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From short-term stays to membership programs that set more creative pricing for residents, the senior living industry can go much bolder when it comes to revenue streams.
That’s according to Revel Communities COO and EVP of Resident Experience Danette Opaczewski, who weighed in on the topic during a recent appearance on the SHN+ TALKS webinar series. Opaczewski — who is no stranger to revenue management having been a CFO for multiple other companies — believes that providers can get more creative with what they sell residents and how they charge them for it.
Opaczewski and her team are helping to lead the way in that regard with several forward-thinking programs, including a “travel club” benefit and a short-term stay program where residents can move among Revel’s 13 communities; and a new membership offering that lets residents use points for purchases for various goods and services throughout the community.
“Don’t be afraid to try [new] revenue streams or look at your business differently,” Opaczewski said during her appearance on TALKS.
Revel is a division of The Wolff Company and has 13 communities across the Western U.S.
We are pleased to share the recording and this transcript of the SHN+ TALKS conversation with SHN+ members. Read on to learn about:
- How and why Opaczewski thinks senior living operators can go bolder with opportunities for added revenue beyond standard rates
- New membership-based offering for residents
- Innovating on luxury
- Revel’s future plans after pressing pause on its ground-up development growth strategy
[00:00:04] Tim Regan: I wanted to start with a state of play at Revel in 2023. I think the last time I checked in was a couple of months ago. How have things gone this year and this summer and walk us through maybe some of your big accomplishments.
[00:01:51] Danette: Well, I think the biggest accomplishment we’ve had is our launch of our new website. It took us about a year and a half to get it over the finish line, which was longer than personally I expected, but we did it. Part of it was we really built in real-time pricing, availability and online leasing, which happens in multifamily and 55-plus but not really in senior housing in any way. Our approach is focused on pricing, transparency, and really looking at how to learn within the website space itself.
I think websites in senior housing have been a little bit behind what other markets do in their web presence, and we focused really on looking outside the industry to say, “What does a best-in-class website look like, do? How quickly does it work? How quickly does it answer your questions and how interactive is it?” The fewer keystrokes, the better. We really focused on that as we built it out, and we had some hiccups. We rolled it out, tested it, and said, “Okay, this isn’t loading fast enough,” or, “We need new pictures,” and all that stuff.
That came out in May of 2023, and it took us a good 60 days. We had just an excellent July and August in our leasing results, and I think part of that is really just absorbing the website into our process and really using the tools we put in place.
[00:03:19] Tim: It’s an interesting time in the industry where folks are feeling there’s a lot of opportunity ahead. There’s also a lot of challenges and headwinds on the market right now. I’m curious, where are you still feeling the most pressure? What are you still concerned about here at the end of 2023, or as we approach it?
[00:03:47] Danette: I would say staffing in F&B and housekeeping is still a challenge. We’ve done a good job, and the wages we have are very competitive. The benefits we have are very competitive, but coming from hospitality, hospitality came roaring back in a lot of our markets that we’re in, and we’re competing for that talent. We’re trying to differentiate the job experience. It’s just a different job experience, and in some ways, it’s better.
The hours are better and the clientele is better, to be quite honest, in some ways. We’re really trying to leverage that. Housing sales have stalled, given the interest rates. We have a lot of prospects who laid down a deposit, are excited to move, and are just like, “My house isn’t selling fast enough,” or, “I’m waiting,” and so we’re just hanging around the hoop on quite a bit of depositors. We’re like, “Okay, that’s fine. Let’s take a deep breath. Keep moving.”
Utility costs are volatile in certain markets. I think those are one of the areas where we’ve really started to asset manage that. We’ve always had good controls, but now when you’re in hospitality and you do deep asset management in utilities, we’re starting to do that here — don’t leave the lights on in an apartment when you go in to check on it and things like that. Then other costs have stabilized pretty well. All of our contracts have stabilized in pricing. The one area I still think there’s a little bit of volatility is food cost.
We’ve really managed that from what I call a true restaurateur perspective, where you menu-engineer, you focus on daily specials that allow you to buy things that are at a reasonable price, seasonality, things like that. We do a lot of that cost control behind the scenes. I think we’ve stabilized a lot of our costs except for those that I’ve mentioned.
[00:05:38] Tim: Great. You mentioned hospitality roaring back, some competition there. Have those workers come to senior living at all? I can remember early in the pandemic some promise that they would flock to the industry as hotels and restaurants closed for the pandemic, but I am unsure that ever happened.
