Cost per kilogram is one of the most useful numbers in hotel laundry — and one of the easiest to misuse.
A hotel may be told that its on-premise laundry costs a certain amount per kilogram. An external supplier may quote another figure. At first sight, the lower number appears to answer the question.
Often it does not.
The comparison is only meaningful if both numbers include the same things. A supplier invoice and an internal operating-cost estimate are not automatically comparable simply because both are expressed per kilogram.
Start with the scope, not the result
Before debating whether a laundry costs too much, management should ask what sits inside the number.
For an on-premise laundry, the visible costs normally include labour, utilities, chemicals and maintenance. But some hotels stop the calculation there. Other costs may sit elsewhere in the P&L or balance sheet and therefore disappear from the apparent laundry cost.
For an outsourced model, the opposite problem occurs. The supplier's processing rate is highly visible, while hotel-side costs that remain after outsourcing can be overlooked.
A cost-per-kilogram figure therefore needs a defined scope before it can be interpreted.
The internal laundry has more than one useful cost view
For day-to-day operational management, a cash operating cost per kilogram is useful. It helps track whether labour, utilities, chemicals, maintenance and other recurring costs are moving in the right direction.
For an investment or make-versus-buy decision, however, management may need a broader economic view. Equipment does not become free because it has already been purchased, and back-of-house space may have value if outsourcing would genuinely release it for another productive use.
These two views answer different questions. Mixing them creates false conclusions.
The outsourced price is not always the outsourced cost
A quoted processing price may look simple: a rate per kilogram, pound or piece.
The hotel's real outsourced-system cost can be wider. Transport, surcharges, internal receiving and reconciliation, extra circulating linen, loss or rental terms, emergency processing and contract management may still matter.
That does not mean outsourcing is expensive. It means the hotel should compare complete systems rather than one visible invoice line with one incomplete internal estimate.
Linen is an easy place to distort the comparison
Textile ownership needs to be treated consistently.
If the hotel owns and replaces its linen under both operating models, wear and loss do not disappear simply because processing moves off-site. If the external proposal includes linen rental, the economics are different again.
Before comparing two cost-per-kilogram numbers, ask a simple question:
If we changed operating model tomorrow, which costs would genuinely disappear, which would remain, and which new costs would appear?
That question catches many of the scope errors hidden by apparently precise cost figures.
Cost per kg is not the only management measure
Cost per kilogram is useful because it normalises laundry operating cost against production volume. But it does not tell the whole hotel story.
A property can improve laundry cost per kilogram while total laundry cost per occupied room still rises — for example if guests generate more textile volume, service standards change or linen loss increases.
For hotel management, it is therefore useful to look at laundry economics from more than one angle rather than relying on a single unit-cost KPI.
Avoid false precision
A cost model becomes less useful, not more useful, when generic assumptions are presented as property-specific facts.
Actual payroll, invoices, measured consumption and real contract terms are stronger inputs than an internet benchmark. Where direct information is unavailable, the assumption should be visible and tested rather than hidden inside the answer.
The objective is not to produce a number with two decimal places. It is to identify the costs and assumptions that can actually change the decision.
A useful first check
Before accepting a hotel laundry cost-per-kilogram figure, management should be able to answer a few basic questions:
- Is labour based on the full cost of the people required to operate the laundry?
- Are utilities and chemicals based on realistic consumption and local prices?
- Has maintenance been included even if the current year happened to be quiet?
- Is linen ownership and replacement treated consistently?
- If comparing with outsourcing, are the hotel-side costs that remain after outsourcing visible?
- Is the number intended to measure recurring operating performance, or the full economics of the operating model?
If those questions are unclear, the headline cost per kilogram is probably not yet decision-grade.
Run a first comparison
The free Operational Reference Quick In-house vs Outsource Cost Check provides an initial screening comparison between the two models.
It is designed to expose the main variables quickly, not to replace a full property-specific economic assessment.
Go deeper
This article draws on the cost framework developed for The Hotel Laundry Handbook — Operational Reference OR 001.
The Handbook develops the complete methodology for building internal laundry cost, separating cash and economic views, treating capital and space appropriately, constructing the full outsourced-system cost, testing assumptions and comparing alternatives on a consistent basis.
The Professional Tools take the next step by allowing hotel-specific inputs and scenario analysis.