It’s Time for The Senior Living Industry to Adapt to a Changing Generation

July 16, 2024

By Joseph Cuticelli, chief operating officer and partner, Phoenix3 Holdings

Charles Darwin’s principle that survival hinges on adaptability rather than strength is more relevant than ever for senior living leaders. The industry sits at a critical juncture, with a rapidly expanding customer base and an often-outdated image that no longer resonates with today’s active seniors.

Technological advancements in smart homes, delivery services and accessible healthcare have empowered 74 percent of older adults to prefer staying in their current homes or downsizing, as revealed by the 2023 “Unlocking the Future” study from the International Council on Active Aging and the Age of Majority. In stark contrast, only 6 percent are considering a move to active adult communities and a mere 3.3 percent are inclined towards independent living or assisted living.

This data underscores a pressing need for the senior living sector to innovate and compete — not just with other facilities, but with the comfort of residents’ own backyards.

The good news is that the powerful baby boomer population has both the financial means and the willingness to spend on experiences that enhance their quality of life. In fact, this demographic controls over 80 percent of the wealth in the United States.

To earn a large slice of the $8.3 trillion annual longevity economy pie, senior living communities need to become aspirational, offering a lifestyle that is not only appealing but also tailored to the new aging experience. The senior living industry must pivot to deliver experiences that change perceptions from an “I have to go” life change necessity to an “I want to go” lifestyle opportunity.

Let them choose 

The concept of retirement is no longer a one-size-fits-all model; now it’s a personalized phase of life that reflects broader societal changes. Unlike their parents, boomers are a generation that has consistently sought to lessen the role of traditional institutions in their lives, preferring instead to carve out their own paths and make choices that reflect their unique preferences. The current perception of a stereotypical senior living experience completely defies this notion in every sense with group activities, scheduled meals and standardized living spaces.

Can you imagine eating at the same restaurant every day for every meal? It is a recipe for dissatisfaction. While the pandemic expedited some advances in autonomy with grab-and-go and in-room dining options, the shift was not dramatic enough to change industry perception.

Senior living community developers must step up with infrastructure enhancements that elevate dining to mirror what potential residents experience in their everyday life.

Take time to study the evolution of airport or university dining. Both are also serving a “captive” population, and yet the experience has completely transformed over the past 25 years.

Airports have evolved dining from bland to grand by collaborating with well-known chefs and brands, following global food trends towards healthier options, and investing in technology and infrastructure to improve the customer experience. Airport executives recognized food and beverage as a significant revenue stream and huge factor in overall satisfaction with the travel experience.

College dining has experienced a similar disruption, with dramatically more choices and higher quality, as well as evolving to offer flexible, tiered meal plans. Mobile and online ordering systems now allow students to view menus, track dietary information and see their plan balances. The added economic benefit for universities is reduced waste and better cost management. Today, dining has become a major selling point to attract and retain students.

The integral role of food in our lives doesn’t diminish with age; in fact, it often becomes even more critical. Dining generally ranks as one of the top five factors influencing the decision-making process for potential senior living residents and their families. The time has come for the senior living industry to invest in dining infrastructure, not just programs, so residents have the autonomy to eat when, where and what they like.

Standards of excellence 

To change the current negative perceptions of the senior living industry, developers and owners must raise the bar on operational standards and develop real-time measurement systems. How can we exceed expectations of potential and current residents if we have not defined and invested in systems to deliver and measure the outcomes?

Building a “want to go” senior living experience for today’s baby boomers requires a new set of minimum standards, along with investments in infrastructure, training, technology and people that mirrors complementary high-end experiences. Here are just a few examples of high standards in place at private jet services like NetJets, high-end retailers like Neiman Marcus and luxury hotels like Four Seasons:

Technology plays a role in creating new standards of excellence to mirror potential residents’ home experiences. For example, Hilton’s “Connected Room” technology allows guests to personalize and control their room environment using the Hilton Honors app. Guests can adjust the lighting and temperature, and even stream their own content on the TV. This innovation not only enhances the guest experience but also demonstrates Hilton’s commitment to integrating technology to meet modern guest expectations and preferences.

On the operations side, the Hilton CleanStay program establishes clear post-COVID cleaning and disinfection protocols to ensure guest safety and cleanliness. Under the CleanStay program, Hilton properties use hospital-grade cleaning products to disinfect guests’ rooms, which are then sealed. This standard has been implemented across all Hilton properties globally to enhance guest confidence in cleanliness and safety.

A critical aspect in delivering excellence is a commitment to seek client and resident feedback, act on suggestions and build a culture of continuous improvement. The senior living operators’ typical resident satisfaction approach of semi-annual surveys, suggestion boxes and focus groups will no longer suffice for two reasons.

First, boomers have grown accustomed to being asked for their opinion of products, meals and experiences. Whether it’s the oil change or the Amazon purchase, we live in a feedback-focused society that must become part of the fabric of senior living communities.

The second reason real-time feedback is critical is the high cost of losing residents. “Your most unhappy customers are your greatest source of learning,” Bill Gates said. Isn’t it more efficient to learn about opportunities to improve so you can fix them in the moment and for the future?

Invest in people

This leads to what may be the most important investment required to change the trajectory of the senior living industry. The only way to elevate the experience to exceed what boomers have at home — and create a “want to go” versus “have to go” mindset — is people. We are not selling a new luxury electric car or a pickleball paddle; we are selling a new way to experience and redefine what should be the best chapter of one’s life.

The time is now for the senior living industry to consider the employee ownership model that was recently featured on 60 Minutes during an interview with Pete Stavros, co-head of Global Private Equity firm KKR. Stavros advocates for offering workers a stake in their companies, arguing that it benefits both the employees and businesses. Employee ownership programs in senior living can align incentives with performance, reduce turnover, improve morale and inspire service excellence. It’s powerful and its time has come.

The industry’s response to the evolving demands of today’s sophisticated seniors is not about adding amenities — it is reimagining senior living to create environments where seniors can thrive.

By focusing on innovation, embracing technology and learning from other industries’ experiences, senior living operators can meet the lofty expectations of the baby boomer generation. The future of the industry lies in a commitment to creating enriching, autonomous and high-quality lifestyles that are far more appealing than traditional home ownership. This will ensure that we are on the right side of disruption and poised for a successful future.

Joseph Cuticelli is a partner and COO of Phoenix3 Holdings LLC. Prior to this position, he was the managing partner of Marleon Capital and head of seniors for Sodexo North America, responsible for a business with $720 million in annual revenues that serves more than 400 client locations.

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