[00:06:19] Danette: In all honesty, I’m going to say yes. I think what’s happening is the people who truly worked in hospitality and left during the pandemic got disenfranchised and said, “Wait a minute, maybe there is something else out there for me.” In that timeframe, we were able to garner some talent from that space. Now that they’re working in our space and they’re enjoying it culturally and with the hours we have and things like that, I think they see the benefit to it and they’re telling their friends.
What we’re really focused on is that word of mouth, that there is some value. The other side of it is, I know you do this well in your space, but the education system and really getting into those high schools and colleges and saying, “There’s a real good career here, don’t kid yourself.” Part of our mission at Revel is to connect those dots for people. My daughter, honestly, she’s a hospitality major and she’s like, “Mom, we don’t even talk about senior housing that much.” I’m like, “Well, that’s a miss on our part because it’s such a great opportunity.”
She’s been spreading the word to her friends like, “Maybe you’d like working here.” We’re really focused on that. I would say, yes, I think the industry is doing well trying to garner those hospitality employees. I think part of it in my view is how food and beverage plays into this. In order for us to succeed in the future in the food and beverage area, we really are going to need those hospitality experts in food and beverage to come into the business.
I’m trying to make it interesting for those people who are interested in that space and saying, “Hey, you can still have fun in food and beverage in this industry. You don’t lose your ability to drink and dine as you age, to be quite honest. It becomes what you do as you age.” How do we leverage that a little bit more? I think there’s room for improvement.
[00:08:13] Tim: If you’re a Senior Housing News reader, you probably saw in July that Revel announced a new membership program with I think four membership tiers. That was really interesting to me because I’m just seeing the rest of the industry start to explore with some different ways to charge for services.
Can you describe what this membership model is at Revel and how this works?
[00:08:57] Danette: It came about as we were saying, “How do we explain the value proposition for independent living? Why would they choose to live here?” As we started really exploring that, a lot of our prospects and residents said, when we toured or talked, “I feel like a member. It feels good to be here. I feel like I belong,” and so we really started saying, “Well, geez, if you feel like a member, what does that mean?”
My background is I worked with membership companies like Soho House. They’re amazing at it. I learned so much in how they connect with people. I said, “Well, gee, there’s something here.” We went through and we built four membership tiers. We call them essential, which is the lowest tier. It’s like a dining option. It costs you less per month. Standard, which is our general membership. It’s where you enter if you want just the normal dining experience and your basic rent.
The plus tier is really for two people. Instead of charging a high second-person fee, you can just buy more points. What does that look like for you? Maybe you eat more and your wife eats less or whatever, it does balance out how you spend your money. Then we have something called a premium plan, which is basically, you get as many points as you want. It’s a lot of points, and you use it for lots of things. You bring your family in to dine, you buy things, you just don’t want to worry about it. We’ve explored that at Vegas and Palm Desert so far.
We’re rolling it out, we’re testing it, we’re tweaking it per community. It’s not the same price per community, but what it’s allowing us to do is really leverage all kinds of people out there saying, “I’m not sure I can afford you.” Well, yes, maybe you can, because here’s why, if you’re really interested. I think that’s exciting because you have the ability to move up and down tiers on a regular basis. Not every month, but every quarter, you can adjust, or you can buy more points if you just need a specific, “I’m going to host Thanksgiving. I want to buy a couple hundred points,” or whatever that looks like.
For us, it’s given us some flexibility. We’re testing it. Our residents so far love it. Most of the people joining it really do come in at the standard plan, and a year later, they either go up or down depending on how they’ve used it. That’s where we are. We’re really excited about rolling it out through the rest of our properties as we move into the rest of 2023.
[00:11:19] Tim: Has the membership program helped add some predictability to your costs?
[00:12:01] Danette: I think what it’s actually done is created a loyalty to what we do, both from a resident perspective and a team member perspective. The residents, because they feel like a member, they’re loyal to what’s in front of them. They speak out and say, “Hey, I’m a member here. This is what I want, or this is what I need.” Then as team members, we are in service to our residents.
We feel like the membership creates a higher level of expectation from a service perspective, so we have to raise the level of the quality of what we deliver to our residents. It puts pressure in both places to work together and build something that, I think, everybody enjoys doing. From a cost perspective, I think it’s a double-edged sword. I’m going to be honest. Part of it is, we do know exactly what people want. We monitor it every day, and then we also have to surprise and delight our members. We have to keep them engaged. That is, sometimes we have to be creative in how we do that, and not everything has a dollar value to it.
