Senior Living Providers Hope to Gain Market Share with Multi-Brand Portfolios

Kai Hsiao had a vision. Like many in this industry, Hsiao, CEO of the Portland, Oregon-based Eclipse Senior Living, sought improvement in his company’s penetration rates.

While this has always been a focus of senior housing leaders, the impending wave of baby boomers changes the equation. Boomers, by virtue of their generational profile, will be trickier to serve than prior generations.

Hsiao calls this the unspoken 88, as in the approximately 88% of seniors not yet in senior housing.

“You have 88% to 90% of the market that hasn’t found anything that appeals to them yet,” Hsiao says. “So what are they looking for?”

The solution gaining steam is a growing approach to the business: the multi-brand strategy. Senior housing operators are following the lead of the hospitality industry by building new product lines as separate brands, some with sub-brands.

The goal of developing these branded products is to capture an untapped consumer base and build new revenue streams. For his part, Hsiao is drawing from his experience in hospitality — he spent a year at Canyon Ranch as director of real estate marketing — and his time in senior housing to build what he calls a “family of brands” under the Eclipse banner.

But other organizations, including Maplewood Senior Living, Pathway to Living and Leisure Care, are also making multi-brand plays.

“Not all seniors are built the same — they have different wants and needs,” Hsiao says. “We are in a world of personalization. We are in a world of customization. I think as we begin to evolve as an industry, we need to speak to different segments of the population. Baby boomers aren’t just one big bucket. There are segments. And we need to be able to speak to different segments of that bucket.”

The four most popular senior housing brand types

Branded hospitality product lines are broadly diversified, reflecting the consumers that hotels wish to attract. Marriott International, for instance, has 31 individual hotel brands organized underneath five umbrella segments aimed at specific customers. The company segments around several areas, most notably price point, building style (such as a larger property suitable for conferences versus a boutique), length of stay, geography and activities or lifestyle.

Three people with three sets of needs and three different budgets who search for a hotel in Chicago, for example, could all end up staying at Marriott hotels, possibly without even realizing it. A look at Marriott’s brand map drives this point home:

Senior housing is a long way from being as diversified in its product lines as hospitality. It might never get there — and might never need to — as the landscape is totally different, considering the narrower age range of customers and the longer time spent in senior housing than in a hotel.

Yet the multi-brand lessons from hospitality are valuable, if only at a smaller scale, and as senior housing operators launch new brands targeted at specific consumer segments, they are defining their offerings by one of four traits:

• Price point
• Resident acuity
• Geography or environment
• Lifestyle

Of these, price point is emerging as the most popular choice by which to brand.

“Ideally, you would have three (brands),” says Dana Wollschlager, partner at Plante Moran Living Forward, the senior living development consulting arm of Southfield, Michigan-based Plante Moran. Wollschlager views the key segmentation for senior housing to be built around three consumer incomes:

• Low-income: for individuals at or below 30% of the area median income
• Middle-market: for individuals slightly above 60% of the AMI, but who cannot afford to pay an entrance fee and a high monthly fee
• High-end: for the “ultra-rich” — individuals who can afford a significant entrance fee, perhaps $500,000 or more, along with a monthly fee of $2,500 to $5,000

“You have to value engineer things for (a given) segment,” Hsiao says. “It’s being smart about who you are and being true to who you are. It goes back to, ‘Could we have a glass-cascading waterfall in the lobby?’ Sure. But is that speaking to the audience you’re going after? You can scare people away.”

‘A little bit country, a little bit rock and roll’

Hsiao’s approach with Eclipse’s “family of brands” offers a template of how senior housing can approach brand segmentation.

Eclipse currently has two brands, Embark and Elmcroft, which are segmented in two ways. First, they are segmented by price point. Both brands are middle-market offerings.

Second, they are segmented by resident health. Embark is for low-acuity seniors, Elmcroft for high-acuity seniors.

Eclipse launched in March 2018 by taking over management of the Louisville-based Elmcroft Senior Living portfolio; seven months later, it took the reins managing 15 communities formerly operated by Brookdale Senior Living (NYSE: BKD), and branded five of those as Embark, its independent living brand.

Because of these separate acquisitions, Elmcroft and Embark properties don’t currently share markets. Elmcroft has eight properties spread across the West, in California, Oregon, Washington and Wyoming. Embark has five properties near five cities all east of the Elmcroft properties: Buffalo, Chicago, Houston, Miami and Oklahoma City.

But the advantage of managing two separate brands with separate offerings is that Eclipse could place them in the same market, both aimed at middle-income consumers, and give them the opportunity to ostensibly age in place in the same city.

Going further along, Eclipse’s next plan is to add two more brands, this time as luxury lines. Again, these will be split by acuity: one low, one high.

At that point, Eclipse will have four brands in a quadrant: middle-market and luxury, low acuity and high. It will have the opportunity to capture more residents in the same market without diluting any single brand. Its brand map will look like this:

While Eclipse is segmenting based on price point and acuity, other operators are segmenting based on geography or lifestyle. Maplewood Senior Living of Westport, Connecticut, for instance, started with a price point-based product and then split that based on location.

Maplewood now has two lines: Maplewood-branded products and the forthcoming Inspir. These are both luxury lines offering independent living, assisted living and memory care. The branding split is over the line of what’s called “developed environments,” better known as urban, suburban and rural.

Maplewood-branded products are suburban. Inspir — coming first as a 23-story, 215-unit Manhattan highrise — is for consumers seeking an urban lifestyle.

“The way you have to look at Maplewood Senior Living (is that) the parent organization is broken up into different lifestyles,” says Gregory Smith, president and CEO of Maplewood Senior Living and Inspir.

“It’s almost like, ‘a little bit country, a little bit rock and roll.’ It’s suburban living vs. urban living. In both of those markets, luxury senior living is the core of who we are … (and) we look at the market and let the market dictate to us what we develop there.”

Branding by acuity now also means embracing the active adult product. Rather than leaving that product in the hands of all-ages developers, more senior housing operators are realizing that active adult is an opportunity to bring consumers under their umbrella at a younger age.

Chicago-based Pathway to Living launched its brand journey by splitting its assisted living into high-end with Aspired Living and middle-market with Azpira Place. In late 2019, it will add an active adult brand.

And when it comes to lifestyle branding, Seattle-based Leisure Care brands its properties based on the concept of “fun,” and defining that idea for the acuity level of their residents. So the company’s Five Star Fun umbrella includes IL and AL, while its Better Than Ever umbrella is higher-acuity AL.

A “Better Than Ever” community focuses on “fun” through the prism of maintaining good health: “excellent, fun delivery of AL services,” says Leisure Care executive vice president Greg Clark.

Meanwhile, the aforementioned Canyon Ranch is entering senior housing too, using its wellness model as a new lifestyle senior living brand.

As with every area of senior housing, the influx of baby boomers is changing the way operators think about its products, and how separate brands can impact revenue. Whether segmenting based on income, acuity, geography, lifestyle or some combination, an operator that can successfully deliver multiple brands will have an inside track at capturing a greater percentage of a senior population that is both larger and more diverse than ever before.

This article draws from the new report, “Multi-brand Strategies in Senior Housing.” Click here to access the complete report, which digs deep into the burgeoning multi-brand approach to senior housing, showing how operators are following the lead of the hospitality industry to address penetration rates and build new product lines that attract more seniors.