RETAILIZATION EMBRACING
THE UNSEEN REVENUE STREAMS IN YOUR SENIOR LIVING OPERATION
By Aaron Fish Founder & CEO, Trestle Hospitality Concepts
I
n today’s environment of rising inflation, expanding operating costs, and ongoing labor challenges, operators are looking for ways to balance between driving revenues, managing margins, and controlling expenses. The obvious approach has and will be to make the tough choice to raise rates more than they have in the past. But at what cost to residents and prospects? Will this impact the slow but steady census growth we have seen in 2022? It’s obvious that unless current economic trends start to change, we are going to have to become creative about revenues. The way the industry views generating revenue needs to shift and creating new and reliable revenue streams will be key.
Why Do We Need Additional Revenue Streams?
As we look at rent rolls, what we find is mixed 16
news of recovery, stagnant census growth, and rent increases. With providers looking at rate increases of 7% - 13% in 2023, there are going to be tough conversations as marketers talk about higher rates, and executive directors work to close the proverbial back door with current residents. And expense struggles aren’t going away. Beth Burnham Mace, chief economist and director of outreach at NIC recently noted, “Rent growth, while rising, has not been sufficiently able to offset expense growth for many operators. As a result, net operating income has been hard to achieve for many — but certainly not for all — operators of senior housing properties.”₁ This is why we need to create new revenue streams that can support our communities and their operations.
But there’s another approach, and it is one that is starting to get some traction with forward-thinking companies. These operators are looking at the concept of “retailization”. But what is this and why do we need to do it? It’s actually a trend that is prevalent in other industries that senior living needs to get behind.
What is “Retailization”?
The term “retailization” means “optimizing sale(s) by connecting brands to shoppers through the power of retail thinking.”₂ For senior living operators, it requires a dramatic shift in the approach to our business. It requires the shift away from managing expense centers, and treating them as business units that can and do generate revenue. There are plenty of examples and models for the industry to emulate, and the best place to look is the hospitality sector. Hotels, country clubs, and even restaurants are sectors of the hospitality industry
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28
