It’s crunch time for senior living operators looking to increase occupancy, but exaggerating occupancy levels may end up cultivating negativity from prospective residents rather than snagging sales, according to one industry expert.
In a new occupancy trends white paper, Bild & Co. CEO Jennifer Saxman said that 40% of communities are mentioning that they have a waitlist. That list, however, actually might be just for one style of unit.
“This breeds this mentality we often have of, how can you have a waitlist but only be 89% occupied?” Saxman said, adding that talk of waitlists leads prospective residents to conclude that a community doesn’t have any units available.
“We want to be full; we want zero lost revenue days. But sometimes we get so caught up in our image that the information we are putting out there is counterintuitive to what we’re trying to do,” she said.
Saxman said she has seen many high-occupancy communities that have several units offline at a given time because they are awaiting new carpeting or another upgrade. If the operations and sales teams are not in sync, and if the maintenance team doesn’t understand the importance of having rooms available to sell, then an operator never is going to get to the point of having zero lost revenue days, she said.
Listening to prospective customers
If a prospective resident or an adult child is asking many occupancy-based questions, she said, then it’s important to get to the root of the person’s concerns. Is this individual worried that staffing levels might be low, for instance, or that a community is so full that it will not be able to care for a loved one?
Sales professionals traditionally want to inflate occupancy, Saxman said.
“We understand the thought process, but the way to win someone over is to focus in on the ‘why,’ ” she said. “Getting into a discussion about pricing or what we have available and scarcity, and why you have to make a move now, is so premature to the conversation.”
The danger to providers, Saxman said, is that they will make too many concessions, thinking that they have to compete with their neighbors.
“Stop and be different and say, ‘What is important? What are you looking to get out of a community?’ ” Saxman said. “We all want to be full, but there are so often barriers preventing us from getting to zero lost revenue days.”
Second-quarter occupancy trends
Between April 1 and June 30, Bild & Co. conducted more than 125 market surveys with senior living communities across the country, looking at occupancy trends in independent living, assisted living and memory care.
The average senior living community stood at 88.49% occupancy, with 17% of communities at 100% occupancy. Sixty percent of communities had occupancy of 80% or more. Occupancy in memory care was highest, at 90.66%, followed by assisted living, at 89.93%, and then independent living, at 87.07%.
Assisted living’s rebound success is tied to its ability to support a large population with a variety of needs — including memory care — as well as pent-up demand from individuals who likely would have moved into independent living but now need more extensive services, Saxman said.
Independent living, on the other hand, is struggling to differentiate itself from 55-plus active adult communities. As the needs of independent living residents increase, communities are offering more services. Saxman said that that change actually has been a detriment to independent living, because it “makes you less independent when you’re offering services.”
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