COVID-19 IMPACT SURVEY MAY 2020
The global market for Commercial Laundry Machinery is projected to reach US$5.7 billion by 2025, driven by the robust growth and evolution of the lodging services and travel accommodation market. Few of the factors driving growth of travel, tourism, lodging and hotel industry include rising volumes of international tourism and domestic vacations supported by rising incomes and falling airline fares; increased infrastructural developments; increased use of digital tools for flight and accommodation booking in a manner that makes the process cost-effective, easy and convenient. Government initiatives are turning Asian countries into hot tourist destinations. For instance in India, the country`s inherently rich cultural and historical heritage, ecological variety, and places of scenic beauty are being developed to encourage both domestic and outbound tourism. A strong lodging services and travel accommodation market in turn leads to increased use of commercial laundry services. Laundry needs of the hospitality industry are huge. Bedding, bath towels and table linens are required to be kept clean and fresh at all times. Increased frequency of guest visits/guest footfalls means more dirty linen to wash and requires on-demand scalability of laundry operations. The importance of clean and quality linen in the hotel industry cannot be undermined. Good quality towels and bed linen plays over a 90% role in influencing the satisfaction and overall experience of hotel guests. Stained or poor quality bed linen increases the risk of losing repeat customers by over 95%, drastically reducing the likelihood of customers booking a room with the hotel in the future.
However, maintaining in-house laundry care operations is expensive, given the rising cost of labor. Economically unsustainable wage growth is quickly becoming a threat to competitiveness of the hotel industry. This high cost of labor is resulting in the switch from internal operations to outsourced services. Over 65% to 70% of hotels are outsourcing washing of their bed linen and towels to a laundry service provider. The scenario provides the perfect platform for increased installation of commercial laundry machines by service providers to meet the growing demand for, and increase in laundry care contracts. Few of the noteworthy trends in the market include growing focus on environmental health and the ensuing rise in interest in energy-efficient, eco-friendly water-saving machines; increased spending by hotels on amenities like cleaning and housekeeping services; technology improvements such as washer-extractors with high g-force extraction and tumbler-dryers with over-dry prevention; demand for machines with temperature and moisture control sensors that prevent damage to delicate fabric and ensure safe laundering of clothes; development of laundry machines capable of heating water to a temperature as high as 190 degrees to eliminate bacteria and dust mites from laundry in response to deep cleaning needs. The United States and Europe represent large markets worldwide with a combined share of 64.8% of the market. The launch of new laundry equipment with innovative features such as enhanced water conservation, energy efficiency, speed, compactness and automated-operation capabilities will encourage replacement demand growth in the developed markets. China ranks as the fastest growing market with a CAGR of 7.4% over the analysis period supported by under-penetration of laundry services and untapped opportunity for growth against the backdrop of the expanding base of upwardly mobile middle class population and their increasing aspirational spending guided by changing perceptions of comfort, convenience and wellness. Other major factors driving growth in the country include rapid urbanization; development of Chinese tourism, rise of medical tourism; and increased establishment of commercial laundry facilities.