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The Pineapple has been a symbol of hospitality for centuries. According to legend, captains of New England would mount a pineapple on their fence posts when they had a safe return from sea.  This served as an invitation for family and friends to visit and share a meal together.  Today, the pineapple serves as a symbol for the highest quality in hospitality

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Turn Trash into Cash
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Pineapple Hospitality® and Midas Consulting Identify Eight Red Flags
For Hotel Operators to Improve Environmental Practices and Reduce
Waste Management Expense
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St. Charles, MO – June 20, 2006 – Waste management is entrenched as the least exciting aspect of the Lodging industry. Aside from the obvious unpleasantness, waste disposal is a comparatively small expense on the income statement. Even so, the nascent Green Lodging movement has taken trash and recycling from the loading dock and parking lot into the executive office as the movement quickly establishes itself as a viable way to control costs, enhance guest satisfaction and improve occupancy.

While the economic benefits of “going Green” are straightforward, the difficulty in executing an environmental initiative sometimes boils down to the fact that it can be time consuming. “There are many resources advising hotel operators what to do, but few resources who can actually step in and does it, saving managers time and money by helping them avoid missteps along the way,” says Ray Burger, President of St. Charles, Missouri-based Pineapple Hospitality, Inc.

To help hotel operators evaluate and implement environmental best practices related to waste management and recycling, Pineapple and Midas Management Consulting LLC have formed an alliance where Pineapple is marketing Midas’ services in the lodging industry. “We are very pleased to be working with Midas. Our strategic partnership will benefit our lodging customers by reducing operating costs while saving Engineering staff time” says Burger.

“Waste carries with it a classic vicious circle that has most Lodging firms unintentionally limiting their profits,” explains Tim Johnson, President of the Madison, Wisconsin-based Midas. “In the past, many senior executives have viewed waste and recycling virtually as an afterthought because it’s a comparatively small expense. Today, they understand the economics, but are troubled by information overload and time constraints. Meanwhile, on the front lines, Engineering and Housekeeping staff is tremendously busy every single day and have difficulty adding this topic to their plate, even when waste and recycling is on management’s priority list. Consequently, this low hanging fruit is often ignored or aborted after false starts”

Midas’ solid waste audits are contingency fee-based, with a no savings, no fee guarantee. 

“Our model is to roll up our sleeves and extensively evaluate all waste and recycling services for an operator on a property by property basis, and then customize solutions that result in streamlined and efficient operations, as well as reduced expenses for the long term,” says Johnson. Midas’ cost reduction record of accomplishment is a 37% average savings for clients. 

Most of Midas’ work is done remotely, requiring copies of invoices and hauler agreements along with a letter of authorization to make the trash and recycling vendors comfortable in sharing client data with Midas. “We do 95% of the work and ask very little of the client,” explains Johnson. Bob Clement, President and Chief Operating Officer of Park Lodge  Hotel Group of Waltham, Massachusetts agrees, “We did it pretty much all by e-mail and fax. Midas asked us for some digital pictures and occupancy data. He also asked that Engineering complete a simple worksheet. Midas also kept us updated along the way and is providing guidance on managing staff through the changes.”

Park Lodge had Midas conduct a waste audit shortly after bidding out their waste disposal service. Clement, “We look at waste annually and sign 3 year agreements. The timing seemed odd, in that we had just wrapped up competitive bids, but Park Lodge has Green Lodging goals and I was attracted to Midas’ no savings, no fees approach. Any skepticism I might have had, disappeared when I reviewed the savings recommendations for our properties. The first stage of the project dropped our costs about 20% below what we had just negotiated ourselves and Midas obtained cardboard recycling service for us at no cost. Within the next three years, we will come to realize savings in the 40% range. Working with Midas made this project as easy to implement as it was to cost justify.”

Johnson says the Park Lodge project was a challenge for Midas. “You can’t see inside a compactor,” tells Johnson, “and Park Lodge has two properties that share one. To make things more difficult, the compactor is a small one, serviced by a front-load garbage truck, so we did not have any weight data to work with. Even so, we were able to accurately calculate the actual waste volumes inside the compactor.”

To help managers evaluate the benefits of a waste audit, Johnson identifies and comments on some red flags that will help managers stay on top of their waste disposal costs. 

Eight Red Flags Hotel Operators Need To Be Aware Of
To Stay On Top Of Their Costs

1. Automatic Renewal Language in Your Contract

“If a property signed an agreement years ago and has never looked at it since, or if an agreement has ever rolled over, the chances are excellent that you’re overpaying,” says Johnson. In a renewal situation, the operator forfeits their opportunity to improve their rates and terms. Johnson recommends sending your vendor notice that you are canceling this language by certified letter, return receipt.

2. Relying On Competitive Bidding as Your Primary Cost Control

“Caveat emptor,” says Johnson, “While competitive bidding may get you a decent price, it doesn’t guarantee you the exact service that you need.” According to Johnson, haulers will ask what you have now and bid on that, instead of doing a customized needs analysis. “If you have an 8 yard dumpster, but really need a 4 yard dumpster, so what if you get a good price?” warns Johnson, “You’re still paying twice as much as you should!”

3. Failing To Periodically Monitor the Waste Industry

Wall Street and waste industry trades report that companies like Waste Management Inc., and Allied Waste Systems, the two largest companies in the waste industry are focusing on return on capital, much of which is coming from price increases. “No one does this, but with Google, it’s just too easy to do competitive intelligence,” encourages Johnson.

