that have and continue to be constantly revamping and retooling their business model to meet the changing markets they operate in and maintain their revenue (and profit) potential. And senior living has 3 of these “untapped markets” that they can and should start capitalizing on to generate revenues that can be supplemental.


What are the “Hidden Markets” to Capture Additional Revenue?


For as long as I have been in the industry, any revenue that was collected outside of rent and care charges was not a focus or prioritized. Rather those areas were typically seen as expenses to be managed. But by instilling a profit mindset with these “ancillary” directors, you can tap into readily available revenue streams. Here’s the breakdown of the 3 readily available streams:


1. The Captive Market: Employees 2. The Service Creep Market: Residents & Families


3. The Main Street Market: External & New Customers


Viewing these groups as possible sources of revenue with your hospitality program (food & beverage, lifestyle/engagement, concierge) can open your community to not only enhanced revenue streams, but will inherently improve their quality as they are now being required to be of a higher quality to demand a price tag. The limit on how these markets can be tapped and your ancillary services maximized are really only limited by the quality of the teams managing them and the value placed on creating revenue by the corporate office.


What Kind of Impact Can These Streams Have on Operations?


In addition to the obvious revenue impacts that this can have, there are other considerations. Developing these programs and offerings into sources of consistent revenue requires a laser focus on operational excellence. The steady increase of revenue will have an impact on the asset value of a community as well. In one example of this, an operator was exploring the addition of a permit to add alcoholic beverage services to an independent living community in Texas. The addition of that 2 year permit costing $10,000 was estimated to increase the total value of that community by $250,000. This is before the addition of the revenue stream created by sales from the new program, which can also add additional value. Owners & investors can see valuations and overall NOI increases with the retailization of these programs, as well as the quality of them also improves census stabilization by providing a better product.


The demographics of our customer base are shifting and our customers will soon have an expectation of higher quality services and the willingness to pay for the additional services if the value is there. So it’s clear – the time to evaluate and implement this approach is now.


₁ NIC ₂ Lars Thomassen Connect with


Aaron on LinkedIn. Connect


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