What impact is inflation having on seniors housing and how are operators and owners adjusting?
Give residents more options
By Chuck Hastings
Chief Financial Officer
With wages, food, utilities and other costs still rising, we at Juniper have been adding new price options for residents, and new ways of paying for them, to ease the pain for our customers. We’re also thinking about focusing price increases on level of care.
With all that said, it seems the odds of a recession this year are rising, so we need to prepare for that eventuality. While a recession will help with labor, it will force us all to revamp our sales and marketing tactics to keep revenue momentum up. And let’s not even talk about stagflation.
Short-term pain, long-term gain
By Dan Williams
Ally Senior Living
We have not seen the true impact it will have on us yet, but the end result could bring short-term turmoil in some product types. Needs-based products will do better than the lifestyle products. With construction costs and interest rates continuing to rise, seniors housing acquisitions and development may slow. That’s the bad news.
As an operator, we need to ride out this economic period like we did the pandemic. If new development slows in the short term, future demand will be all the more healthy once this inflation/recession period ends. There is no getting around the fact that demographic conditions will be strong. That is the good news.
Help your workers out
By Don Bishop
Historic inflation has replaced COVID as the topic of nearly every conversation and seems to carry a similar uncertainly and fear. This inflation impacts all stakeholders and the entire business model. Our dedicated associates who weathered personal health risks and long hours through the pandemic are now seeing their wage gains slip away. Gas prices at all-time highs are not helping either.
Our leadership team is doing its best to ease these burdens by increasing pay for hard-to-fill shifts and by giving out gift cards for gas. In addition, we are adapting and providing flexible schedules and meals for our associates, while centralizing and sharing services with other communities at our home office to keep corporate costs under control.
Rents must rise
By Matt Miller
There’s no question that inflation is impacting operators, on everything from wages to the cost of food. The primary way that operators are offsetting the additional inflation-driven costs is by raising rents. We have seen very little pushback from residents on this, as they understand the reason for the rent increases.