What do senior housing prospects want?
By Tom Mann, Principal, Executive Vice President
In Part II of Senior Housing Trends, we’re going to review how residents’ needs are changing. From moving out of their houses, to choosing contracts, to picking the right product, the services and contracts seniors are searching for are quickly evolving.
What are the psychographics of the coming senior housing customer? According to Point Forward Solutions in their 2015 white paper “Making Innovation Work,” today’s prospects are less influenced by peer influence, less responsive to embellished claims, less sensitive to price, and more sensitive to value.
They also have greater interest in having choice (in product, services, and contracts), intergenerational interaction, campus walkability, and a greater comfort with technology.
Echoing much of the national research reports for seniors (although to a much lesser degree), Love & Company’s regional surveys suggest that the vast majority of Continuing Care Retirement Community (CCRC) or Life Plan Community prospects, age 70+ with an annual income of $50,000, would prefer to stay in their houses as long as possible, with assisted living or home health being the tools that they envision helping them accomplish this task.
The next chart shows senior preferences for apartment home sizes, according to our 2013 survey, along side the inventory mix of one of our existing clients (an older community) and the inventory mix Love & Company is typically seeing with newer communities. We show our sample client as a demonstration of how this knowledge might shape your approach toward the future.
According to Love & Company’s 2013 survey, prospects prefer larger apartment and villa floor plans, with only 22% of the respondents selecting anything smaller than a one bedroom with den. In contrast, 44% of Client X’s current inventory is studio, efficiency, or one bedroom. Nationally, what we are seeing are newer communities with 0% studio/efficiencies, and only 15% one bedroom.
Interestingly, on a square footage basis, Client X’s inventory compares favorably. Again, it is the unit mix that raises concerns. As you can imagine, the mix of smaller units is particularly unappealing to couples. Only 10% of couples opt for a one-bedroom apartment, while 80% of couples have chosen a two-bedroom apartment with a den.
Attracting Younger Boomers and Seniors
Younger prospects typically result in a longer stay and therefore, a lower turnover. Using actuarial data to project length of stay for two ages a mere 2.5 years apart (79 vs. 81.5), being 2.5 years older results in a 5% higher turnover. When you have 250 residences, a 5% turnover means 12.5 apartment homes. By decreasing the average age of entrance by 2.5 years, you decrease the number of homes you need to sell annually. Lower turnovers result in a higher census, greater revenue, and lower marketing costs.
So how do we attract baby boomers? One thing we know is that contract offerings can have a dramatic impact. The younger group of seniors generally find one-price-fits-all LifeCare contracts to be financially unattractive. Rather than bundling service packages, they prefer unique-to-them options and custom packages, resulting in only paying for what they use. Additionally, younger prospects find the classic entrance and monthly fee contracts to be financially unattractive as well. Instead, they tend to gravitate toward reduced entrance fee options, ownership, and rental contracts.
The question of an appropriate product is also very much a visual and aesthetic question. Is your retirement community offering what today’s prospects are looking for, and are expecting? For older life plan communities that still have small residences with dated designs, it will be virtually impossible to attract a younger prospect unless they have a significant health need. Here are some images of newer communities as examples of what does work:
Updated Areas of Health and Wellness
Another factor that younger prospects find attractive is an updated wellness program. This includes integrated resident and staff activity, and newer wellness amenities. According to the Mather LifeWays’ survey, the percentage of senior living communities offering wellness programs for residents and staff will nearly double (from 40% to 78%) in the next five years. From exercise to dining, expect to see purposeful co-mingling of staff and residents in all parts of the campus.
Updated Campus Technology
To be considered truly current and competitive, a senior housing community must be Wi-Fi enabled throughout the entire campus. Residents will track the community’s daily activities through their tablets and computers. Daily reminders will also help with exercise and medicine compliance. Community designed apps created specifically for residents (think RunKeeper and MyFitnessPal) will bring new levels of integration.
According to Senior Housing News, 71% of seniors are going online every day, and more seniors are accessing the Internet from mobile devices than ever before.
Updated Contract Options
As discussed earlier, one-price-fits-all LifeCare contracts will no longer be the norm. These all-in-one contracts are financially unattractive to younger prospects, because they only want to pay for the services they’re going to use. Bundled service packages will need to be broken down, and paid for on an as-needed basis. Likewise, LifeCare will need to be priced by age instead.
As previously mentioned, large entrance fees and monthly service fee contracts are also becoming financially unattractive to younger prospects. Instead, they are interested in reduced entrance fees (fee-for-service), ownership and rental type agreements. Implementing more of these types of agreements will attract the younger prospects.
Elevated Dining Options
Expectations for senior housing dining are elevated in today’s world with celebrity chefs. Retirement communities like The Moorings (pictured below) are offering multiple dining venues including outdoor venues. Gone are the days with “dining rooms” which have been replaced with “restaurants.”
This means your retirement community should be thinking about ways to make your dining experiences upscale, and adding variety and options.
Previous: Part I, Senior Housing Trends, “What does the future of senior housing look like?”
For more information on senior living trends, and the future of senior housing, contact Tim Bracken at 301-663-1239.