No matter how often the stats about the impending wave of aging Baby Boomers are cited, it seems that senior living providers, policy makers, and even society as a whole have yet to heed them.
A session at the recent LeadingAge conference highlighted this fact, and the presenters’ message was clear: if you don’t do something now to shift your paradigm and focus on consumers’ needs and desires, among other things, you will miss out on a golden opportunity to not only thrive in the longevity economy but also stay true to your organization’s mission.
Mark Andrews, co-CEO of Irving, Texas-based Greystone Communities, led the session, which was aimed at identifying opportunities and challenges for providers while at the same time maintaining a margin that “enables long-term mission growth.” According to him, the current landscape of the industry is as follows:
- High growth curve and a demographic shift;
- A long economic recovery;
- A strong real estate market and improved household wealth;
- Low interest rates;
- Increasing competition;
- Evolving and changing customers;
- Aging CCRCs; and
- A growing number of providers.
Historically, Andrews noted, providers have had a paternalistic approach to their business model. “We knew what was best for the consumer and we would make it available when we thought they needed it.” With that, Andrews outlined some things that providers should do (and know) to ensure success going forward:
- Your business model needs to change to be more consumer-focused and resident-centered. The new model, Andrews explained, must wrap the continuum around seniors’ needs and offer services “when they think they need it,” versus the provider making that decision.
- Communities with lifestyles of engagement, purpose, and connectedness will thrive. In addition, you will have strong demand if you have the right product, right location, and the right approach to services.
- Services need to be priced in a way that suits the consumers’ economic circumstances. It will require a different mindset and the ability to serve the upcoming generation of seniors, who will want much more flexibility and programming than the current model offers.
- The labor pool will be a significant factor. Movement to a $15 minimum wage will affect providers’ ability to recruit and retain staff. “It will have a profound impact on the economics of senior living and your ability to afford it,” which will lead to some stress, said Andrews.
- Reinvest and remodel your aging physical plant. One-quarter of all CCRCs are between 20 and 35 years old and 22 percent are between 15 and 25 years old, while 12 percent are more than 35 years old. Knowledge is power in this case, Andrews noted: if your CCRC is relatively young, you will have an advantage over most CCRCs in the country.
- A large number of replacement independent living units will be required over the next 15 years. Between 175,000 and 200,000 additional incremental and replacement independent living units will be needed between now and 2030 to keep up with replacing aging physical plants as the demand for them grows.
- Competition is on the rise. A growing number of providers nationwide are investing in expansion and repositioning and/or growth. Behind this development are the following factors: more capital availability, aging communities, and growth in for-profit rentals in assisted living, memory care, and more.
Whatever your tax status, it’s a good idea to consider how you might strategize and reposition your community—time may not be on your side if you wait much longer.
If you want a focused approach, facilitated by experts in the senior living field and honest feedback, contact Quantum Age today.
