be set, spelt out in numbers and adhered to“. The right thing would be to aiach them to bonus systems. Sales staff needs tools for canvassing Innova>ng services and products together with campaigns are another element to keep sales moving and mo>vated. We oHen no>ce that targets for sales are generally raised by, for example, a requested increase in turnover by 10%, without considering the opera>onal basis or providing sales staff with new ways and means to achieve the goal. A successful sales representa>ve either has an outstanding product to offer or he must be provided with instruments which enable him to call on a client again and again. In this respect, one of the most important tasks of sales and company management is to create the prerequisites and reasons for calling on clients. 234 8.4 Marke9ng and sales Chart 8.4-‐1 Internet development The internet becomes the most important marke9ng plaworm communities integration of functions strategic web marketing web 2.0 SEO animation flash dynamic websites with database CMS open source Websites are more than an internet catalogue statics websites 1985 Source: Sauldie 2007 1990 1995 2000 2005 2010 2015 Time 235 8.4 Marke9ng and sales Chart 8.4-‐2 Search engines as nodes Control the informa9on about your company that is available on the Internet Source: Sauldie 2007 236 8.4 Marke9ng and sales Chart 8.4-‐3 Diverse forms of expression in the internet Online marke9ng has to be organised strategically blogs communities website Strategisches Strategic Internet Internet marketing Marketing online Newsletter feedback vidcasts podcasts online shop forums/ Newsletter Newsletter Wikis newsletters partner pages banners Newsletter SEO/SEM domain 237 8.4 Marke9ng and sales Chart 8.4-‐4 Area range for sales representa>ves A radius up to 200 km is considered the op9mum for field service Area range for sales representatives 11% 34% up to 100 km up to 200 km 55% more than 200 km Source: Böiger 2007 238 9. New business porwolios and service models 9.1 Comprehensive tex>le management From tex9le procurement to tex9le management Tex>le services are entering a development phase in which the laundry, as the central value crea>on process, will shiH further into the background, while comprehensive tex>le management becomes the core of the services for hotels, restaurants and catering companies. It is already possible for a hotel to leave everything to a tex>le service. The hotel only has to select the tex>les required and determine the frequency of supply. The progress of informa>on and communica>on technology, however, already allows for far more transparency and varia>on than is currently u>lised. It is the basis for transparent contracts which are easy to account for, and is expected to deal increasingly with tex>le management. The top companies in tex>le services are expected to turn service into management. The final step of the vision makes it conceivable that a hotel or hotel chain could give its tex>le service provider a budget and a free reign, on the basis of a framework contract. It is also conceivable that this could happen without involving a specific laundry. Tex>le management companies that do not run a laundry, but purchase laundry services, already exist. Op9mising tex9le stocks Op>misa>on of tex>le stocks is crucial. A larger than op>mum quan>ty of items is generally accepted. The reasons, among other things, are that some clients keep their own linen rooms stocked as a maier of precau>on, and that considerable numbers of towels, facecloths and bathrobes are lost due to theH. Good tex>le management will endeavour to keep stocks trim and thereby contribute to the best possible u>lisa>on of invested resources. 239 9. New areas of opera9on and service models 9.1 Comprehensive tex>le management Let us assume, by way of a perfectly realis>c example, that a tex>le service provider handles 25,000 towels per day, each towel comes to the laundry twice a month and 10% of the towels disappear in that cycle. If the price per towel is 3 Euros, losses amount to 15,000 Euros per month and 180,000 Euros per year (Chart 9.1-‐1: ROI model for RFID). Verified figures on the percentage of dwindling stocks are not available. Figures based on prac>cal experience vary between 5% and 40%. The tex>le service provider has to replenish its stock and will add part of the cost to its prices. In view of the level of damage, one of the most important tasks of tex>le management in the HORECA market is to keep losses in check. The two main reasons for dwindling stocks are theH and reserves kept in linen rooms. Fight against losses is the most important reason for introducing flatwork RFID RFID technology is a suitable tool for the baile against dwindling stocks. According to leading suppliers, e.g. Deister Electronic, this is currently the main reason why tex>le service companies and hotels introduce RFID for flatwork. Among the first and s>ll important uses of RFID in the retail tex>le trade is the preven>on of theH. Items are tagged and if the tag is not removed by the cashier, an alarm goes off at the exit. A golf hotel tried the same method with its bathrobes. When a guest checked out, his luggage was carried past a reader. If the discreet alarm made staff aware that a tagged robe was in the luggage, the guest was asked whether the robe should be added to his bill. The essen>al, systema>c result of using RFID, however, is that inventory can be made visible at any of the points equipped with readers or monitored with mobile readers. 240 9. New business porwolios and service models 9.1 Comprehensive tex>le management This usually happens at the point where goods come into the laundry and at the point of dispatch/storage, but it can also be done at the hotel when goods are collected or delivered. Stocktaking with RFID is basically possible at any >me and accounts for every single piece. The comparison of incoming and outgoing goods shows weekly or monthly dwindling – not only the figures, but also at which point which items disappeared. Case studies have shown that increased transparency alone has led to a significant decrease in dwindling stocks because housekeeping and tex>le services know where they should look for missing pieces. This effect increases further if guests are made aware of the logis>c registra>on of hotel tex>les. RFID suppliers such as Datamars or Deister Electronic believe that dwindling of stocks can be expected to drop by 50%. Precau9onary reserves can be reduced Preven>on of theH is not the only target in the baile against dwindling stocks. Precau>onary reserves kept by housekeepers in their linen rooms, represent en>rely ra>onal behaviour, because it is always possible that the tex>le service provider is unable to deliver on >me or that the delivery is not correct. If the housekeeper has no reserves in such a case, and no partner hotel can help her out, she is perceived to be a bad manager. RFID not only records the available reserves in linen rooms, however. If it is also used to check before orders are dispatched from the laundry, the error margin will drop, rendering at least one of the main reasons for precau>onary reserves obsolete. Tex9le management opportuni9es through the tracing of individual pieces The use of RFID offers many more opportuni>es: -‐ The lifecycle of each individual piece can be followed. An analysis of lifecycle paierns could show, for example, that certain tex>le construc>ons in sheets are more durable than others. If the price is the same, it would be logical to opt for the more durable variety when replacing linen. 241 9. New business porwolios and service models 9.1 Comprehensive tex>le management -‐ Tex>le suppliers can be compared in terms of product performance -‐ Laundries can be compared while in opera>on and laundry processes while in full progress. -‐ Tex>le consump>on of clients, i.e. hotels or restaurants, can be compared and differences in performance can be improved. The various analyses and comparisons provide sugges>ons for the improvement of tex>le management. The first steps of these and similar services are already offered in tex>le procurement for the health sector. This is also expected to happen in the HORECA market, with the goal of providing beier support to the client in terms of material performance whilst offering the best possible prices and s>ll making profits. Is it worthwhile installing RFID? One of the crucial ques>ons is whether it is really worthwhile to complement or altogether replace the reasonably priced barcode system with RFID. Deister Electronic has presented a working model for discussion. Chart 9.1-‐1 (ROI-‐ Modell1 for RFID) shows a modified version. Let us take another look at the assumed annual loss of 180,000 Euros through dwindling stocks. If the use of RFID could reduce stock losses by 50%, losses would drop by 90,000 Euros. According to Deister, this is the approximate cost of installing RFID. This means that in terms of prevented losses alone, the investment would have amor>sed within just one year. Other advantages, such as savings achieved through automa>c stocktaking, have not been taken into account. 242 9. New business porwolios and service models 9.1 Comprehensive tex>le management Tex>le service providers oHen experience the added problem of laundry bins disappearing. Assuming that 500 bins are needed to move the towels and about 5 bins (1%) go missing, the addi>onal loss amounts to 750 Euros. Stocktaking by RFID pushes savings to 121,000 Euros per year, while the amor>sa>on period for the RFID system drops to 9 months (Chart 9.1-‐2: ROI model2 for RFID). All of this has to be seen as a working model which needs to be adjusted to respec>ve opera>onal reali>es. But since the figures and the structure are based on experience, the model provides an idea of what should be paid aien>on to and it is also a star>ng point for realis>c calcula>ons To summarise: Investment costs for tracing individual items by RFID amor>se within about one year due to the reduc>on in stock losses alone. Tracing also offers other useful informa>on that may be used to expand into comprehensive tex>le management for the client. 243 9.1 Comprehensive tex9le management Chart 9.1-‐1 ROI model for RFID If inventory losses alone are reduced by 50%, a medium-‐sized laundry is able to achieve a Return on Investment (ROI) of approx. 