With the U.S. economy strong — including an historically long bull market — high-end senior living is booming. But as more developers and operators claim to be creating luxury communities, it raises questions about how to define “luxury” in this industry.
The leader of one well-established luxury provider, Vi Living, is skeptical about some of these newer entrants.
“There seem to be more people — more developers, what have you — promoting themselves as a luxury option,” Vi Living President Randy Richardson told Senior Housing News. “And then it gets into, really, let’s talk about that, define what that is. And I’m not sure they can answer you.”
Chicago-based Vi operates 10 continuing care retirement communities (CCRCs) across the country. The company was started in 1987 by Penny Pritzker, the daughter of one of the founders of the Hyatt hotel chain, who went on to serve as Secretary of Commerce in the Obama administration.
Originally called Classic Residence by Hyatt, the company re-branded as Vi but didn’t alter its high-end, hospitality-forward model. Richardson, who joined Vi in 2000, helped maintain this operating model even through the financial crisis and subsequent economic downturn. He spoke with SHN about the current state of play for luxury senior living, identifying some areas that Vi is focused on to differentiate itself from other players vying for “luxury provider” status:
Going beyond curb appeal
In some cases, it appears that a senior living community bills itself as luxury because it has more spacious, attractive common spaces and uses higher-end building materials and finishes than is typical, Richardson said. He argues that this is not enough to merit the “luxury” designation.
“There’s been an attempt [with some projects], I think, to update curb appeal, but within the building it’s not different,” he said. “The unit types are typical.”
Vi offers a variety of unit types. For instance, options at Vi at the Glen — located in the upscale Chicago suburb of Glenview — range from one-bedroom units to 2,000-square-foot “villas” complete with a garage. Entrance fees range from around $300,000 to upward of $1 million, depending on type of unit and level of refundability.
As for common spaces, Vi is intent on outdoing other communities. It recently built two new clubhouses in a redevelopment project at its Bentley Village community in Naples, Florida. One features community spaces, including two dining venues, a bar, library, meeting rooms and meeting spaces. The other consolidates all the physical activity amenities, such as two pools, multiple tennis courts, a spa, beauty salon, fitness center, yoga room, and a restaurant.
“These exercise spaces are not very productive in terms of not being leasable,” Richardson pointed out. “They’re part of the infrastructure, so have to bake it into the development from a financial point of view. But those physical activity spaces are the price of entry today, when you’re talking to an independent living customer.”
Even in assisted living, he added, pools are being seen as a welcome addition, along with the more typical therapy and fitness centers.
Staffing as a differentiator
A luxury community must provide not only a top-notch physical environment but five-star service — and to that end, having a large and consistent staff is crucial.
“We have arguably higher staffing levels, I think generally, having had the opportunity to peek under the hood with some different operations,” Richardson said. “I won’t say we’re heavily staffed, but higher than most other operators would probably go, both in the independent living and the care environment.”
Today, Vi has about 5,600 residents and roughly 2,900 employees, with close to 2,000 of those being full-time workers, he said. This facilitates a higher level of service across the board, be it in dining or housekeeping or in care services.
In addition, Vi’s turnover rate is about 20% on a yearly basis across the whole organization. This has been achieved through several initiatives, but Richardson emphasizes the importance of having a well-trained, well-supported management team.
“What we’ve found over the years is that the No. 1 reason people leave their job, if you’re paying them fairly, is their manager,” he said. “We’ve focused on training and development for those personnel.”
Other providers have tried to take a page from the hotel industry, incorporating training methods used by companies such as Ritz-Carlton. With its Hyatt DNA, Vi has some practices in place that are rooted in the hospitality world, but Richardson is quick to point out that simply importing training methods from the hotel industry is not a good idea.
“It’s very different than the hotel business, where your average business customer is a one- to three-night stay on average, and if you screw up you can hopefully recover with a free breakfast or room upgrade,” he said. “Our customers move in for the rest of their lives. We have to do it every day over and over again and if you screw up, you have to fix it.”
Maintain some level of exclusivity
In other industries, such as fashion, luxury is becoming more accessible. For instance, brands like Louis Vuitton are collaborating with streetwear labels, and rental services are making pricey clothing available to more consumers. However, some level of exclusivity still is a key ingredient of luxury, and one that Vi Living is focused on maintaining.
Dining is an area where this comes into play. Creating a custom dining program with gourmet offerings prepared by in-house chefs is a must, according to Richardson.
“When somebody tells me they have a luxury community and they have [a third-party company] providing food service, that tells me it’s not a luxury community,” he said.
The same concept applies to a provider’s overall scale and where its buildings are located. While he believes that a provider can have a larger portfolio than Vi and still offer a genuine luxury experience, selectivity is going to be baked-in to a truly high-end operating model.
“My mantra for our people is, I don’t care about being the biggest, just the best,” he said. ” … Would we like a few more [CCRCs]? Sure … But they’re not McDonald’s and Burger King, you have to find the right location. So the very nature of our product and what we’ve done, it makes it exclusive to begin with, [in that] you’re not going to find somebody building one around the corner … I won’t say they’re exclusive, but there’s some exclusivity, and especially if you have a premiere location, the real estate address is still important for the customer we serve.”
Leverage technology to improve but not replace services
The rise of technology such as ride-hailing applications and on-demand grocery delivery services could disrupt senior living in the years ahead, but making it easier for older adults to have their needs met with less assistance than they might need today. Going forward, Vi Living is not planning to back away from any of the services it provides, but it is interested in how technology can enhance its offerings and help increase efficiency.
“We think that’s where tech will find its home, in applications where we can improve the resident experience and maybe save money on the way, with one application or another,” Richardson said.
So far, the process is gradual. Some residents are using apps like Lyft and Uber, but these are not about to replace Vi’s own transportation services, for example. Still, Richardson has his eyes open for how technology is being deployed by high-end companies in other industries, and how consumers are responding.
“In San Francisco, you’re seeing high-end restaurants that can’t get enough serving staff, where people order off a menu on a tablet,” he said. “There’s some real changes taking place, if you look around in the world, not just in the senior living space.”
Written by Tim Mullaney