This refers to what is known as the Silver Economy, which encompasses all economic and industrial activities that benefit seniors. And it is a noble cause. As Jimmy Carter once said, a society’s nobility is recognized by how it treats its most vulnerable citizens. Seniors are part of that group.
To clarify the terms, nursing homes are medical facilities for dependent elderly individuals. Assisted living facilities, on the other hand, are residential spaces with individual apartments where residents can thrive in a friendly and secure environment, maintain their health, and receive services tailored to their needs.
Revenue Management in the service of nursing homes and assisted living facilities
In both cases, the resident rents a room or an apartment. As soon as there is a stock of beds or rooms, a price must be set. And it is the role of a professional to define it: a pricer.
To determine whether it’s reasonable to accept a resident with a limited budget, to whom a discount might be offered without compromising the facility’s profitability, clear rules must be established. This involves forecasting occupancy rates, managing discounts, overseeing the commercial effort, and handling acquisition channels to raise awareness among seniors. Managing operations is not a dirty word. Reflecting on the economic balance of the Silver Economy, with both clarity and humanity, therefore falls squarely within the scope of revenue management.
Practicing human and measured revenue management for the Silver Economy
Our discipline often faces criticism in the tourism industry, where it is seen as working against the interests of the customer. In reality, we don’t know of any business that works against its clients: that would be self-sabotage. Yet, it’s easy to focus on the negative side: fluctuating prices, high season being too expensive… However, the glass is also half full: it’s because Yield management can raise prices that it can also bring them down, sometimes very low, even lower than they would have been without it.
Of course, entering an assisted living facility or a nursing home is often a forced purchase, with no pleasure involved. Of course, we’re talking about seniors, sometimes in distress. But as always, revenue management knows how to adapt. It’s not about applying tools like overbooking or dynamic pricing here. But that doesn’t prevent us, with a sense of moderation, from finding the right pricing position, the proper segmentation of room types, the right approach to discounts and stay packages and the right exposure of stock through the right channels. It’s clean Yield management: more measured, more gentle, but still deliberate and serious. We’re talking more about commercial performance management than about Yield, since the levers, rightfully so, are more subtle and less powerful than elsewhere.
Keywords: Nursing Homes, Assisted Living Facilities, Senior Residences, Silver Economy, Revenue Management, Yield Support, RM Support, N&C, revbell