11 months for the RFID investment This model is based on unpublished general considera>ons at Deister Electronic 244 9.1 Comprehensive tex9le management Chart 9.1-‐2 ROI model2 for RFID The amor9sa9on period decreases if loss preven9on is prac9sed with linen bins and stock opportunity costs This model is based on unpublished general considera>ons at Deister Electronic 245 9 New business porwolios and service models 9.2 Service diversifica>on for the HORECA segment Diversified services to improve penetra9on of the market and the client poten9al With regard to HORECA clients, the development of tex>le services – individual companies or the en>re sector – could reach their limits at some stage, if client poten>al is largely exhausted or if some clients and regions permanently back off from the offers made by tex>le services. This causes us to pose ques>ons as to whether different services should be offered to hotels or restaurants. These ques>ons are also raised because other service providers, e.g. facility management services, offer a variable range of services and different solu>ons to their clients. Some facility management services help with washing machine capaci>es or room cleaning, for example, if a hotel’s own capacity experiences a sudden boileneck. Catering companies also offer other services, such as facility management or room cleaning. One example is Sodexho, an interna>onal company based on catering services and specialised in individual solu>ons which range from housekeeping to construc>on management. Another example is Ini>al, a company that started as a tex>le service for hand towels, which has grown into a corpora>on of very different services, from tex>les to hygiene, plants and logis>cs (Chart 9.2-‐1: Diversified services at Rentokil Ini>al). Client or product development? Diversifica>on strategies based on exis>ng business usually try to build on synergies: addi>onal services or products are offered to exis>ng clients, or exis>ng products are offered to new clients. Aiempts to expand by offering new products to new clients are mostly seen as too risky or too expensive. Exis>ng businesses or companies are usually approached instead (Chart 9-‐2-‐2: Basic principles of diversifica>on). 246 9 New business porwolios and service models 9.2 Service diversifica>on for the HORECA segment With regards to the HORECA market, diversifica>on is a means of improving penetra>on and suppor>ng clients with more than tex>le procurement alone. This is also important because many hospitality businesses are trying to cut down on the number of suppliers and partners. By offering addi>onal services, the partnership and the service provider’s importance to the client would be strengthened. Exis>ng experience and exper>se with the client or group of clients serves as the basis for the expansion of services. Are there synergies in providing services? Among the strategic alterna>ves of diversifica>on, this means that new products have to be developed for the company and launched on the market. A crucial ques>on is: “What type of synergies can be achieved with the new product?“ Synergies could immediately have posi>ve effects on the u>lisa>on of the company‘s own resources and thereby on the costs, and this would increase credibility in the eyes of the clients. Washroom services are an example of certain synergies in service provision. Washroom services largely work with products that have nothing to do with laundering and are mainly seen as a cleaning service, i.e. soap dispensers, paper towels, towel rolls etc. can be checked and replenished by the cleaner. Responsibility for stock management can be the responsibility of a tex>le service or an industrial cleaning company. If towel rolls are used, the tex>le company can also act as a supplier. But the crucial part of value crea>on is toilet cleaning, not towel rolls. Nevertheless, there are possibili>es, not least of all, because market penetra>on of tex>le services is rela>vely high in the washroom segment – especially when it comes to hotels and restaurants at the higher end. 247 9 New business porwolios and service models 9.2 Service diversifica>on for the HORECA segment There are other areas of business that tex>le services can enter by providing and managing consumable supplies, from taking care of first-‐aid materials -‐ like CINTAS does in the US for example – to vending machines for beverages and snacks installed in modest hotels and guesthouses. Synergies for areas further removed from tex>le services, e.g. room cleaning or breakfast or restaurant catering, are rather limited in our opinion. Job descrip>ons and necessary qualifica>ons are totally different for industrial cleaning companies and catering services from what they are for tex>le services. This also applies to their tools and shiHs. That means that investments are required as for a new, different line of produc>on. It would not be a natural development with tex>le services as the star>ng point (for more details see Böiger 2008, p. 92 pp.). Market exper>se and client rela>ons nevertheless provide a good basis for developing customer-‐oriented services. Client synergies and a measure of produc>on synergies can improve investment profitability and diversify a company’s risks. But the investment risk remains and each company has to make its own decisions in this regard. Low threshold for entering the market – low threshold for exi9ng the market Due to the fact that thresholds for entering the market are calculable for many services, small and medium companies are in a good posi>on to expand their range. An example is Böhm, an industrial cleaning company with a staff of 220, which offers a number of different services– from tex>le services for the table linen of hotels and restaurants to carpet cleaning and housekeeping for hotels and guesthouses (Chart 9.2-‐3: Medium-‐sized enterprises with diverse range). 248 9 New business porwolios and service models 9.2 Service diversifica>on for the HORECA segment Thresholds for exi>ng the market are not high either, because the investment intensity of many services is low, i.e. expensive machinery, which must be financed and paid for over a long period of >me, is rarely needed. Therefore it is rela>vely easy to exit a market or service that has not performed as expected. The biggest risk could be the damage that the company’s good name suffers among the HORECA clients. Bocom-‐line Diversifica>on into other hotel-‐related services, such as room cleaning, is an op>on open to both large and small tex>le service companies. It has to be kept in mind that these are business areas in their own right, resul>ng in rela>vely low synergies. But they can boost the business rela>onship and the importance of the service provider to the client. Risks are calculable, which should prevent over-‐u>lisa>on of resources. The strength of outsourcing as a service lies in specialisa>on rather than in diversifica>on. 249 9.2 Service diversifica9on for the HORECA segment Chart 9.2-‐1 Diversified services at Rentokil Ini>al A tex9le service that has grown into a large, diversified service company Source: www.rentokill-‐ini>al.com 250 9.2 Service diversifica9on for the HORECA segment Chart 9.2-‐2 Basic principles of diversifica>on Seen from the HORECA market’s perspec9ve, new products need to be developed Products existing new existing market penetration product development new market development product/ market development Markets 251 9.2 Service diversifica9on for the HORECA segment Chart 9.2-‐3 Medium-‐sized enterprises with diverse range Böhm, a medium-‐size company, offers many services – also for hotels -‐ from a single source Source: www.boehm-gebauedereinigung.de 252 9. New business porwolios and service models 9.3 New contract models Prerequisites and necessi9es for cos9ng of services become more detailed As clients become increasingly familiar with their tex>le service’s opera>ons, contracts will be oriented more closely to “countable” ac>vi>es. In other segments of the tex>le and clothing industry, it is really common for big clients to be well-‐versed with the calcula>on base of their suppliers. Not because the suppliers reveal them of their own accord, but because the customers know the business so well. This will apply increasingly to tex>le services as well, for the following reasons: - Outsourcing of linen procurement was the first step towards saving costs and increasing its prac>cal use. This type of outsourcing is now becoming more efficient. - Some clients experience such extreme cost pressures that they con>nually check the price-‐performance ra>o. - Due to increasing use of RFID for flatwork, which is s>ll more common in health services than in the HORECA markets at present, tex>le services companies are becoming familiar with accoun>ng per individual item and completely new contract models that boost compe>>veness. Consul9ng and accoun9ng based on partnership Tex>le services of the future will be based on a closer partnership than now, star>ng with advice to clients on the financial consequences of tex>le procurement op>ons. Clients will increasingly expect the tex>le service company to be able to give such advice, substan>ated by empirically valid benchmarks. Based on that, tex>le services are expected to set up and maintain tex>le procurement management for hotels along clearly defined lines, including for example: - xy items of bed linen, towels, table linen per guest - lifecycle of 4 years - costs xy% lower than in the first year of the contract - cost difference of xy% compared to similar hotels 253 9. New business porwolios and service models 9.3 New contract models The >mes of poten>al oversupply through too many sets of tex>les are drawing to a close. Transparent informa>on on the eco-‐social dimension of linen procurement is also important, because it helps the hospitality business to achieve substance goals (beyond the primary profit goal), and so is informa>on on the advantages of the selected quality of linen in terms of hygiene and health. Culture of open communica9on and informa9on will become fundamental Hotels and restaurants want a trustworthy partner to reduce their workload in the most transparent and comprehensive manner possible. Tex>le service companies are expected to become more flexible with their contracts. In >mes of less favourable economic condi>ons, the dura>on of contracts will increase and efforts will be made to prolong the lifecycle of tex>les, or they will be used for longer. There will also be a modular concept, however, because hotels, restaurants and catering companies require different ranges and depths of services. Non-‐ tex>le modules could also be included. Contracts will be drawn up more individually, taking the client’s circumstances into account. More than ever before, long-‐term client rela>ons of mutual trust will become the basis of coopera>on. A culture of open and transparent communica>on is important in order to nurture trust. 254 10. Market development scenarios A damper on demand as a whole As seen earlier, arrivals in the hospitality business and turnover in gastronomy are mainly affected by overall economic development (Chapter 4: HORECA markets in Europe). Assessments of the economic development in Europe currently have a crumbling base. The economic and financial crisis of 2008/2009 was overcome because some countries and the European Central Bank prevented the collapse of the financial system by takeovers, capital and credit injec>ons and the buying of securi>es of dubious value. Economic decision makers came out of their state of shock in 2009. This did not last, however, because fundamental economic reforms -‐ such as labour reforms -‐ were not immediately tackled in some countries, e.g. Italy, and because the crisis further increased the problema>c level of public debt. Investors lost trust in the ability of some countries to service their debts, forcing them to slash their public expenditure. This has put a damper on the economic demand as a whole. Crumbling development But most importantly, the debt crisis of individual EU countries has turned into a crisis of confidence in the Euro as the currency of 11 countries. The break-‐up of this monetary union is seen as a very real possibility by the Interna>onal Monetary Fund and numerous analysts, causing considerable uncertainty when it comes to investment decisions. Added to that, scaled down public demand has a nega>ve impact on economic growth, not only for the members of the monetary union but also for Denmark and Switzerland. A break-‐up of the monetary union would have far-‐reaching consequences that cannot be illustrated by evolu>onary forecas>ng models and evalua>ons. This is the reason why assessment of medium-‐term development is currently subject to considerable uncertainty. 