Market analysis
Openings and closures: examining the current trends
Mike Short, founder of CSI Market Intelligence, discusses current trends in care home openings and closures, and their likely impact on the sector over the next decade
A report published by CSI Marketing Intelligence last year showed a high number of care home closures compared to that of openings – a potential cause for concern given an ever-increasing demand for beds. Here, I look at what has happened in
recent years, and what will happen if the trend continues over the next ten years. My company has been publishing its annual Say Hello Wave Goodbye 1
report
since 2015. The report looks at openings and closures within the care home for older people market in England. Following a poor performance in 2022, we took a further look at the first six months of 2023. In compiling the data, we were mindful that the 2022 report showed the lowest number of openings for seven years and was around 23 per cent down year-on-year. Additionally, there was a net deficit of 230
160 140 120 100 80 60 40
Opened 4 per. Mov Avg. (Opened)
beds against a slight growth in beds that was achieved in the previous two years. The ‘half time report’ for 2023 was hopefully going to report a much-needed year on year increase against the same period in 2022, but alas this is not the case. Openings were the same and closures were slightly down, but due to a higher
Closed 4 per. Mov Avg. (Closed)
average size of those homes that closed there was a net loss (i.e. beds gained through openings minus those lost through closures) of over 1,300 beds against 400 in the first six months of 2022. Chart 1 (below left) shows openings and closures for every six-month period since the beginning of 2015, with openings at around 60 to 80 every six months and closures roughly between 120 and 140, so it seems to be a rule of thumb that closures continue to outstrip openings by two-to- one, and this is something the sector really needs to eradicate if we are to obtain any growth in the market.
More importantly, taking an average
over the previous two years, the latest trend shows an increase in the number of closures and a decrease in openings. Chart 2 (over page) The homes that close
Chart 1: Care home openings and closures 6 month period S1 2015 to S1 2023 36
are generally smaller than those that open, averaging around 30 beds and 50 beds respectively, and this somewhat reduces the impact of lost beds. Chart 2 shows the number of openings and closures by size of home between January 2018 and the end of 2022, with openings predominantly in the
www.thecarehomeenvironment.com April 2024
S1 2015 S2 2015 S1 2016 S2 2016 S1 2017 S2 2017 S1 2018 S2 2018 S1 2019 S2 2019 S1 2020 S2 2020 S1 2021 S2 2021 S1 2022 S2 2022 S1 2023
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