Sometimes it’s being creative at no cost or partnering with someone from the outside to come in and sponsor things and create something new. Leveraging my experience, again, with how membership models work and how you can create that experience, I think it’s a balance. I think you have to be pretty astute in what you are offering and know your business really well so you’re not overextending your costs, but at the same time, it does make us better operators.
I really feel like my team has to be on it to make it work, and so far so good. Our RSR program is a similar model, where you have to know the cost of that program in order to make it successful. I feel like membership is the same thing.
[00:13:55] Tim: Let’s talk about the Revel Travel Club here. I remember I was excited writing this story when it was announced that there was a short-term stay program that was being launched — I believe then it was called the Revel Travel Club.
I’m actually not sure if that’s what you still call it that given you mentioned “RSR,” but essentially, it was a model where residents could travel from different Revel communities as they liked in short-term stays with the idea being, if you wanted to spend part of the year here if there was a room available, you could. I thought that was a really interesting program. How has that program gone so far?
[00:14:57] Danette: Well, we actually have two programs. I’m going to differentiate them for you because they’re very specific. One is the Revel Travel Club, which is where, if you’re a resident of Revel, you get to stay at another community for a week, a year. Wherever you want to go, you stay there, you dine there, you don’t pay extra. It’s just part of the travel process, and we have something called a staycation suite.
We have a separate program called Revel Seasonal Residences. It’s three to six months. It’s open to both prospects and residents and it lets them sort of “Airbnb” in one of our communities. You get a fully furnished apartment with all the accouterments. You pay a flat fee, you get a flat amount of points. It covers everything. It covers your pet fee, parking — it competes with Airbnb. I priced it myself because I went through the process of saying, “Okay, what is this worth? Does it fit? How would we use it?” We’ve seen great success in some of our markets with it, quite honestly.
What’s interesting is everybody’s like, “It’s going to be great in Palm Desert or in Scottsdale in season when it’s great,” and it has been, but we’ve also seen it up in the Northwest in three months out of the year or whatever, up in Eagle, Idaho. We’ve had residents use it and they love it. We’ve had prospects use it and become residents. It gives them a chance to test.
I met a lovely woman from Tennessee whose husband passed away and her friend lived in California and I said, “Come visit.” She’s like, “Oh, I’ll stay here for three months.” Well she moved in and we love her. These are ways for us to connect to the outside community and share and break down that barrier that senior housing is a place you don’t want to live, right? It’s kind of trying to just break that stereotype.
[00:16:40] Tim: How does one price a short-term stay unit versus a more traditional year-long lease or something like that?
[00:17:03] Danette: You start with your monthly market rent, and then you add what you think is a fair amount of cost to cover your furniture rental and whatever other fees. We don’t charge a community fee on the seasonal residences because it’s part-time. Then you say, “Okay, here’s what my dollar looks like. Maybe it’s a $4,500 market rent and I’m going to charge $5,500 or $6,000.”
Again, you have to look at the seasonality of it. $6,000 is $200 a night, and in a hot market fully loaded with food and beverage, that’s a deal. How do you share that? What does that look like? That’s educating my team even. They didn’t know how to sell it or price it upfront. We had a long training and thought about it. In all honesty, it’s been really positive. I think the hardest part has actually been the technology behind it. I’m used to hospitality systems which allow you the flexibility for these kinds of things.
Leasing software doesn’t necessarily do that per se. We’ve worked quite a bit to figure out how to track technology-wise and utilize Yardi.
[00:18:27] Tim: Interesting. On the technology front, I’m almost wondering, a world where residents are essentially booking these almost as hotels? They’re going online saying, “I want to be here on these days,” and boom, it’s done?
[00:18:43] Danette: Why not? I say this, if you go over to Europe or you travel around and you want to stay somewhere for a month, again, why has Airbnb become so popular? Because it allows you to stay three, six months in a different location and feel safe and connected. Again, it’s not the cheapest option. Sometimes people are like, “Oh, it’s not.” I didn’t look at just Airbnb. I looked at Vrbo. I looked at all these other tools out there and said, “Okay, what is it that we could offer?”
What I’m trying to do is work towards demystifying what an amazing experience these communities are. Assisted living is an amazing place. It can be very helpful to you as you age if you take away the stigma of that you’re in a place where everybody around you isn’t feeling well. Eliminate that piece of it and just say it’s a great community and they’re in support of you as you age and you can travel around even if you need some assistance.