255 10. Market development scenarios Summing up against the background of current condi>ons within the EU 27: (1) GDP growth is the decisive factor for the HORECA markets (2) Growth rates of arrivals in the accommoda>on business showed less change than GDP (3) Growth rates in gastronomy also showed less change than GDP (4) Growth rates of tex>le services for the HORECA segment remained posi>ve even during the 2009 crisis; they are the highest, and are permanently above those of arrivals (Chart 10-‐2: Comparison with growth rates of tex>le services) Economic condi9ons less favourable in 2012 and 2013 In 2012 and 2013, GDP growth is expected to be less than in 2011 in all countries of the EU27. According to OECD and IMF forecasts. 2013 will be more favourable than 2012, however (Chart 10-‐3: Comparison of GDP growth rates). The two largest na>onal economies considered in this study are at opposite ends of the scale: nega>ve nominal GDP growth is expected for Italy in 2012 and 2013, while the largest growth rates in both years are forecast for Germany. On the whole, posi9ve impulses for tex9le services in the HORECA market On the whole, prospects for growth in tourism are posi>ve. 2012 will be weaker than 2011, but levels will not drop to those of the 2009 crisis year, when growth slumped to -‐5.7% and was nega>ve in both Germany (-‐4 %) and Italy (-‐3 %) as well. Tex>le services for the hospitality business s>ll recorded posi>ve results that year. Italy will show nega>ve growth again for 2012, but according to IMF forecasts, the EU as a whole will not shrink. Therefore we also expect that tourism will not decline, but rather pick up again in 2013. 256 10. Market development scenarios Posi9ve growth rates for tex9le services Tex>le services have achieved annual growth rates of more than 3-‐4% with clients in the HORECA market since 2006, except for 2009, the year of dis>nctly nega>ve GDP growth throughout Europe. Tex>le services s>ll managed marginally posi>ve growth even in that year. For the medium term, we expect that tex>le services will show structurally larger growth than GDP and tourism. The reason is the profitable business model, which has not yet reached its limits. On the contrary, it is par>cularly suited to large hotels and city hotels where the dura>on of stays is short. Even in difficult >mes, condi>ons are s>ll rela>vely favourable for both segments of the HORECA market, at the cost of other sec>ons of the market as a whole. Therefore we expect tex>le services for HORECA clients to grow within the range of 2-‐4% in the coming years (Chart 10-‐4: Tex>le services turnover growth un>l 2015). Forecasts for weaker countries like Italy are par>cularly difficult, because the Italian economy is currently in a process of adapta>on and may show very low GDP growth for a few years. This would also affect tex>le services, even though Italy has a high percentage of foreign visitors. But the largest country included in this study, Germany, will be able to counterbalance some of the problems. Tourism on the whole is seen as a growth sector in the medium term. A growth range of 2-‐4% for tex>le services therefore seems to be a sound basis when making business decisions. 257 10. Market development scenarios Chart 10-‐1 Economic growth by country Except for Italy, nominal GDP growth is expected for 2013 GDP growth 2012 and 2013 in % NL DK CH BE 2013 AT 2012 IT DE EU -‐2 -‐1.5 -‐1 -‐0.5 0 0.5 1 1.5 2 2.5 Source: IMF, OECD 258 10. Market development scenarios Chart 10-‐2 Growth rates compared to tex>le services Tex9le services show the structurally highest growth Comparison of growth rates EU 27 8.00% 6.00% 4.00% 2.00% TS HORECA GDP EU 27 0.00% 2007 -‐2.00% 2008 2009 2010 Arrivals EU 27 Gastronomy turnover EU 27 -‐4.00% -‐6.00% -‐8.00% Source: IMF, OECD 259 10. Market development scenarios Chart 10-‐3 Comparison of GDP growth rates General improvement of economic growth is expected for 2013 GDP growth rates of selected countries 8.00% 6.00% 4.00% DE CH* 2.00% AT DK 0.00% 2007 2008 -‐2.00% -‐4.00% 2009 2010 2011** 2012** 2013** IT NL BE EU 27 -‐6.00% -‐8.00% Source: Eurostat, *FOS, **OECD 260 10. Market development scenarios Chart 10-‐4 Tex>le services turnover growth un>l 2015 Tex9le services’ turnover in the HORECA market will con9nue to grow Turnover growth HORECA un9l 2015 3700 3600 Grow th r 2 to ange fro 4% p m .a. 3500 3400 konserva>ve ariante conservativeVversion 3300 op>mis>sche Variante optimistic version 3200 3100 3000 2900 2011 2012 2013 2014 2015 Source: own calcula>ons 261 11. Typical business strategies Clear analysis of strategic business segments is needed Experience has shown that tex>le services are best able to understand and analyse the demand-‐driven market if it is divided into strategic business segments, i.e. clearly dis>nguishable product and market combina>ons. In general terms, the markets consist of three client groups: on the one hand, hotels and other types of accommoda>on businesses, restaurants and catering services, and on the other hand, products. We dealt with the products in Chapter 7. Strategic business segments are shown in Chart 11-‐1 (Strategic business segments). The clear separa>on of the client and produc>on perspec>ves helps to analyse how the requirements of markets and client groups change and how rendering of services must be adjusted. Our assessment of general perspec>ves for tex>le services, with regard to the market segments defined, is shown in the charts illustra>ng SHL perspec>ves (Charts 11-‐4 & 11-‐4). While we expect a brief period of weaker condi>ons for some countries in southern Europe, general prospects are nevertheless favourable in the medium term for these countries as well. Annual growth rates should be 2-‐4%. The effect on the various business segments of the HORECA market differs, however. Prospects for some segments are beier than for others (Chart 11-‐2: Differing perspec>ves of strategic business segments). Acrac9veness of strategic business segments has to be evaluated per company This first, growth-‐related look at business segments must be specified in more detail for each company: in terms of the airac>veness of the market served by the company and the company’s compe>>ve posi>on. More concretely one would, for example, have to look at the airac>veness of the hotel market in Venice with regard to workwear and at the compe>>ve posi>on that the company holds in the Vene>an market. 262 11. Typical business strategies A market analysis and the individual prerequisites of the company are brought together in rela>on to the compe>>on. Considera>ons of future business alignments can be based on the result. Airac>veness of the markets to be defined in detail must be determined with about 5 to 10 criteria such as growth, entry thresholds, size of clients, number of clients etc. One’s own posi>on in this specified market must also be assessed according to 5-‐10 criteria such as technical equipment, cost structure, advantages of products and services etc. Strategic decisions always depend on the company The combina>on of market airac>veness and compe>>ve posi>on is always specific to a given company and cannot be generalised. The market for table linen for restaurants in the provinces of the Western Netherlands is usually not very airac>ve, for example. The main reason is the rela>vely small number of high-‐end restaurants which consider table linen to be important. But if a company opera>ng in this market has a strong posi>on in rela>on to the compe>>on (Chart 11-‐3: Defining the posi>on for SHL [sports, health, leisure], that posi>on should be u>lised and defended (Chart 11-‐4: Norm strategies for SHL). It is also advisable, however, to gradually shiH the company‘s ac>vi>es in order to secure its future in more airac>ve business segments. Exact cost analysis is a macer of survival in fierce compe99on We know that neither stringent inspec>on of business segments nor meaningful calcula>on of costs are always standard procedures in medium-‐size companies opera>ng in growth sectors such as tex>le services. By defining relevant cost items, it should be possible to define contribu>on margins for the various business segments. A company should know the contribu>on margin that is made in the business segment of workwear for hotels and the margin for restaurant workwear, and how the two margins differ (Chart 11-‐5: Profitability of business segments). 263 11. Typical business strategies Only on this basis, does it really make sense to plan ac>vi>es and investments for the individual business segments. If the cost structure of the business as the core of the compe>>ve posi>on is clear, decisions on further developments can be taken much more accurately and with less risk. Specialist or all-‐rounder? One of the crucial decisions is whether the company wants to be ac>ve in several business segments and is capable of this or whether it wants to concentrate on just a few segments and available resources. These ques>ons have to be asked at regular intervals, especially in growing markets, in order to keep the company focused on a high-‐profit course. It can make sense to offer just a few highly specialised products and target big clients, providing a type of service which less specialised companies cannot match. It can be just as promising, however, to concentrate on a region and accept even small orders. These decisions usually depend on the structure and quan>ty of one’s own resources. But when it comes to long-‐term strategic success, specialists tend to be more successful than generalists. Yield or cost orienta9on The other crucial ques>on is whether the company is looking mainly towards a favourable cost structure or at its compe>>vely priced products and services as its compe>>ve edge, in order to u>lise profit poten>als via beier prices (Chart 11-‐6: Compe>>ve orienta>on). The compe>>ve orienta>on selected by the company must be promoted in all essen>al company func>ons, especially the primary value crea>on func>ons. 264 11. Typical business strategies Future chances and challenges are found in all business func9ons In Chapters 8 and 9, we looked at various future challenges and chances along the value crea>on chain of tex>le services in the HORECA segment. Their importance differs from company to company. In some cases, new instruments are already being applied, in others they are not suitable due to the size. In any event, they are part of developments that each company has to examine for its own use, in order to be successful with its basic strategy. 