Senior Living Business: Boosting Occupancy When Resources Are Tight--
Appropriately Applied Sales And Marketing Strategies Work Well
Occupancy levels appear to have stabilized, which is good news. The average occupancy rate for senior housing properties for 4Q 2010 was 87.6%, according to NIC MAP data—virtually level for the past year. The less good news is that those levels are significantly below those halcyon days prior to the infernal financial crisis of 2008, when occupancy at many retirement communities hovered around 92-95%.
But vacancies are not only a result of the sluggish marketplace, according to Jim Moore, President of Moore Diversified Services in Fort Worth, Texas. One of the biggest challenges in senior living today is the growing obsolescence of many physical plants developed over the past 15-25 years. “Senior consumers are gradually increasing their resistance to older or sub-par physical plants,” he said.
Typically, chronically vacant independent or assisted living units—what Moore calls “dog units”—are too small, too noisy, too far from the dining room, or have a dated design or an undesirable view. His recommendation is to correct physical design flaws where possible but also selectively modify the pricing of those units to reflect their realistic market value.
“Some operators refuse to change the pricing used in the original financial plan, despite overwhelming evidence that some units are unrealistically priced for the competitive marketplace,” Moore pointed out. “Rather, they continue to hold out for an eventual sale at the original price.”
But there’s no magic formula for surviving the current market turbulence. The fundamental issue is—and the difference in success between one community or facility and another depends on—whether the organization has a cohesive, multi-faceted sales and marketing program.
Effective sales and marketing
Moore suggests that senior living sponsors or owner/operators—even those that are financially sound—should undergo a comprehensive sales and marketing audit before implementing an effective sales and marketing program. “Some providers may be doing all the right things, but they’re frequently not doing them in a seamless, cohesive way,” he explained. “And while they cannot control the external market, they can certainly optimize their internal operations.” Want to read more? Click here for a free trial to Senior Living Business and download the current issue today