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In 2024, many senior living operators have shifted from raising rates to keeping them where they are, and even offering discounts. While these concessions provide a short-term financial boost, operators must be cautious not to erode the long-term value proposition of the industry by relying too heavily on discounts. Amid a high inflationary environment, it is essential for senior housing operators to carefully consider all options to regain occupancy, rather than solely relying on discounts on resident rates.
Recent conversations with leaders of senior living operators including Pegasus Senior Living, 12 Oaks Senior Living, Anthem Memory Care, and Priority Life Care have highlighted the need for operators to revamp sales practices and emphasize improved marketing efforts in attracting previously unreachable older adults while using discounts sparingly.
For more details on senior living discounting in 2024, explore the following analysis:
- Recent data showing the pace of new concessions and how operators are offering discounts
- Operators’ strategies for offering discounts in 2024
- The impact of discounting on the long-term value proposition of the industry
In a recent survey by NIC MAP Vision, it was observed that senior living operators are offering rate discounts at a record pace across primary markets. Independent living showed the widest difference with an average of 16%, while assisted living and memory care operators also saw new highs in rate concessions. While discount strategies can drive move-ins and balance market dynamics, operators must be cautious about sustaining revenue growth amidst higher operational costs.
Operators are using various move-in incentives such as reducing rent, waiving or reducing community fees, and coupling discounts with rent reductions. The industry is at a major turning point regarding supply-demand dynamics, with operators expected to have more pricing power in the coming years, despite recent rate increases.
While short-term dynamics around rate pricing, discounting, and concessions remain fluid, there is a shift towards delivering consistent value and service quality rather than relying heavily on discounting for occupancy. The industry faces a delicate balance between offering discounts to increase occupancy and maintaining revenue to ensure long-term financial stability.
Operators are advised to carefully navigate the integration of discount strategies with value-based selling approaches to attract future residents. By coupling discount-driven models with innovative care models, high-quality amenities, and sustainable workforce practices, operators can redefine the industry’s value proposition and remain competitive in an evolving market.
Overall, maintaining value while strategically offering discounts is key to the long-term success of senior living operators. Finding the right balance between keeping rates stable and offering targeted discounts will be crucial in attracting older adults seeking quality care and amenities in senior living communities.