265 11. Typical business strategies Chart 11-‐1 Strategic business por€olios The HORECA sector involves numerous strategic business segments Clothing Service Kitchen Flatwork Bed Bathroom Table Kitchen Washroom Mats Other Hotels Guesthouses etc. Restaurants Caterers 266 11. Typical business strategies Chart 11-‐2 Differing perspec>ves of the business por€olios Most business porwolios have a favourable growth outlook in the medium term Clothing Service Kitchen Flatwork Bed Bathroom Table Kitchen Washroom Mats Other Hotels Guesthouses etc. Restaurants Caterers 267 11. Typical business strategies Chart 11-‐3 Defining the posi>on for SHL [sports, health, leisure] What is the posi9on of our SHL segment? A t t r a c t i v e n e s s o f m a r k e t Own compe99ve strength Strong Medium Weak High flatwork city hotels workwear hotels Medium Low table linen restaurants 268 11. Typical business strategies Chart 11-‐4 Norm strategies for SHL What are the plans for the sports, health & leisure segment? A t t r a c t High i v e n e s Medium s o f m a Low r k e t Own competitive strength Strong Medium Weak investments for growth selective expansion selective expansion selection/ profit orientation limited expansion defend shift focus secure profits disinvestment defend position 269 11. Typical business strategies Chart 11-‐5 Profitability of business por€olios How profitable are the business porwolios? Excerpt from strategic cost accounting SGF A parameter €/change Price/change 0.75 SGF B % of price parameter €/change 100.00 Purchasing price € 8.50 € 5.00 Set-up € 1.00 € 1.00 Set 3 6 Change per set 1 5 104 104 Tender weeks Tendering Interest rate 0.27 36.54 6% % of price 0.50 100.00 0.069 13.85 6% Interest charges 0.02 2.19 0.004 0.83 Financing costs 0.29 38.73 0.073 14.68 Production costs/item € 0.30 € 0.23 30.20 € 0.30 € 0.27 54.36 Transport costs/item € 0.14 € 0.10 13.50 € 0.14 € 0.12 24.30 Washing rate 75% 90% Total direct costs € 0.33 43.70 € 0.39 78.66 Sum of costs € 0.62 82.43 € 0.47 93.34 DB € 0.13 17.57 € 0.03 6.66 270 11. Typical business strategies Chart 11-‐6 Compe>>ve orienta>on A clear compe99ve direc9on is essen9al for survival C O M Industry-‐ wide P Cost leadership Benefit leadership in all segments in all segments E T I T I O N Special Cost leadership Benefit leadership segment special segment special segment Low costs High costs COMPETITIVE EDGE 271 12. Sector-‐poli9cal conclusions The analyses and contempla>ons presented so far point to various fields of ac>on for sector policies in the HORECA market. This is not about a comprehensive view, but rather about sugges>ons which can be derived from this study. Policy coopera9on with hospitality businesses on associa9on level Customer-‐oriented solu>ons in par>cular will ensure that tex>le services con>nue to develop well. Sector associa>ons could offer a pla€orm for interac>on which would help to come up with interes>ng solu>ons. Possible subjects are, among others: tex>le management for hotels, standards for logis>cs etc. How to increase efficiency within a value crea>on chain is usually a ques>on that should rather be tackled on a cross-‐company and cross-‐sector level. Even more so if the companies within the sector are rather small and do not have the resources and teams to develop and execute pilot projects. Coopera>on between tex>le services associa>ons and hospitality associa>ons would be beneficial for both sides. User support for new logis9cs technologies There are two keys to improving logis>c performance: firstly, the latest informa>on and communica>on technology based on the Internet and mobile phones, and secondly the adop>on of RFID for flatwork. Associa>ons could promote the exchange of views and ini>ate informa>on and development projects shared by the sectors. Sustainability In 2010/2011 the German intex associa>on organised a campaign to promote sustainability in tex>le services and their value crea>on chain. The German tex>le services industry thereby took a very clear stand. Similar ac>on, focused on the hospitality business, would also be a good idea in other countries and on EU level, for hotels and restaurants to dis>nguish themselves by choosing the specific advantages offered by tex>le services with regards to sustainability over other procurement solu>ons. 272 12. Sector-‐poli9cal conclusions Promo9ng hygiene Against the background of increasing globalisa>on of tourism and increasing aien>on by the individual to his own health, it is important to reassure travellers, especially long-‐distance and elderly travellers, with high standards of hygiene. Many accommoda>on businesses and gastronomy companies s>ll find it difficult, for example, to implement the EU food regula>ons with ease. This opens up two opportuni>es: (1) Tex>le services associa>ons and their members could highlight the hygienic aspects of procurement through their tex>le services in comparison to others, and come up with sugges>ons for improvement. (2) Poten>als could be explored for offering hygiene services to smaller hospitality companies, in addi>on to tex>les. This service could start with a hygiene check and lead to the coordina>on of hygiene management. Coopera>on with hospitality associa>ons and the housekeepers‘and waitrons‘ associa>ons would also be a good idea in this respect. In general, it must be determined whether sufficient training opportuni>es exist for tex>le services, but this is a subject beyond the scope of this study. 273 13. Selected countries This study looks at the European market, paying par>cular aien>on to Austria, Belgium, Denmark, Germany, Italy, the Netherlands and Switzerland. Therefore, some of the previous chapters contain figures and details related to these countries. In the following sec>on, each country is briefly presented on its own. The focus is on the accommoda>on business, because it is by far the largest market for the ac>vi>es of tex>le services in all countries under considera>on. For the purpose of analy>cal simplifica>on, we have created a number of Key Performance Indicators with which the countries can be compared at a glance, e.g. tex>le services turnover per arrival (Chart 13-‐1: Comparison of Key Performance Indicators). This allows for a quick overall picture, but more comprehensive results usually need more detailed work. To a certain degree, this has been accomplished in the individual country sec>ons. Nevertheless it must be considered that this study does not refer to any country specifically but should be seen as an overall view. 274 13. Selected countries Chart 13-‐1 Comparison of Key Performance Indicators Highest significance of tourism and HORECA tex9le services in Italy Country Tourism Tourism employees Arrivals Tex>le Beds services (TS) TS/arrival % of GDP i% of total million million million € TS/overnight stay TS growth un>l 2015 % p.a. € IT 3.9 4.5 79.79 4.70 850 10.65 2.25 1 to 3 DE 2.2 2.3 134.54 3.29 626 4.65 1.92 2 to 4 CH* 5.8 7.8 16.20 0.28 150 9.26 4.21 1 to 3 AT 4.1 4.5 29.23 0.96 120 4.10 1.22 2 to 4 NL 2.7 2.9 30.00 1.20 100 3.33 1.18 2 to 4 BE 2.4 2.6 12.99 0.37 75 5.77 2.48 2 to 4 DK 2.9 3.7 5.84 0.39 46 7.88 1.70 2 to 4 Source: World Economic Forum, interviews, own es>mates and calcula>ons;*CH: model, hotels only;TS = tex>le services 275 13. Selected countries 13.1 Belgium HORECA accounts for the largest cut of the business Including dry cleaners and laundries of all sizes, Belgium’s tex>le care sector consists of almost 700 companies. In 2010, the sector showed a turnover of 582 million Euros. No separate figures are available for tex>le services. Subsequently, there is no quan>ta>ve analysis of tex>le services with HORECA clients either. Total turnover of 20 laundries, each of which shows a turnover of at least one million Euros, was 270 million Euros in 2010. Ini>al Tex>les, the absolute market leader, accounted for 103 million Euros alone. The second largest company in this group of 20, Sterima Vanguard, achieved a turnover of 25 million Euros. We es>mate that turnover with HORECA clients accounted for about 25 to 30% or some 70 to 80 million Euros in 2010. 2009: dis9nct growth instead of crisis The 2008 to 2010 growth paiern of the large laundries differed from that of other countries. Whereas 2009 was the height of the crisis in other countries, the large laundries in Belgium showed a dis>nct rise in turnover: 4.7%, up from 1.2% in 2008. The crisis was only felt in 2010 when turnover dropped by 1.4%. This applies to the 20 large laundries as a whole (Chart 13.1-‐1: Growth of large Belgian laundries). Pre-‐tax results showed a similar paiern. The net sales margin as a percentage of yields was a noteworthy 6.4% in 2009, but dropped to 4.5% in 2010 as turnover declined (Chart 3.1-‐2: Net sales margin of large Belgian laundries). Declining turnover and margins were experienced by companies that are ac>ve in the HORECA market as well as those specialising in health & care or commercial businesses. 276 13. Selected countries 13.1 Belgium Fierce structural compe99on Compe>>on among tex>le services in Belgium is very fierce. One of the reasons is the way they are structured in size. Apart from Ini>al Tex>les, which holds a market share of 35% and covers the whole country with regional branches, there are a handful of companies with a turnover of about 20 to 30 million Euros. Experience has shown that a set-‐up like this is highly compe>>ve because it oHen combines flexibility and strong customer orienta>on with the financial opportunity for targeted and very effec>ve investments in quality and produc>vity. In many cases, it is a maier of standing out from among the smaller compe>tors that usually base their strategy on extreme customer orienta>on and highly compe>>ve prices. In this climate, the margin is constantly challenged by compe>>on alone. Furthermore, at present the Belgian HORECA segment in par>cular is dis>nctly characterised by excess capacity. Recovery of hospitality business did not show in 2010 The Belgian economy has recovered since 2009 and expects to see growth in 2012 and 2013. The expected growth rate of 0.4% in 2012 is close to stagna>on, however, and the 1.3% forecast for 2013 is not par>cularly significant either. But compared to the difficult situa>on in southern Europe, it s>ll looks rela>vely good and should not have a dampening effect on the demand for services offered for accommoda>on and gastronomy businesses. 