The amount of people traveling today in airlines using a wheelchair, for me, is mind-blowing. I think we have to just open ourselves up to, “What do people really want as they age, and how do we support that as an industry?”
[00:20:11] Tim: Yes. I’m assuming the incoming generation of older adults are also bringing with them a lust for travel, wanting to move around. If my parents are any indication anyway, that seems like that’ll be very popular in the future. We no doubt have some viewers out there who are probably thinking about doing something similar in their operations.
What does it take to do a program like this, and do you have any advice for any of our viewers out there who might be thinking to themselves, “Gee, maybe we could do something like this?”
[00:20:51] Danette: Again, it’s not a mystery. If you’ve talked through with any hotel operator, what it takes to do a daily transaction or a monthly transaction or what I call all-inclusive bookings or things like that, it really is a process. It’s the booking process, and how do you start with what’s included, what’s your base rate, and then how are you going to account for all of those factions holistically?
Then again, when you charge your resident for that flat fee, how does it then track into your P&L? How do you break it out? Because you’re going to have costs going against it as well. I think starting with fundamentally what I call the pricing and what’s included in that and then good communication. We use Cubigo a lot, and we’re expanding even more in that space with cubes and apps for various things. Making sure you’re crystal clear as you go through the process with your residents or prospects, how you’re selling it, and making sure that once they are in your community as they’re living there, that everybody treats them the same.
You’re not a short-term resident, you become part of that community for the amount of time you’re there. You’re embraced just as you would anybody in the Welcome Home Program. I think that’s what’s important is that you really, as an operator, think about what I call “pre-prospecting,” all the way till you check-out as your Revel residence. We give them a thank-you: “Thanks for staying with us. Tell your friends. Has it been good? Where did we fall short?” We learn from that.
I think having that process, that cycle within your operating team is super important. It can go wrong in many different ways, but in all honesty, for us, it really hasn’t. We’ve seen just a warm, thoughtful embrace on both sides. The team learned something new, and the residents and the prospects are enjoying the experience.
[00:22:55] Tim: I want to talk a little bit more about short-term stays. There’s another operator, in the Bay Area, Priya Living. They actually are developing a similar short-term stay concept overseas. This is for people from India living in the U.S. who want to go back to India and visit friends and families overseas.
I think in their model it’s like, “You spend a few months here at our community in India, we’re going to have all the things that you remember from our community in the Bay Area, and then when you head back home, if you ever want to come back, hey, we have this community for you.” I thought that was really interesting, this kind of anticipating where people are going to be going and offering them lodging and stays there. I thought adding the international component to that was interesting.
Do you have a take on this? I know obviously Priya and Revel are two fairly different companies, but something about the anticipation of someone’s needs seemed very interesting to me. I don’t know. Do you have any thoughts about that?
[00:24:04] Danette: I have read about Priya. I’m a voracious reader. I love to see what’s going on out there in the world. I love the idea. Why not? That’s how I look at the world. If we could create a platform where there’s some cohesive interaction, and we understand what each other is offering and our residents want it, or our prospects are interested in.
Again, life doesn’t end as you age. It ends when it ends. You still want the connectivity to your past, friends and family around the world, whatever that looks like. I was just in Spain and I was just amazed at how many people in their 70s and 80s were traveling and acting like they were 50. And it’s not necessarily a U.S. cultural thing. It’s like other cultures around the world embrace aging in a way that it’s just a positive experience. What I’m trying to do is hopefully imbibe some of that positivity into what we have to offer.
[00:25:12] Tim: Yes, absolutely. We could all use, I think, more positivity these days for sure. I know we touched upon this at the beginning of our conversation. I want to make sure I touch upon this just because this is such a big topic: Staffing.
Can you go back over what are the big pressures you’re still seeing on the staffing side and what do you think is going to be the pressures that last here in the next 12 months or so?
[00:25:49] Danette: Yes, I think, again, F&B turnover is still a challenge and not necessarily anymore on the wait staff side. I think that’s stabilized. I would say cooks are still an open issue. I think there’s maybe just not enough of them out there today, and we’ve got to continue to work towards that. Housekeeping, we have some really great communities where it’s just stabilized and we have other ones that it’s just a constant churn. We’re doing a lot internally to say, “Okay, how can we embrace seniority a little bit more and give people the opportunity to grow their wage and get great benefits?”
