Does America give us marketing insights on where we are headed here in Australia? If ‘yes’, we should be worried.
At our LEADERS SUMMIT in March we interviewed Stephen Maag, Director, Residential Communities at Leading Age, the peak body for America’s 6,500 Not For Profit operators. Here are a couple of key points:
Aged care homes
America has a population of 320M and 1.36M aged care beds. Australia is 24.6M and 181K beds. USA 0.004 beds per person and dropping. Australia 0.007 beds per person and growing.
- 82% occupancy across 1.36M beds and 15,600 locations (we have 95%)
- Total beds down 3-5% in the last two years despite a growing aged population
- Few new beds for 15 years. Little new construction and growing number of closures
- Not For Profit operators down to 24% (70% here)
Why the decline? America has embraced home care – same as the Government here is forcing us to do.
Conclusion: demand for aged care beds going forward is not guaranteed and can change quickly – especially if we do not fix up our image.
Remember, there are three Government enquiries that are now going to keep aged care homes in the news over the next six months and most of it will be negative.
New retirement villages as we know them have stalled – just seven (yes, seven) commenced construction in all of 2016 for the whole of America – a total of 1,609 units.
- Occupancy nationally is down to 91%. Australia 95-6%.
- ‘Assisted Living’ villages with no care component are even worse – just three are being built as we speak.
- The big lifestyle villages like Del Webb that you see in movies are still working but they are 100% lifestyle and are 1,000 residents and bigger.
The message – American consumers are staying at home, plus finding alternatives to aged care homes and retirement villages. We may not be far behind them unless we build our value proposition and market it well.
There is a lot more great information in the video of the interview with Stephen. It is 20 minutes long but worth it. Check it out above.