2010 was characterised by the hospitality business pu[ng on the brakes as a late reac>on to the 2009 crisis. Regarding tex>le services, the posi>ve trends already seen in the accommoda>on market in 2010 were overcompensated for by counterac>ng the strong increase in demand in the 2009 crisis year. Tourism on the whole does not play a very big role in the Belgian economy. The 2.4% share in GDP and 2.6% in the number of employees are the lowest figures for tourism as part of the na>onal economy aHer Germany. Belgian tourism maintains rather high standards of quality and does not come at a bargain, however. One of the reasons is the high number of foreigners that usually contributes to more demand for hotel accommoda>on. 277 13. Selected countries 13.1 Belgium EU presence boosts tourism standards The fact that Brussels is the seat of the European Commission is a significant aspect of tourism in Belgium. Many associa>ons and companies with close contacts to the EU Commission have also moved to the Belgian capital. The numerous mee>ngs, sessions, discussions and conferences in Brussels are aiended by high-‐ranking and highly qualified people from the 27 EU member states and other countries, resul>ng in above average demand for hotel rooms and restaurants in the greater Brussels area. In addi>on, there are the 25,000 employees of the EU, whose salaries are above average by comparison the the rest of Europe. The gastronomy sector benefits from this. Foreign arrivals are more affected by economic condi9ons than domes9c arrivals Foreigners account for 55% of total arrivals in Belgium. It is true for the whole of the EU, that economic condi>ons affect foreign arrivals more than they affect domes>c arrivals. Against the background of the debt crisis in some countries and the endeavour of most EU member states to reduce their debts, it is not expected that Brussels's EU tourism will have a reverse impact. The tourism ac>vi>es of Belgian ci>zens have developed well. The main reason is that holiday travel increased by 5% from 2008 to 2011. Although only 26% of that is domes>c travel, quan>ta>vely it is s>ll far more than the total of Belgian business travel, which has been subject to severe cuts, but is star>ng to recover from the slump in 2009/2010. On the whole, demand from the accommoda>on sector has improved since 2010 (Chart 13.1-‐3: Demand from the hospitality business). 278 13. Selected countries 13.1 Belgium Improved but low hotel occupancy Hotels are the most important type of accommoda>on business. The average size of hotels has decreased slightly, but many new hotels have opened in recent years. For tex>le service providers, this means that the number of clients has increased. AHer the 2009 crisis, the number of arrivals has also picked up again, which has resulted in a slight improvement in occupancy rates (Chart 13.1-‐4: Condi>ons for demand from hotels). Medium-‐term increase for tex9le services in the HORECA market Based on the weak growth and fierce compe>>on in Belgium, the following can be expected: 1) Turnover of tex>le services will increase in the accommoda>on market because the number of arrivals con>nues to rise; fierce compe>>on will con>nue to squeeze the margin. 2) Two opposite trends are seen for restaurants: business travel has been subject to stricter budget control since the crisis in 2009/2010 and longer, which to some extent is an obstacle for turnover. Growing emphasis on hygiene, however, results in small posi>ve impulses. 3) On the whole, medium-‐term growth of tex>le services will be stronger than that of arrivals and GDP, because tex>le services represent an extremely useful model for outsourcing. In order to stand their ground against the all-‐rounders, it will be very important for tex>le services to specialise in the HORECA segment and come up with unique selling proposi>ons (USPs), which offer prac>cal and financial advantages to the hospitality business. 279 13.1 Belgium Chart 13.1-‐1 Growth of large Belgian laundries 20 large Belgian laundries suffered in 2010 aYer vigorous growth during the crisis year of 2009 Growth in % 6 5 4 3 2 1 0 -‐1 2008 2009 2010 -‐2 Source: Stratellia 2012 280 13.1 Belgium Chart 13.1-‐2 Net sales margin of large Belgian laundries Compared to 2009, pre-‐tax results viewed in % of proceeds, dropped in 2010 Net sales margin % of proceeds 7 6 5 4 3 2 1 0 2006 2007 2008 2009 2010 Source: Stratellia 2012 281 13.1 Belgium Chart 13.1-‐3 Demand from the accommoda>on business The accommoda9on business started to recover in 2010 Total number of overnight stays Total number of arrivals 30.500.000 13.500.000 13.000.000 30.000.000 12.500.000 12.000.000 29.500.000 11.500.000 11.000.000 29.000.000 10.500.000 28.500.000 10.000.000 2007 2008 2009 2010 2002 2003 2004 2005 2006 2007 2008 2009 2010 Foreign arrivals Gross occupancy of beds 7.300.000 7.200.000 7.100.000 7.000.000 6.900.000 6.800.000 6.700.000 6.600.000 37,0 36,5 36,0 35,5 35,0 34,5 2007 Source: Eurostat 2008 2009 2010 34,0 2007 2008 2009 2010 282 13.1 Belgium Chart 13.1-‐4 Condi>ons for demand from hotels Hotels: Slow growth in demand, but increased number of clients Hotel arrivals increase 10.000.000 8.000.000 6.000.000 4.000.000 2.000.000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 Size of hotels decreasing slightly Number of hotels Number of hotels on the increase 64,0 63,0 62,0 61,0 60,0 59,0 58,0 57,0 2.150 2.100 2.050 2.000 1.950 1.900 1.850 1.800 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Eurostat 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 283 13.1 Belgium Chart 13.1-‐5 Comparison of growth rates Moderate GDP growth is also expected from 2011 to 2013. This will have a posi9ve effect on the demand for tex9le services. Growth rates in % 7.00% 6.00% 5.00% 4.00% 3.00% GDP 2.00% Arrivals 1.00% 0.00% -‐1.00% 2007 2008 2009 2010 -‐2.00% -‐3.00% Source: Eurostat 284 13. Selected countries 13.2 Denmark The tex>le service and laundry sector in Denmark consists of 77 companies. Between 2004 and 2008 it showed a nominal growth of 14%. At the same >me it went through a dis>nct process of concentra>on, i.e. the number of companies as well as the number of employees decreased by approximately 30% (Dansk Markedsanalyse 2011). Costs rose at the same rate and had to be fully absorbed by increased produc>vity. HORECA share at around 15% Danish tex>le services achieved a turnover of 300 million Euro in 2010. The hospitality business – mainly hotels, restaurants and catering services – accounted for 46.3 million Euros or 15.4% (Chart 13.2-‐1: Structure of tex>le services). This percentage is lower than in some of the other countries under considera>on, because the share of hotels in the Danish accommoda>on business is a rather low 45%. Danish tourism is strongly characterised by holiday coiages, which do not have much effect on tex>le services. Furthermore, travellers stay twice as long as they do in Belgium, for example, which also reduces the need for room cleaning services. Recovery of demand in the accommoda9on business since 2010 AHer demand for accommoda>on slumped in 2009, it has already started to pick up again in 2010. Arrivals increased again, albeit not to the level of 2007 and 2008. Seeing that the total number of accommoda>on companies is rising again, and thus the number of available beds, only a slight recovery of occupancy can be expected (Chart 13.2-‐2: Development hospitality business). Supply and demand in the hotel segment follows the same paiern (Chart 13.2-‐3: Development hotels). It is very obvious that the average size of hotels is far above the European average, resul>ng in a strong tendency to make use of tex>le services. 285 13. Selected countries 13.2 Denmark Moderate economic growth 2011 and 2012 were characterised by moderate nominal growth of the economy. A growth rate of 1.4% is forecast for 2013 if the Euro zone does not crumble. The expected increase will be enough to keep the tourism demand stable or boost it a liile. This is also expected to keep the restaurant segment stable. If growth is sluggish, however, the hospitality business will have to balance rising prices and costs with a clear increase in produc>vity. It is not a foregone conclusion that this would be to the disadvantage of tex>le services. It is rather a ques>on of how tex>le services are able to contribute to improving their client’s produc>vity. Intense compe99on The tex>le services sector in Denmark is structured in a manner which s>mulates very intense compe>>on. There are two major companies, Berendsen and De Forenede Dampvaskerier, which have 16 and 12 branches respec>vely, as well as a number of important medium-‐sized companies and a lot of smaller laundries that offer tex>le services. Products for the hospitality business are highly sophis>cated, on the part of both the large tex>le service companies and the small ones, in equal measure. This is proof of the fierce compe>>on. Suppliers also add to it with a considerable range of services. In this environment, each customer and each job order is vied for by intelligent means. Margins are therefore constantly under pressure and services rendered to the accommoda>on business, especially hotels, and to gastronomy are of a very high standard. On the whole it is expected that tex>le services will be able to further improve their products and accordingly share in the medium-‐term growth of the hospitality business within a range of 1-‐3%. 286 13.2 Denmark Chart 13.2-‐1 Structure of tex>le services The HORECA segment accounts for about 15% of all tex9le services in Denmark. Turnover in textile services by segment 2010 in million Euros 350 300 250 200 150 100 50 0 Public facilities Hospitality (incl. HORECA) Trade/financial sector Manufacturing Other Sum Source: Dansk Markedsanlyse 2011 DKR 1 = EUR 0.134 287 13.2 Denmark Chart 13.2-‐2 Development in the accommoda>on business The accommoda9on business started to recover in 2010 Anzahl der Betriebe Number of accommoda9on businesses 1.120 1.100 1.080 1.060 1.040 1.020 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Number of beds Total number of beds 405.000 400.000 395.000 390.000 385.000 380.000 375.000 370.000 Basis: Eurostat 365.000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Eurostat 288 13.2 Denmark Chart 13.2-‐3 Development in hotels Hotels also started to recover in 2010 Arrivals/hotels 4.000.000 3.500.000 3.000.000 2.500.000 2.000.000 1.500.000 1.000.000 500.000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 Beds per hotel Total number of hotels 200,0 Number of hotels 490 485 150,0 480 100,0 475 470 465 460 50,0 Basis: Eurostat 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Eurostat 0,0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 289 13.2 Denmark Chart 13.2-‐4 Comparison of growth rates Moderate GDP growth is also expected for 2011/2012 Growth rates in % 6.00% 4.00% 2.00% 0.00% 2007 -‐2.00% 2008 2009 2010 GDP Arrivals -‐4.00% -‐6.00% -‐8.00% -‐10.00% Source: Eurostat 290 13. Selected countries 13.3 Germany German tex9le services market in good condi9on Tex>le services in Germany showed a turnover of 2.8 billion Euros in 2010. The market is in good shape. Total turnover did not even shrink in the 2009 crisis year, when general economic growth was -‐4.1%, although Germany’s tex>le services sector is much more dependent on trade and industry than that of the other countries in this study. The share of turnover achieved with HORECA clients is es>mated at some 620 to 630 million Euros or about 22% of total turnover, which includes mat and washroom services as well as tex>les for cleaning. Development of turnover achieved with the hospitality business was posi>ve throughout, except for 2009 when growth stagnated (Chart 13.3-‐1: Turnover development). Posi9ve development of demand Arrivals, the most important determining factor of demand for tex>le services, rose steadily -‐ except for 2009, when a drop by 3.2 million (-‐2.4%) was recorded. Foreign arrivals decreased marginally more, by -‐2.8%. This was more than compensated for in 2010, with a rise by 5.5% in total. Overnight stays developed accordingly (Chart 13.3-‐2: Development hospitality business). As the chart shows, the number of overnight stays per arrival decreased. While holiday travel in Germany was barely affected by the crisis, the posi>ve trend in business travel and foreign tourism con>nued in 2011, supported by Germany’s strong economic posi>on within the EU and worldwide. Germany has generally become a more popular tourist des>na>on in recent years. In a comparison of compe>>veness in tourism, conducted by the World Economic Forum, Germany ranked second out of 139 countries in 2012 (WEF 2012). 