As senior living operators continue to try to recoup COVID-19 pandemic costs, sales teams aren’t necessarily doing the best job selling value in the face of increasing prices, according to a marketing expert.
In a second-quarter survey of 100 senior living communities across the country, Bild & Co. found that senior living prices had increased an average of 30% across all care and service levels since 2022.
Assisted living saw the greatest pricing increase, more than 50%, likely due to increases in labor and supply costs, according to Bild. A 600-square-foot, one-bedroom assisted living unit cost an average of $6,322 per month in the second quarter compared with $4,200 per month for 631 square feet in 2022.
Independent living rates have increased almost 30% from 2022. A 440-square-foot independent living studio unit carried an average monthly cost of $3,829 in the second quarter compared with $2,950 per month for 445 square feet in 2022.
Memory care saw the smallest increase, 11%, likely due to consistent occupancy in the setting, Bild said. The average 501-square-foot companion suite in memory care, where more than one person lives, had an monthly price of $5,663 in the second quarter compared with $5,101 for 362 square feet in 2022.
Bild CEO Jennifer Saxman told McKnight’s Senior Living that communities didn’t raise rates during the pandemic, so many are playing catch-up to recoup their elevated costs. But the double-digit rate increases seen in 2021 and 2022 are starting to level off and drop back into the 4% to 7% range, she said.
At the same time, communities are increasing rates on care service levels to bring pricing more in line with actual services provided. Saxman said she is seeing increases in care rates landing between 6% and 8%, which hasn’t been seen before in the industry.
But many sales teams struggle to make the connection between rising rates and the value of a community. That leads to discounts and incentives, which challenges rate integrity.
“Everything has a price, but you’ve got to be able to value-sell it,” Saxman said. “Show the consumer why you’re worth that.”
Today’s prospective residents and their families, she said, are educated and looking for the best bang for their buck. Trying to increase rates on a 20-year-old building could create a question mark in the minds of prospective residents, she said. Selling a community’s value means investing in updates to buildings, as well as revamping programming and activities that are attractive to today’s buyer, Saxman said.
“It’s really that entire package,” she said. “The savvy consumer wants to know what it’s going to cost them and what longevity looks like.”
