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LCS, Senior Lifestyle Execs Expect Gradual Recovery as Pent-Up Demand Returns

The recovery of the senior living industry in 2021 hinges in part on pent-up demand — but capturing it will be easier said than done.

As a result of the Covid-19 pandemic, move-in rates plunged last year, contributing to historically low occupancy rates across the industry. While the extent of pent-up demand is hard to gauge, sales leaders with two of the largest U.S. senior living providers believe it does exist. But that may not translate to a sudden occupancy surge once vaccination efforts take hold and the pandemic comes under control.

“It’s not a big snapback, from my perspective, it is a gradual climb,” Rick Westermann, vice president and senior director of marketing and sales at LCS, said during the recent SHN Sales Summit. “How we [are budgeting] LCS this year is to slowly start to climb back to normalcy in 2021 as the vaccine kicks in.”

In the coming months, senior living salespeople must work to regain the trust of prospects and their families in order to rebuild occupancy. Specifically, providers will need to make the most of the coming months to demonstrate that communities can provide an active and engaging lifestyle in addition to keeping residents safe.

“As an industry, that’s something we’ll need to tackle and throughout this year, to do better in that sales process,” Westermann said.

Rate of the recovery

Although it’s a widely held belief in the industry that pent-up demand exists, not all providers agree on how that demand will materialize. For example, different care levels might see recoveries at different rates.

Janine Witte, vice president of sales for Chicago-based Senior Lifestyle Corp., is confident that demand will return. But she believes that harder-hit product types will have a longer road to recovery.

“IL took the worst hit, then assisted living, and then memory care had the least amount of impact for us,” Witte said. “And it looks like it’s crawling back the same way.”

Westermann agreed that assisted living and memory care communities and units will likely bounce back first. But he isn’t down on independent living, either.

“You look at somebody’s quality of life — living in their condo, in their apartment, in their house — it’s not as good as it was in 2019, and there is still an advantage to coming to us,” Westermann said. “So, for us, it’s figuring out how we leverage that in the sales process.”

The rate of recovery will also likely vary from one market to another, Witte and Westermann agreed. And they have good perspective on that, given the scale of their companies. Senior Lifestyle operates a portfolio of about 200 communities across the county. LCS, through its Life Care Services arm, operates more than 140 communities, including many large life plan communities.

Already, LCS’ communities in Texas saw more move-ins between August and December than they did in 2019. And many of the company’s communities in the Midwest saw move-ins similar to Q42019 levels. In areas hit hard by the pandemic, like certain markets in the Northeast, LCS is seeing slower rates of new move-ins, Westermann noted.

For Senior Lifestyle, the Northeast took “the first prize for massive volatility” in senior living lead generation, Witte said. Senior Lifestyle’s communities in the Southeast also had a volatile year earlier in 2020 before falling in line in the third and fourth quarters. As long as that volatility remains, it will complicate the forecast for a recovery.

“For folks that have six, seven scheduled move-ins, and then there’s a positive case and those moves are on hold … there’s a good chance you lose some of those if you’re sitting on the AL and memory care side,” Witte said. “Because they just might not be able to wait that two weeks.”

So far, it doesn’t seem like the vaccine rollouts have had a noticeable impact on move-ins, and LCS saw “seasonal pickup” of inquiry volume in January, Westermann said. Still, the company saw encouraging trends in new resident tours that month, and is betting on a slow march back to normalcy in 2021 as vaccine efforts intensify.

“We’re not going to have as many inquiries, so how do we turn the inquiries we’re getting [into more visits, and , to grow that number every month over these next few months?” Westermann said.

But while there are promising signs now, the industry has a lot of ground to make up on lost occupancy. And it is not going to “recover 34,000 units in 2021, no matter how much we all want to,” he added.

Witte also believes 2021 will be a long road with some hurdles ahead.

“It’s going to have bumps based on [Covid-19] hotspots,” Witte said. “And it’s going to have bumps based on anything else that changes with the vaccine or additional media stories that come out.”

Tapping into demand

While the timing of a full recovery is still unclear, both LCS and Senior Lifestyleare getting more creative about the ways they maintain relationships with prospects, with the goal of nurturing them until they’re ready to make a move.

And no doubt, there will be setbacks along the way, and sales pros must stay determined.

“We can develop all these wonderful ways to nurture a lead,” Witte said. “But they have to be able to stay in the ring with them, and take the nos, and take the disappointment, and deal with the voicemails and the unresponded emails and the face-to-face that they won’t meet you for — and still keep going.”

The current state of play is one where salespeople will have to put in more work than before to see pre-pandemic conversion rates among new leads. And at the same time, there are fewer leads coming in. But there is a silver lining to this more challenging period, too, in that providers are more savvy than in recent years. And that may help propel the industry forward in the months or years ahead.

“If you look at all the messaging we’re all pushing out that we didn’t do in 2018 and 2019, we’re way better at it. We’re doing virtual book clubs, we’re talking about vaccine priority … and it looks different, it feels different, for the prospect,” Westermann said. “I think we’re going to learn some great lessons this year that are going to help us moving into the future.”

On the messaging front, Senior Lifestyle believes the Covid-19 vaccine can make a difference in attracting older adults and their families who are on the fence about moving into a community.

“More great stories around the vaccine are going to be important,” Wite said. “And how we can keep finding ways to put families back together with their loved ones that we’re taking care of will really make it all magic again.”

Rent concessions, a hot-button topic in the senior living industry, can also be a useful tool in capturing pent-up demand when used sparingly and smartly, Westermann said.

“For us, it’s figuring out how to leverage some to get leases signed, but at the same time, address our value that we have as an industry,” he added.

And Covid-19 has depressed occupancy all across the industry, necessitating a more aggressive approach on pricing as competition heats up, according to Witte.

“The whole country is in a lease up mode, very few communities really held their occupancy, we have folks that want to go home because the visitations drag on too long,” Witte said. “We have to not only win back what we need, we have to win back a little bit more, and then win back even more to make up for last year’s losses.”

The post LCS, Senior Lifestyle Execs Expect Gradual Recovery as Pent-Up Demand Returns appeared first on Senior Housing News.

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