291 13. Selected countries 13.3 Germany Even the gastronomy turnover increased again in 2011 aHer showing unsa>sfactory results for years. The number of employees in the hospitality business as a whole also rose compared to 2010. Events catering, which is strongly affected by the trade fair business in Germany, dropped significantly in 2009, but recovered in 2010 and 2011 (for a more detailed analysis see Böiger 2012). The catering business on the whole is mainly characterised by community catering in the health & care segment as well as for company staff, and it will expand in the long term. Rising supply capaci9es Increasing demand is matched by increasing supply by the accommoda>on sector. Bed capacity is subject to fluctua>ons, but it is growing in the long term. Since the number of accommoda>on businesses is dropping, occupancy is improving slightly, but the overall level is s>ll unsa>sfactory (Chart 13.3-‐3: Development supply capaci>es). Hotels account for 67% of the accommoda>on business, which is a considerable share. The number of hotels dropped over a period of many years, allowing them to increase in average size. Many new projects are planned, especially by hotel brands and budget accommoda>on chains. Implementa>on partly depends on trends in tourism. The market will be characterised by excess capaci>es in future as well, keeping compe>>ve pressure high in terms of quality as well as quan>ty. The price-‐performance ra>o of the accommoda>on business in Germany is rather favourable. Achieving a good return therefore con>nues to be an on-‐going baile. One of the biggest problems in this context is recruitment of suitable staff and keeping labour costs in check. Good hospitality prospects enable tex9le services to grow Structural increases of 2.2% p.a. are expected for the German hospitality business sector un>l 2020. The number of employees, however, is expected to rise only by 0.6%, because produc>vity has to be increased in order to keep costs under control. 292 13. Selected countries 13.3 Germany This is certainly one of the central star>ng points for tex>le services: to support the hospitality business with cost efficiency in terms of the amount of tex>les required per guest. This is not a maier of simply keeping prices as low as possible, but rather a maier of offering a favourable price-‐performance ra>o. Especially when it comes to performance at a good price, opportuni>es are much beier when a market is growing than when it is in crisis, because then the top priority is to cut costs, even if useful services have to be axed. Broad-‐based efficient compe99on Even if market prospects are favourable, it is not easy for the individual companies of the tex>le services sector to realise their poten>al, because Germany is characterised by s>ff compe>>on. Large and small tex>le services, regional top dogs and affiliated companies are all ac>ve in the HORECA market. They are compe>ng with prices as well as services, and in every region there is at least a handful of companies that can provide new approaches in the compe>>on for HORECA clients, through investments in machinery, processes, systems and products. Efficient compe>>on is s>ll much >ghter in densely populated urban areas. Hospitality business is the core market Tourism plays a lesser role in Germany than it does in the other countries under considera>on. The 2.2% share in GDP is lower than in any of the other countries. Employment accounts for 2.3% of total employment which is also a compara>vely low percentage. In absolute terms however, the hospitality business in Germany is the second largest market examined in this study, aHer Italy. Tex>le services are currently achieving a turnover share of 22% in this core market and there is room for expansion. In fact, various innova>ons are being tested and launched in this market, not only by tex>le services, but also by suppliers. This is a clear indica>on of its development poten>al and the efficiency of its companies, which also shows in the rela>vely high growth rates. 293 13. Selected countries 13.3 Germany Growth rates of tex9le services higher than GDP increase The growth rate that tex>le services achieve with HORECA clients is bigger than the GDP increase, and this is the basis of growth in tourism (Chart 13.3-‐5: Comparison of growth rates). We were also able to show that this applies to tex>le services as a whole (Böiger 2009) and expect a similar trend for the coming years. On the basis described above, our forecast is that un>l 1215, tex>le services will grow by 2-‐4% p.a. in the HORECA market. 294 13.3 Germany Chart 13.3-‐1 Turnover development HORECA The turnover for tex9le services among HORECA clients developed well. The 2009 crisis year was characterised by stagna9on. Turnover HORECA clients in million € 640 620 600 580 560 540 520 500 2006 2007 2008 2009 2010 Source: intex; own calculations 295 13.3 Germany Chart 13.3-‐2 Development in the accommoda>on business Demand develops posi9vely in the long term Total number of overnight stays Total number of arrivals 330.000.000 150000000 325.000.000 100000000 320.000.000 315.000.000 50000000 310.000.000 305.000.000 0 2007 2008 2009 2010 2002 2003 2004 2005 2006 2007 2008 2009 2010 Foreign arrivals 27.000.000 26.000.000 25.000.000 24.000.000 23.000.000 22.000.000 Source: Eurostat 2007 2008 2009 2010 296 13.3 Germany Chart 13.3-‐3 Development of supply capaci>es Supply capaci9es rose while the number of businesses dropped Total number of beds 3.400.000 Accommoda9on businesses 57.000 3.300.000 56.000 3.200.000 55.000 54.000 3.100.000 53.000 3.000.000 52.000 2.900.000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 51.000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Eurostat 297 13.3 Germany Chart 13.3-‐4 Development in hotels Hotels are gebng bigger. The number of hotels is dropping. Arrivals hotels 120.000.000 100.000.000 80.000.000 60.000.000 40.000.000 20.000.000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 Beds per hotel Number of hotels 50,0 39.000 48,0 38.000 46,0 37.000 44,0 36.000 42,0 35.000 40,0 38,0 34.000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Eurostat 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 298 13.3 Germany Chart 13.3-‐5 Comparison of growth rates Growth of HORECA tex9le services is structurally higher than GDP growth rates and arrivals Comparison of growth rates 8 6 P r o z e n t 4 HORECA textile services 2 Arrivals 0 GDP 2007 2008 2009 2010 -‐2 -‐4 -‐6 Source: Eurostat, intex, own calculations 299 13. Selected countries 13.4 Italy Italy’s HORECA segment accounts for almost 30% of all HORECA services in Europe Tex>le services are offered by 780 companies in Italy. According to Assosistema, total turnover in 2010 amounted to 2.3 billion Euros. We es>mate that clients in the hospitality business accounted for a share of some 850 million Euros or 36%. This figure includes flatwork and kitchen workwear as well as mats, washroom hygiene and cleaning tex>les. Italy’s HORECA segment shows the highest turnover of the countries under considera>on, accoun>ng for 28% of the total turnover achieved by European tex>le services in the hospitality business in 2010. The percentage reflects the importance and volume of tourism in Italy. Structure of HORECA market is fragmented Tourism is of crucial importance to Italy. According to the World Economic Forum (2011), the share of tourism in GDP was 3.9% in 2009, clearly above Germany’s 2.2%. The share of tourism employees is a remarkable 4.5%, whereas it is only 2.3% in Germany, the other large market in this study. The structure of the accommoda>on business and gastronomy is characterised by small companies. The number of accommoda>on businesses (150,000 in 2010) is the highest among the countries under considera>on. Only 23% of these are registered as hotels however, which means that the large number includes many small businesses. It is also interes>ng to note that the number of accommoda>on businesses increased during the crisis in 2009, while the number of hotels dropped. This shows that the crises pushed many people into self-‐employment, e.g. opening a guesthouse or offering bed & breakfast in their own home. Market entry thresholds are very low. As a result of the piecemeal structure, efficiency in the accommoda>on business is low while prices are rela>vely high. The same applies to gastronomy. 300 13. Selected countries 13.4 Italy High tex9le service turnover per arrival In 2010, each arrival contributed around 10 Euros to the turnover of tex>le services. The reasons for this top result are: (1) Market penetra>on by tex>le services is high in the accommoda>on business (2) Fine restaurants account for a higher share than in most countries (3) The number of nights per arrival is higher than in other countries (4) The many rather small businesses result in structurally higher prices As for the structure of tourism in Italy, it can be assumed that medium businesses, accommoda>on as well as gastronomy, will become weaker and that the size of businesses will increase. This does not have to be to the disadvantage of tex>le services, however. Bigger hotels and guesthouses, the expansion of hotel chains and even budget hotels should rather boost the demand for tex>le services. It is different with gastronomy. An increase in system gastronomy will have a nega>ve effect on the demand for table linen but a posi>ve effect on the demand for workwear. Weak growth affects tourism in Italy The more important subject in the short to medium term however, is Italy’s struggling economy. AHer a recovery in 2010, economic growth has lapsed into another weak phase, which is expected to last un>l 2013. Nominal GDP is expected to drop by -‐1.7% in 2012 and by -‐0.4% in 2013 (IWF 2012). Since Italy’s debt crisis is a major reason for the slump, adjustments will be made, not only in the private economy, but also in the public and fiscal sectors. Personal income will be affected no>ceably and will in turn result in a decrease in domes>c tourism. Italian business travel dropped by 22% in 2010 and leisure travel by 19%, despite the recovery in that year (Eurostat 2012). 