4. Buying Into the Myth of “National Purchasing Leverage”

Johnson warns, “Waste vendors and waste brokers use the term “purchasing leverage" because it is an easy concept to grasp. In its essence, ‘purchasing leverage’ is really a misnomer for simplification, where there is some discounting, but much money is left on the table in exchange for time,” Johnson points out that pricing, and the vendor’s costs, are largely a function of the distance from a property’s dumpster to the vendor’s nearest landfill. “In particular, hotel operators that work with waste brokers sacrifice transparency and control because clients never see the actual waste and recycling vendor invoices. This gives the waste broker the opportunity to operate with, and profit from, an additional margin,” elaborates Johnson. 

5. Accepting Price Increases without Question

“Vendors use actuarial techniques and prepare for a percentage of their customers to refuse their price increases. Also, sales managers instruct their staff not to lose any business over a price hike,” says Johnson. He recommends that every business call to challenge prices increases when notified. 

6. Unclear On How “Waste-Bans” And New State and Federal Laws Impact Your Costs and Liability

“Park Lodge was unaware of the penalties we were exposed to due to the Massachusetts waste bans, and our hauler didn’t provide us any guidance,” says Clement. Johnson agrees that is not uncommon, “The onus is on the business to ensure compliance and the bulk of a standard waste hauler agreement has to do with limiting their liability.” 

7. Not Capturing and Recycling All Valuable Commodities

Trash haulers are paid for selling cardboard, cans and plastic, so their costs to provide recycling services should be lower than for solid waste. “Managers should verify that the lower cost structure is passed along to them, not pocketed by the hauler,” recommends Johnson. If there is space for one or more recycling containers, separating recyclables from waste should be carefully considered. Johnson also points out that operators can reap are excellent community service and publicity benefits by considering local options for recycling like non-profits and small businesses.

8. Not Identifying and Correcting Problems with Waste Collection Equipment

At larger properties, compactors are the equipment of choice. Like everything else, they require periodic maintenance, but according to Johnson, it is most often up to the hotel operator to ask for a check up. “Compactors should have working, accurate pressure gauges so staff can monitor capacity,” says Johnson. “If you don’t have one, demand one from your vendor.” Johnson also advises operators to verify that the compactor’s pressure limit switches meet the manufacturer’s specified limit settings and are not set below specs. 

About Pineapple Hospitality®, Inc
Headquartered in Saint Charles, Missouri, Pineapple Hospitality® is an EPA Energy StarTM partner bringing fresh ideas to hospitality guests’ doors and owner/operators’ bottom lines — including FreshStay®, Environmentally Sensitive Amenities, the greenSPA luxury amenity and dispenser system, GE energy efficient lighting, Guestat programmable thermostats, Oxygenic water-efficient showerheads, the Nature’s Mist deodorization system, and dozens of other products and programs. To get a taste of Pineapple’s sweet solutions helping hundreds of hotels bolster business and cut costs, please visit www.pineapplehospitality.net, or call Ray Burger at 636-922-2285.

About Midas Management Consulting LLC
Midas Management Consulting LLC is a leading national cost recovery and containment firm that specializes in no risk, performance-based expense reduction services for mid-sized businesses. Midas’ suite of services include freight negotiations and auditing; solid waste and recycling audits; real estate lease audits and cost segregation analyses; healthcare reviews; document fleet management; account payable audits; utility audits; hiring and business tax credit reviews and travel management. They are headquartered in Madison, Wisconsin.
 
 

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Contact:

Ray Burger
President & Founder
Pineapple Hospitality, Inc.
ray@pineapplehospitality.net
 (636) 922-2285
www.pineapplehospitality.net

Tim Johnson, President
Midas Management Consulting LLC
timjohnson@midasmanagementconsulting.com
(608) 438-2230
www.wasteaudit.info
 

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Also See: PURE Solutions Signs On As A Corporate Sponsor Of FreshStay™; FreshStay™'s rapidly growing online directory of non smoking hospitality properties is the perfect match for the PURETM Rooms program, which converts guestrooms to allergy-friendly rooms within 24 hours / May 2006
Pineapple Lights Up Hotels' Bottom Lines; Hospitality Properties Reap Significant, Sustained Economic Benefits By Embracing Environmentally-Friendly, Energy-Efficient Bulbs; Lighting Retrofits Reduce Costs & Bolster Guest Satisfaction / May 2006
Top 5 States and Top 10 cities for Non Smoking hotels in the U.S.; www.freshstay.com adds 25 non-smoking properties during April -California is the number 1 state and Seattle the number 1 city / May 2006
Zontec™ Sponsors FreshStay.com to Identify Best Places Where Guests Can ‘Breath Easy, Sleep Great™’ / April 2006
200 Smoke Free Hotels Join the www.freshstay.com Online Directory in 1st Month / March 2006
120 Smoke Free Hotels Join the www.freshstay.com Online Directory in 1st Month / February 2006
Fresh Air: The New Hospitality Amenity; Pineapple Hospitality Launches FreshStay™, an Online Directory of Hotels Offering Better Indoor Air Quality / January 2006
Gift of the Year: Pineapple Hospitality’s Energy $aving Trifecta / December 2005
Pineapple Hospitality is Now the Exclusive U.S. Supplier of Environmentally Sensitive Amenities™  / November 2005
Got Pineapple? Hotelier-turned-industry-innovator Ray Burger Launches Pineapple Hospitality™ — bringing fresh ideas and business-building products and programs to your guests’ doors and your bottom line / September 2005


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