What the Senior Living Industry Can Learn From The Evolution of The Hotel Industry
There was a time when the hotel-motel industry was in a similar developmental stage as the current state of the Senior Living Industry. It was fragmented and primarily comprised of “Mom & Pop” operators with single site ownership of small motels that dotted our main streets and back roads. That all changed with the building of the interstate highway system that took travelers off the rural routes and contributed to the demise of many of the “Mom & Pop” properties and the creation of “chains.” Perhaps this is interesting, but what does that have to do with the Senior Living Industry of today?
Who Is The Largest Provider of Senior Living in the Country?
Senior Living today is young, fragmented, and primarily dominated by independent owner-operators. A few years ago while working as a VP for Emeritus, I was stunned to hear Granger Cobb state that close to 50% of the market was represented by operators with two or fewer communities. While there has been some absorption since then, there is still a huge market share of independent operators. The reality is that even with the Brookdale-Emeritus merger, the largest provider of senior living is the independent operator cohort.
External Change Agent
The external change agent for the hotel-motel industry was the creation of the national interstate highway system. Motels were out and hotels were in and opening at every exit and interchange – conveniently located right off the highway. As national brands were born and began looking for ways to expand quickly to gain market share, they settled on franchising to aggregate the Mom’s & Pops under their brand. The chains wanted increased market share, revenue, and operating radius to capture more customers while the independent operators wanted to leverage the brand recognition & “packaging” (signs, uniforms, linens, etc.) and most importantly the reservation system to boost “occupancy.”
The National Association To The Rescue!
The problem was no consistent standards for independent operators existed and most did not have operational training. The chains needed to ensure that there was a consistent guest experience that favorably represented their brand, but each operator set their own standards – some good, some not. The White Knight in this story was the American Hotel & Motel Association.
The Association created an independent operator track within their national conference. This track was focused on training & development, offered a specialized curriculum for both integrated and private social events. This was good for everyone – the Association grew their membership because they offered something of value to independent operators who had previously been resistant to join; the independent operators were provided the information needed to qualify for a franchise opportunity and the chains had consistent standards needed to scale and grow. Later, a CHA (Certified Hotel Administrator) certification was created based on standards and training.
Who Will Step Up in Our Industry?
In our industry, the Associations seem to be dividing the operators rather than unifying them – not-for-profit, faith-based, CCRC, for-profit, in the pocket of the largest chains, etc. Many of the independent operators I speak with only join their state associations (mostly for CEUs) because they do not see value in the national associations. Unfortunately, the “One Voice” initiative that would have joined complimentary industry associations failed. However, ALFA has announced a rebranding and repositioning initiative, and this gives them an opportunity to follow the example of the AH&MA and become more inclusive of independent owner-operators. With a dedicated agenda designed for smaller operators and a certification exam, they have the opportunity to transform the industry.
So, the question is, who is going to step up?
What type of associations are you finding the most value in?