IBISWorld Market Research
While outsourcing during the downturn provided a platform for growth, improving economic conditions allowed this growth to come to fruition.
Melbourne, Australia (PRWEB) September 16, 2014
Commercial Laundries in Australia have cleaned up following the mess of the global financial crisis. Many businesses have sought to outsource their laundry operations, as part of a general trend towards outsourcing to more efficient operators. While outsourcing during the downturn provided a platform for growth, improving economic conditions allowed this growth to come to fruition. Downstream markets required more frequent laundering services, generating further demand for the industry. As a result, industry revenue is estimated to grow by a compound annual 3.1% over the five years through 2014-15, to reach $1.1 billion. Continued strong growth of 3.2% is forecast for 2014-15. Although outsourcing provided a platform for growth, improved conditions for accommodation and healthcare providers was the source of a large proportion of industry growth. While the high Australian dollar dampened local tourism and demand from traditional Western tourist markets, according to IBISWorld industry analyst David Whytcross, “the country's proximity to Asia resulted in a boom in tourism by China's burgeoning middle class.” Demand growth for hotels subsequently generated growth in demand for outsourced laundering of bed linen and towels.
Industry operators are projected to increase investment in technology such as batch washers over the next five years. The greater efficiency afforded by such machinery is expected to provide incentive for businesses to outsource laundry functions, although much of this demand is expected to be fulfilled by incumbent large-scale industry players. Industry demand is projected to grow as conditions in downstream markets improve. “Accommodation providers will benefit from continued tourist demand from Asia and a depreciation of the Australian dollar, making local travel more affordable,” says Whytcross. Healthcare and aged-care providers can also be expected to increase their demand for commercial laundries, as Australia's population continues to age.
The Commercial Laundries industry displays a medium level of market share concentration. The industry's two major players are Spotless Group Holdings and Alsco Pty Limited. These firms have the size and scope to provide a diversified range of commercial laundering services and are able to win contracts with extremely large customers. In contrast, the industry's remaining enterprises tend to be smaller, independent operators that target local and regional clients. Many smaller firms also run franchised laundry operations, which aids entry into the industry and provides an established customer base. Market share concentration has grown slightly over the past five years due to increasing consolidation, particularly for Spotless, the industry's largest company.
For more information, visit IBISWorld’s Commercial Laundries industry in Australia report page.
Industry operators are engaged in providing linen and other laundering services to commercial operators such as hotels, hospitals and aged-care facilities.
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