301 13. Selected countries 13.4 Italy Business travel to Italy has also been affected. The recessionary growth from 2011 to 2013 is more likely to increase this trend than reverse it. The strong leisure tourism from abroad stabilises demand against the in land GDP development. Impact on demand for tex9le services Tex>le services feel the unfavourable condi>ons in the hospitality business in several ways: (1) Payment paierns deteriorate during a crisis, resul>ng in more liquidity pressures. Default or delay of payments can turn into a serious threat for small companies. This also applies to their suppliers, e.g. table linen producers. (2) The hospitality business tries to subs>tute tex>les. For example, since table linen is rather expensive, more restaurants will start to use paper. Other cost items are also slashed. (3) Decreasing demand in tourism translates into decreasing demand for tex>le services. Challenges for tex9le services Tex>le services are faced with a double challenge in this situa>on: (1) The business model has to be made more airac>ve for the hospitality business in order to boost demand. The quality ini>a>ve launched by Assosistema with the symbol Q, could play an important role in this. But it is vital in a crisis, that tex>le services help to control costs in the hospitality business and are able to communicate this effort to the HORECA clients. We have described approaches which, in the Netherlands and Germany for example, are more advanced than in Italy. (2) Individual unit costs have to be reduced in order to be able to make more airac>ve offers. Since labour is the most important cost item for Italy’s tex>le services, produc>vity in par>cular, must be increased. 302 13. Selected countries 13.4 Italy Cu[ng labour costs through flexi>me models and more flexible tariffs could also help if poli>cs allow these instruments. Mergers are a necessity in a crisis, in order to reduce unit costs through lot size effects, synergies and investments. Impact on the structure of tex9le services in the HORECA market The supplier structure is characterised by a few large companies like Alsco and Elis, several strong regional laundries like LIG in Rome, significant hospitality specialists such as Hotel Service based in Anagni and many very small businesses. Adjustments to the current situa>on as described above will only be possible if led by the large and medium-‐sized companies. Small suppliers will try to stay in the market with aggressive prices and will mainly be supported by the small hospitality companies. The medium and large companies should concentrate on relevant clients in the hospitality business and improve their services especially in terms of cost control and cost-‐neutral increase of gain. In view of the poor growth prospects, we expect that the business model of outsourcing tex>le procurement to tex>le services will be able to fare beier than the economy as a whole, showing a growth rate of -‐1 to 1% for 2012 and 1-‐3% from 2013. Flatwork will do beier than workwear, because tourism (the hospitality business) has to increase produc>vity to become more profitable and more compe>>ve on an interna>onal level. 303 13.4 Italy Chart 13.4-‐1 Development in the accommoda>on business The accommoda9on business is growing in the long-‐term Number of accommoda9on businesses 160.000 140.000 120.000 100.000 80.000 60.000 40.000 20.000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total bed capacity 4.800.000 4.600.000 4.400.000 4.200.000 4.000.000 3.800.000 3.600.000 Basis: Eurostat 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Eurostat 304 13.4 Italy Chart 13.4-‐2 Development in hotels Hotels are the backbone of the accommoda9on business, despite their small share in it Arrivals/hotels 85.000.000 80.000.000 75.000.000 70.000.000 65.000.000 60.000.000 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total number of hotels Number of hotels 34.400 34.200 34.000 33.800 33.600 33.400 33.200 33.000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Eurostat Beds per hotel 68,0 66,0 64,0 62,0 60,0 58,0 56,0 54,0 52,0 50,0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 305 13.4 Italy Chart 13.4-‐3 Comparison of growth rates Vigorous holiday tourism from abroad stabilises the development of arrivals in rela9on to the GDP Comparison of growth rates 5.00% 4.00% 3.00% 2.00% 1.00% GDP 0.00% Arrivals -‐1.00% 2007 2008 2009 2010 -‐2.00% -‐3.00% -‐4.00% Source: Eurostat 306 13. Selected countries 13.5 The Netherlands HORECA market poten9al and turnover According to FTN, the tex>le service associa>on of the Netherlands, the total poten>al of the sector amounted to 1.18 billion Euros in 2010. The figure is based on the hypothesis that all tex>les used by the relevant market segments could be supplied by tex>le services. The share of HORECA clients in this poten>al is 151 million Euros or 12.7% (Chart 13.5-‐1: Market poten>al). The sector’s turnover, according to FTN, was 574 million Euros in 2010 and represents exhaus>on of the market poten>al. It is 48.5% for all market segments. The exact percentage for the HORECA markets is not available. AHer several crosschecks and discussions we es>mate that HORECA turnover was 90 to 110 million Euros in 2010, equivalent to 60-‐73% of the market poten>al. These figures however, have to be seen as model assump>ons to reconstruct reality, and would have to be verified by a proper empirical analysis. In Chart 13-‐1 (Comparison of Key Performance Indicators) we use 100 million Euros as the average of the range men>oned. Rela9ve importance of tourism Tourism in the Netherlands showed a GDP share of 2.9% in 2009 and accounted for 2.9% of the total number of employees. This puts the Netherlands into the lower middle field of the countries under considera>on. Thresholds to entry into the market are calculable and there are many very small companies – like everywhere in Europe. Demand remained weak for two years before vigorous recovery in 2010 The Netherlands were already experiencing the decisive slump in demand in 2008, the first crisis year. The number of arrivals dropped by another 0.5% in 2009, but with that, the decline boiomed out. Arrivals increased vigorously in 2010 and almost reached the record high of 2007. The dynamics are largely characterised by foreign arrivals, which account for a large percentage in the Netherlands. 307 13. Selected countries 13.5 The Netherlands The number of overnight stays already began to recover marginally in 2009 due to more con>nuity in holiday tourism (Chart 13.5-‐2: Development of demand). Consolida9on on the supply-‐side While total bed capacity has remained on a shallow level since 2008, the number of accommoda>on businesses dropped, causing the average number of beds per company to rise (Chart 13.5-‐3: Development of supply). At the same >me, a slight increase in occupancy was registered from 2009, which as a whole is dis>nctly higher than in Italy or Germany, for example. Consolida>on is seen even more clearly with regard to hotels. They accounted for 45% of accommoda>on businesses in 2010 with a market share of approximately two thirds of total arrivals. Capacity per hotel is expanding, even though the number of hotels also rose once again in 2010. Larger companies can increase the efficiency of compe>>on instead of using prices as the only tool. Development chances and necessi9es for tex9le services Hardly any other country in Europe is as profoundly characterised by logis>cs as the Netherlands. The reason is the heavy emphasis on worldwide trade and the pragma>sm that comes with it. Against this background it is no surprise that the current shiH in the core competence of tex>le services from laundry to systema>c procurement is mainly seen in the Netherlands. Some of the described features of RFID were implemented early on, in a hotel in Amsterdam. FTN was involved in the produc>on of the “Roadmap 2030” which also contains ideas on improving tex>le services by enhancing logis>c performance. And the debate on the necessity of further developing the tex>le services business model (see Chapter 9) con>nues. 308 13. Selected countries 13.5 The Netherlands Intense compe99on in a growing market Compe>>on in the hospitality business, and especially the hotel market, is intense. Tex>le services in the Netherlands can also increase their prac>cal effect by reducing the workload of management in the hospitality business sector. An increase in produc>vity, i.e. cu[ng back on staff, plays a central role in a hospitality market that is growing in the medium to long term. But the endeavours for sustainability in the hospitality business have to be supported. At the same >me, the individual cost structures should be improved, in order to keep the price-‐ performance ra>o compe>>ve. Tex>le services in the Netherlands are characterised by a highly compe>>ve structure. Apart from a few large companies such as Berendsen, there are also numerous medium and small businesses. Investments will be needed in order to develop tex>le services for future requirements, but some companies will not be able to afford them. The market is generally seen as a growth market, however. In its analysis of tourism in the Netherlands, the World Economic Forum expects an annual growth rate of 2.8% un>l 2020 (WEF 2011), but employment in the hospitality business is expected to increase by only 0.8%. Against this background, we consider a growth rate of 2-‐4% un>l 2015, a realis>c expecta>on for tex>le services. 309 13.5 The Netherlands Chart 13.5-‐1 Market poten>al The market poten9al in the HORECA segment is es9mated at € 151 million Market potential textile service 2010 700 600 500 400 M i o 300 200 100 0 Health & Care Trade & Industry HORECA Source: FTN 310 13.5 The Netherlands 13.5-‐2 Development of demand Demand remained weak for two years Total number of overnight stays Total number of arrivals 89.000.000 35.000.000 88.000.000 30.000.000 87.000.000 25.000.000 86.000.000 20.000.000 85.000.000 15.000.000 84.000.000 10.000.000 83.000.000 5.000.000 82.000.000 0 2007 2008 2009 2010 2009 2010 2002 2003 2004 2005 2006 2007 2008 2009 2010 Foreign arrivals 11.500.000 11.000.000 10.500.000 10.000.000 9.500.000 9.000.000 2007 2008 Source: Eurostat 311 13.5 The Netherlands Chart 13.5-‐3 Development of supply The number of accommoda9on businesses has dropped Accommoda9on businesses Total number of beds 7.400 7.200 7.000 6.800 6.600 6.400 6.200 6.000 1.220.000 1.200.000 1.180.000 1.160.000 1.140.000 1.120.000 1.100.000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Eurostat 312 13.5 The Netherlands Chart 13.5-‐4 Development in hotels Hotels are gebng bigger Share -‐ Hotels 2010 Hotel arrivals 25.000.000 in % 120 100 20.000.000 80 15.000.000 60 10.000.000 40 5.000.000 20 0 Hotels 0 Betriebe 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total number of hotels Beds per hotel 3.300 68,0 3.200 66,0 3.100 64,0 3.000 62,0 2.900 2.800 60,0 2.700 58,0 2.600 Basis: Eurostat 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Eurostat 56,0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 313 13.5 The Netherlands Chart 13.5-‐5 Comparison of growth rates An immediate rapid drop in arrivals was experienced at the start of the crisis. Arrivals hardly dropped in 2009. Comparison of growth rates 8,00% 6,00% 4,00% 2,00% GDP Arrivals 0,00% 2007 2008 2009 2010 -‐2,00% -‐4,00% -‐6,00% Source: Eurostat 314 13. Selected countries 13.6 Austria Tex9le services have substan9al HORECA