Q. Are there important operational challenges that I should increase my focus on in 2020?
A. Certainly. Here are five key senior living challenges in 2020:
- Property company versus operating company: Sharpened strategies involving asset management (PropCo) and operations efficiency (OpCo) will be needed in 2020 and beyond.
- Labor issues: Staff availability, turnover and cost.
- Minimum wage increases likely will affect expenses.
- Operations cost creep will reduce profits and cash flow.
- Not consistently meeting a target stabilized occupancy of at least 90%.
The PropCo-versus-OpCo issue means focusing on the growing challenges of developing or acquiring and operating senior living assets.
To address challenges No. 2 to No. 5, operators must place a major focus on enhancing revenues, controlling operating expenses and sustaining high levels of occupancy.
Simply stated, favorable financial operations and cash flow must be consistently achieved and maintained.
This appeared in print as the “You’ve Got Questions, We’ve Got Answers” column.