Brookdale Expands New Pricing Model After Revenue Increases

The nation’s largest senior living provider is progressing toward having a more market-specific pricing method for its communities.

After a pilot project, more than 170 Brookdale Senior Living (NYSE: BKD) communities now are utilizing the Senior Living Revenue Optimizer tool from Prorize, a company specializing in revenue management for rent-driven industries.

The tool crunches data to forecast supply-demand dynamics for individual markets, and then sets pricing accordingly.


Brentwood, Tennessee-based Brookdale achieved a “significant revenue lift” in the communities piloting the Prorize system, according to a press release issued Tuesday.

The company is not disclosing the exact revenue increases, Doug Vaughn, vice president of revenue management at Brookdale, told Senior Housing News.

“During 2016, we piloted the pricing system in 24 communities with a wide range of size, geography and demographics,” he explained. “The pilot results were measured against a scientifically selected control group, and the revenue lift was based on revenue generated from new sales during the pilot period.”


So far, the tool has been deployed exclusively in independent living. Plans are being put in place for a rollout in assisted living and memory care, but “the optimal schedule for implementation” has not yet been determined, Vaughn said.

While the company has scaled up from 24 to 170 communities in a year, it still has a way to go before the whole enterprise is on this dynamic pricing system: Brookdale operates about 1,100 communities nationwide.

“We will continue to learn from our experience in the independent living product and refine both the system and our processes,” Vaughn said.

Brookdale is touting wide-ranging benefits of the pricing system, including that it frees up staff to focus more on prospects’ wants and needs. It has led to “multiple change-management activities,” President and CEO Andy Smith stated in the press release.

If the Prorize name rings a bell, it could be because another senior housing giant also is using the system.

Holiday Retirement, the nation’s largest independent living provider, has been extolling dynamic pricing for a few years, saying that it eliminates the need for discounting and eases negotiations with prospects, allowing for a more effective sales process. Currently based in Lake Oswego, Oregon, Holiday is in the process of relocating its corporate headquarters to Winter Park, Florida.

Providers have tried to curtail the use of rent discounts in recent years, turning to dynamic pricing and other strategies. Discounting became prevalent in the years following the financial crisis, but many voices in the industry say that the practice sends the wrong message about the value the senior living product, and that discounts can be ultimately detrimental to companies’ profits.

Written by Tim Mullaney

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