It’s not news to you that senior living operators have been grappling with all-time low occupancy rates and increased expenses due to COVID-19. The silver lining in these challenges, however, has been the accelerated rate at which technology has been adopted.
Technology, more than ever before, is positively affecting older adults’ quality of life through tools such as telehealth, social networking and wellness apps. In addition to those benefits, wise executives also have recognized that revenue opportunities are associated with deploying more advanced technologies.
Senior living has changed forever as technology finally is being recognized as a strategic asset. Given the current occupancy rates, excess capacities on campuses have become available. Tech-savvy leaders are best positioned to capitalize on this space by offering their existing services to the growing segment of age-in-place older adults.
Quest for revenue
New sources of revenue can be found within the warm confines of senior living communities beyond simply “heads in beds.” Forward-thinking continuing care retirement communities, for instance, realize that they have a rich array of amenities and services to offer, including:
- Restaurant-quality food,
- Hair salons,
- Educational and infotainment programming,
- Health clubs and spa services,
- Wellness, yoga and fitness classes,
- Occupational and physical therapy,
- Memory care, and
- Access to skilled caregivers.
The “secret sauce” is to leverage technology to unleash the massive potential of those assets to generate new revenue. All of those services have value, so why not target aging-in-place older adults who would benefit from them services just as much as current residents?
The unique advantage CCRCs enjoy in their greater communities is that they are a trusted, often faith-based organization that employs staff members who are accustomed to interacting with and supporting this specific demographic and have tailored their service offerings to their specific needs. CCRCs provide the social fabric and convening venue. Combined with free community transportation services, those offerings are specific to older adults, so elders can have more meaningful experiences with their peers on campus than outside it. There is comfort in familiarity.
Age-in-place: A threat or opportunity?
Executives often view the trend of aging in place as a threat to their business model. But the swelling ranks of baby boomers hitting retirement age, projected to hit 80 million by 2040, represent a huge market opportunity. Those adults still want to be connected to a community and enjoy high-quality services, even if they want to remain in their homes. Why not embrace it by creating a marketplace of services for aging-in-place seniors, effectively creating a CCRC without borders?
Senior living operators should look to the examples of Uber and Airbnb, which paired unmet demand for services with excess capacity and then capitalized by making those services more easily accessible on demand. We believe CCRCs are uniquely qualified to capitalize by marketing their services to the growing population to generate additional revenue.
e-marketplaces require technology
In addressing revenue shortfalls, smart executives already have been exploring their options, including mergers and acquisitions, affiliations and expanding their services. They’ve taken steps to cut costs and become more efficient. But we all know you can only cut so much and become so efficient without hurting quality, burning out staff and threatening the ability to attract new residents.
The idea of a “CCRC without walls” has been kicked around for years now, and for good reason. Many operators have dabbled in piecemeal solutions with marginal success. Technology advancements, however, now offer a window to capitalize on this new business opportunity. By deploying enterprise solutions, operators can connect the large and growing market of middle-class baby boomers to the lifestyles and experiences CCRC residents have enjoyed for years.
The good news is that with the right technology infrastructure in place, CCRCs can create a marketplace to offer all of their services, from delivering high-quality meals to older adults who order online or from a mobile app, to providing transportation to those who want to get their hair done or attend a cooking class — or who simply want to socialize with peers at the pool, over a game of cards or for a drink. We acknowledge that not all providers will have the infrastructure in place at their campuses. Building up to this offering will take a commitment of resources, including time and money. Operators also would need to develop a new marketing effort to sell these services, execute and realize the full potential of these opportunities.
From a technology perspective, the e-market architecture is evolving and expanding, with advances in identification management, stronger cybersecurity tools, increased bandwidth and internet of things, or IoT, connectivity. With Wi-Fi in homes, and leveraging robust and secure networks, the foundation is in place to connect the needs of older adults aging in place now and into the future.
There’s no doubt that COVID-19 forced unprecedented rapid change and affected the entire industry, causing leaders to contemplate their future business models. Adoption of this new model will enable operators to flourish into the future as the number of baby boomers who reach retirement age increases exponentially (the youngest baby boomers are turning 57 this year). Creating a virtual marketplace represents a tremendous business opportunity for innovators who want to see their residents and local older adults thrive.
Steve McDonald is chief commercial officer of ThriveWell Tech.