Hospitality Linen Rental Procurement Category Market Research Report Now Available from IBISWorld
Los Angeles, California (PRWEB) September 24, 2014 -- The hospitality linen rental market has a buyer power score of 2.8 out of 5, reflecting market conditions that are relatively favorable for buyers. IBISWorld market research analyst, Kiera Outlaw, says, "Demand for linen rental services has increased during the three years to 2014 due to rising corporate profit, consumer spending and inbound trips by non-US residents, all of which have helped support strong price growth." Nevertheless, low specialization, switching costs and supply chain risk have all helped to support buyer power during the period. Major vendors in the market include Alsco, Cintas, G&K Services and Mission Linen.
Unfortunately for buyers, price growth has been one of the most significant hurdles when securing linen rental services. "Although linen replacement costs have declined, suppliers have increasingly invested in newer laundering equipment," says Outlaw. These machines are expensive and are depreciated over three to 10 years, indicating that suppliers are lifting their rental prices to try to recoup some of those costs. High price volatility has also hampered buyer power because it has weakened buyer confidence when budgeting for hospitality linen rental services. The market's moderate concentration has also adversely affected buyer power. The rising trend of merger and acquisition activity within the market has lessened the pool of available suppliers. While price-based competition is stiff, buyers are increasingly seeing less price differentiation across suppliers.
Despite these trends, a few market characteristics help support buyer power during negotiations. Low specialization has benefited buyers because it indicates that, despite the declining number of suppliers, buyers can source their linen rental needs from a range of suppliers. Furthermore, low switching costs have made it easier for buyers to source a new supplier when needed. The average low risk throughout the supply chain has also benefited buyers because it indicates a reduced chance of supply interruption from suppliers. However, prices are forecast to continue climbing through 2017; thus, buyers are encouraged to secure multiyear agreements now to lock in current rates and cap price increases. For more information, visit IBISWorld’s Hospitality Linen Rental procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of hospitality linen rental. Suppliers provide laundered items, such as table and bed linens, towels, mops and mats, on a rental or contract basis. Hospitality linen rental services are geared toward hotels, motels and restaurants. This report excludes uniform rental as the service is considered industrial, as well as other commercial and industrial laundry and linen supply services, such as for hospitals and prisons.
Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Market Profitability
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
Gavin Smith, IBISWorld Inc., +1 (310) 866-5042, [email protected]
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