share Tex>le services in Austria achieved a turnover of 345 million Euros in 2010. Distribu>on is rather even among the client segments health & care, HORECA and commercial enterprises. Turnover also includes washroom, mat and other services. As a working hypothesis, we es>mate that turnover achieved through HORECA clients was around 120 million Euros (35%), but aHer crosschecks and based on discussions, allowance has to be made for inaccuracy amoun>ng to 10 million Euros. Tourism contributes significantly to GDP Austria is a popular holiday des>na>on, and in 2010 tourism accounted for 4.1% of the GDP. The hospitality business employed 4.5% of all employees, which is the second largest percentage aHer Italy, among the countries considered in this study. Business travel is also rather significant, especially in Vienna and Linz. Dura9on of travel dropped sharply The economic crisis also leH its marks in Austria. Arrivals dropped by 0.5 million (-‐2 %) in 2009; more than half of those were foreign arrivals (-‐0.3 million). It has to be kept in mind that foreign arrivals are generally predominant in Austria, accoun>ng for 64% in 2010. While arrivals had already recovered in 2010, the number of overnight stays not only dropped in 2009 but also in 2010. The general trend towards shorter travel >mes increased no>ceably during the crisis (Chart 13.6-‐1: Development of demand). This also had a nega>ve impact on demand in gastronomy. Hotel consolida9on The Austrian accommoda>on business is dominated by hotels. They accounted for 60% of accommoda>on and 86% of arrivals in 2010. The number of hotels dropped by 5% between 2007 and 2010, while capacity increased by approximately 10% to an average 44 beds per hotel. 315 13. Selected countries 13.6 Austria There has therefore been some consolida>on of hotels (Chart 13.6-‐3: Development hotels). Compared to other countries, hotel brands have a smaller market share and budget hotels also play a smaller role than in Germany, for example, which is due to the smaller percentage of business travel. For the same reason, budget hotels have less prospects of expansion in Austria than they have in countries with well-‐developed business travel. The accommoda>on business as a whole shows even less reac>on to the economic and financial crisis than the hotels, i.e. the other types of accommoda>on have largely kept their offers stable. Austria in a good compe99ve posi9on The compe>>ve posi>on of Austria’s hospitality business is excellent. With the high percentage of hotels, it is on a good, professional level in terms of infrastructure, staff and staff training, and with regard to scenic and cultural airac>ons as well. Austrian cuisine also has a dis>nc>ve character of its own, which makes it possible even for modest restaurants to operate independently. Prices are lower than in Switzerland and large parts of northern Italy, and environmental awareness is strong. Tourism will con>nue to grow in the coming years, and will provide more opportuni>es to Austria than to other countries. The compara>ve analysis of the World Economic Forum expects an annual increase of 4.2% for tourism un>l 2020 and an annual increase of 3.4% for tourism staff un>l 2020 (WEF 2011). Against this background, tex>le services for the hospitality business in Austria will be at the upper end of the annual growth range of 2-‐4% un>l 2015. 316 13.6 Austria Chart 13.6-‐1 Development of demand The number of overnight stays in par9cular, showed a visible decrease Total number of overnight stays Total number of arrivals 106.000.000 35.000.000 104.000.000 30.000.000 25.000.000 102.000.000 20.000.000 100.000.000 15.000.000 98.000.000 10.000.000 96.000.000 5.000.000 94.000.000 0 2007 2008 2009 2010 2009 2010 2002 2003 2004 2005 2006 2007 2008 2009 2010 Foreign arrivals 19.500.000 19.000.000 18.500.000 18.000.000 17.500.000 2007 2008 Source: Eurostat 317 13.6 Austria Chart 13.6-‐2 Development in the accommoda>on business Changes in accommoda9on business as a whole are smaller Total number of beds Accommoda9on businesses 980.000 21.000 960.000 20.800 940.000 20.600 920.000 20.400 900.000 20.200 20.000 880.000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Eurostat 318 13.6 Austria Chart 13.6-‐3 Development in hotels The hotel sector is consolida9ng Hotel arrivals 30.000.000 25.000.000 20.000.000 15.000.000 10.000.000 5.000.000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total number of hotels Hotel beds per hotel 15.500 46,0 15.000 44,0 14.500 42,0 14.000 40,0 13.500 38,0 13.000 36,0 12.500 34,0 Basis: Eurostat 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 319 Source Eurostat 13.6 Austria Chart 13.6-‐4 Comparison of growth rates Arrivals developed more sluggishly than GDP Comparison of growth rates 7,00% 6,00% 5,00% 4,00% 3,00% 2,00% GDP 1,00% Arrivals 0,00% -‐1,00% 2007 2008 2009 2010 -‐2,00% -‐3,00% -‐4,00% Source: Eurostat 320 13. Selected countries 13.7 Switzerland HORECA share in tex9le turnover just below 30% Tex>le services in Switzerland showed a turnover of 510 million Euros for 2010. AHer discussions and compara>ve analyses were concluded, that turnover with HORECA clients amounted to about 150 million Euros, allowing for an error margin of 10 million Euros. Accordingly, it would account for slightly less than 30% of Swiss tex>le services as a whole. The figures given in the overall view of Chart 10-‐1 are based on this assump>on. The values for turnover per arrival (€ 9.26) and turnover per overnight stay (€ 4.21) seem rather high. They are subject to several specific modelling problems which only allow comparisons with other countries within limits: (1) These values refer to hotels only, because data on other accommoda>on types is not available. This means that tex>le services for other accommoda>on types are added to the figures for hotels. (2) The average length per hotel stay (2.2 nights) is probably less than the average for other accommoda>on types. (3) Considerable fluctua>ons in the exchange rate of Swiss Franc and Euro make comparisons of prices more difficult. Tourism is very important for labour market and economic strength In none of the other countries under considera>on in this study is tourism as significant as it is in Switzerland. Tourism accounted for 5.8% of GDP in 2010 and tourism employees for 7.8% of the labour market. It also has to be noted that Swiss gastronomy is excellent and rela>vely expensive. Switzerland is extremely well equipped for tourism; the infrastructure for holidaymakers and business travellers is top-‐class. 321 13. Selected countries 13.7 Switzerland Steady growth in hotel arrivals Measured against the number of hotel arrivals, demand has increased moderately, but steadily over the past ten years, except for 2009 which showed a slight drop. The trend set by the top years 2007 and 2008 was regained in 2010. The picture is not quite as good for overnight stays in hotels. The total number of overnight stays per arrival dropped from 2.5 in 2001 to 2.2 in 2011. Especially aHer the crisis of 2009, it can be seen that the number of overnight stays decreased even though the number of arrivals exceeded the pre-‐crisis level (Chart 13.7-‐1: Development of demand). It can be concluded that travel >mes were shortened. In most of the other countries, the crunch was felt less in respect of leisure travel than was the case in business travel, but in Switzerland, holiday travel decreased as well and recovery in 2010 was less pronounced. Low capacity u9lisa9on despite consolida9on The number of hotels has dropped in recent years. This means that a process of consolida>on is underway. Its end is not yet in sight, because hotel occupancy is very low. Occupancy rates are similar in other countries, but they also include beds in guesthouses and country inns which are not compe>>ve and not occupied on a regular basis. Bed capacity has increased steadily, which means that hotels have become bigger (Chart 13.7-‐2: Development hotels) and are more likely to outsource less central tasks to reliable service providers. Hotel arrivals recovered faster than GDP In contrast to the other countries under considera>on, GDP did not shrink in 2009. Nominal growth decreased to 1.7%, however. Hotel arrivals on the other hand dropped by 2.7%, i.e. the worldwide crisis had more impact on hotel arrivals in Switzerland than on the GDP. 322 13. Selected countries 13.7 Switzerland Since the Euro has weakened against the Swiss Franc, GDP development is looking more posi>ve than it should. Another aspect is more important, however: the higher the share of foreign tourism, the less dependent tourism is on the condi>on of the domes>c economy. In Switzerland it is very high, which means that GDP development in the countries of origin becomes more important. Despite the marked recovery in the number of arrivals in 2010, the number of overnight stays shows that Switzerland as a tourist des>na>on has suffered somewhat. Modest growth in tourism At present, and possibly for some >me to come, the strength of the Swiss Franc against the Euro will be a considerable problem, because it makes Switzerland more expensive for the rest of Europe, causing poten>al holidaymakers to go elsewhere. In its tourism analysis, the World Economic Forum expects tourism and the number of employees in tourism to grow by only around 0.6% p.a. un>l 2020, even though Switzerland is an excellent and interes>ng travel des>na>on on many levels. The most important reason for this restrained assessment is that fairly similar holidays can be had in Austria in par>cular, but also in northern Italy and to some extent in Germany, at much beier prices. Challenges for tex9le services The most important task of tex>le services in Switzerland should be to improve the cost efficiency of tex>le procurement without diminishing the level of quality of the hospitality sector. As already described in the sec>on on Italy, this requires services that control the cost of tex>le procurement for a hotel, whilst also reducing their own unit prices. On the whole, we expect that un>l 2015, Swiss tex>le services in the HORECA market will achieve annual growth rates of 1-‐3%. 323 13.7 Switzerland Chart 13.7-‐1 Development of demand Hotel arrivals increased steadily – except for 2009 Total number of overnight stays 37.500.000 37.000.000 36.500.000 36.000.000 35.500.000 35.000.000 34.500.000 2007 2008 2009 2010 Source: Eurostat, FSO 324 13.7 Switzerland Chart 13.7-‐2 Development in hotels Number of hotels drops, bed capacity rises Beds per hotel Total number of hotels 51,0 50,0 49,0 48,0 47,0 46,0 45,0 44,0 43,0 5.900 5.800 5.700 5.600 5.500 5.400 5.300 5.200 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Souce: Eurostat 325 13.7 Switzerland Chart 13.7-‐3 Comparison of growth rates Hotel arrivals were more stable than GDP development due to the large share of foreigners Comparison of growth rates 7,00% 6,00% 5,00% 4,00% 3,00% 2,00% GDP* 1,00% Arrivals** 0,00% -‐1,00% 2007 2008 2009 2010 -‐2,00% -‐3,00% -‐4,00% Source: *Eurostat, *FSO, hotels only 326 Bibliography AHGZ-‐Ranking der 200 umsatzstärksten Hotels in Deutschland, in: Der Hotelier. 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