By Steve Moran

As I’m writing this, I am heading home from the NIC Data & Analytics Conference in Minneapolis, and unsurprisingly there was massive exuberance about how the aging boomers are going to fill every single senior living community. The stratospheric expectation is that the demographic bubble will solve all occupancy challenges.

It is completely wrong thinking for four pragmatic reasons and for one moral/motivational reason.

The Pragmatic

  1. Even though the boomer bubble today, though modest, does exist, the occupancy growth numbers published by NIC and WelcomeHome suggest occupancy gains are anemic given the growing number of older boomers combined with the significant slowdown in new construction.
  2. Senior living continues to suffer from a severe reputational problem, and we are doing little to counteract the negative narrative. This is in spite of the fact that most residents and families report a high degree of satisfaction with the industry.
  3. The harsh reality is that, given higher interest rates and higher costs for labor, food, and everything, plus a push by capital providers to achieve higher margins, rates are going up. While there are still lots of people who can afford senior living today, it increases the incentive to figure an alternative to senior living.
  4. There are a lot of really smart people who are expending a lot of resources figuring out how to serve older people in their own homes.

The Moral/Motivational

You have likely not thought of it this way …

Every time the industry talks about how the demographic bubble will solve our occupancy problems, what we are really saying is, “We are not really all that good, but as the aging population increases, some percentage will be forced to consume our product, moving in because they don’t have other options.” Or perhaps even worse …

“There are today a few foolish people who choose senior living as a lifestyle choice, and that percentage will increase enough to fill every community.” 

This is fundamentally untrue.

But it means we operate as if we don’t need to figure out how to make senior living crazy attractive to more people. The result is a kind of complacency that keeps us from being all that we can be. It keeps us from being as amazing as we can be.

The Truth

The truth is that there are some great operators in our space with communities that right now have occupancy that is over 90%, and this will always be the case. Those great communities — the ones people want to move into, the ones that are providing great care and security — will continue to stay full, with many of them hitting 100% and being “forced” into creating a legitimate wait list.

Not only that, they will be able to charge premium rates.

Then … the rest will continue to struggle; they will limp along at 82% and wonder why they are struggling, wonder what happened to the bubble.