Drivers, I mean, the school bus driver shortage is real. Well, drivers are a real shortage and we pay a lot for our drivers. We value them. We use Lyft as well as part of our transportation costs. That’s gone up because of gas and other things. We really are analyzing transportation again as a business model and what that means and how do we leverage that a little bit differently? That’s been a big focus for us.
I think we talked a little bit about food costs, but we really are focused on that restaurant experience. There’s a lot in menu engineering, food waste data. We do a lot of analysis on your point earlier about food waste. I think our program, because we use Micros, which is a restaurant point of sale system. It really does give us the data we need so we can analyze how many specials we do sell and what they look like and how far out people are interested in certain things.
I would say use good operating tools to help us for the remainder of the year. Insurance as you know has just gone up dramatically over the last couple of years. It continues to rise. We’re trying to get creative with our deductibles and some other things in that space. I think that’s going to remain an issue. I think our maintenance has stabilized. We had some challenges in 2022. I think that stabilized.
I feel concierge, we have a really interesting resident experience pilot we’re running and hopefully rolling out in 2024. That’s really started to stabilize our concierge and really turning that into what I’m calling a hospitality-driven model. I have hired some really great young hospitality students to come in as our concierge and embrace that. Again, being in service to the resident just like you would in other places.
[00:28:27] Tim: Going back to something you mentioned in costs for a moment, insurance. I’ve talked to a lot of operators in the last couple of years who have said, “Yes, look, insurance is a rising cost item. Frankly, we don’t know what to do about it. We need insurance. This is just an uncontrollable expense.” Do you see insurance as an uncontrollable expense? Or is there anything you can do in your communities to bring down the cost of what you’re paying at all?
[00:29:00] Danette: Interesting question. As you may have known, as we’ve talked in the past, my background is finance. I was a CFO twice in my career. One of the biggest things I did in learning to be a good CFO was understanding the insurance industry and the markets and how to leverage your risk profile to try and at least maintain some semblance of control over your costs. I would say it is going to go up because the markets are rising. There are certain things you can’t control in that space, but there are a lot of levers to pull in every aspect of insurance.
You just really need to have a great risk manager working with your group, a broker that understands who you are and why you want what you want, and then leverage your claims against what you do. Don’t settle. If someone says, “Hey, this is just what it is,” say no. I always said I’ve worked with some of the big players, but I want a Chinese menu of options.
Tell me, if I want to stay flat, what would I need to do to stay flat, then let me make the decision. Let me take that risk, let me decide. That’s hard work. There’s real math in there. This was 15 years ago, but I went so far with one of my workman’s comp carriers to dig into their underwriting and stuff.
I was like, “Show me how you’re charging me this.” It got interesting because he is like, “Well, why do you want to see that? I’m like, “Because I can’t handle what you’re selling me.” It was fun to learn. I would say, in some ways, it is what it is, but I would say don’t just settle for it. There are things you can do and questions you can ask to put pressure in the system. I think more people need to do that, quite frankly.
[00:30:49] Tim: Yes. There you have it. Insurance is not an uncontrollable expense. There are things we can do.
I want to go back and just make sure that I ask this one more staffing question here. Earlier when we were talking about hospitality folks, what is working best to recruit people even from outside the industry? I’ve been told that for hospitality workers it’s, “Hey, come work for us and you’ll get your nights and weekends back.”
[00:31:31] Danette: That’s a big perk if you’re an F&B operator.
I have some really talented dining service directors, half of them have come through big hospitality houses and so forth. I asked one, “Hey, what brought you here?” He was like, “I’ll work 7:00 to 7:00, I don’t want to work 7:00 to 11:00. I have a family.” The younger generation, that whole flexibility of time off and hospitality can be hard. It can be fun when you’re working nights and weekends in some environments. I’ve done it.
Yes, it’s a good work experience, but at the same time, it depends on what’s happening in your life. I do feel like we have a lot of people we can tap into in that space and sell what we offer. I think, honestly, the wages and benefits in our space are pretty competitive and we offer a lot of opportunities to connect with people. It’s a little bit different. With hospitality, you’re not necessarily dealing with the same people and building a relationship every day, depending on where you work. In senior housing, I think the benefit to me over time is building those relationships with your residents and saying, “Hey, I’m actually enjoying this.”
I’ve had a lot of people come into the industry and say, “I didn’t even know it existed.” I didn’t either. I’m a big proponent of just sharing that there is opportunity and it’s a good work experience and culturally you can get a lot out of it. I do feel like the industry has potentially suffered, historically, from not sharing and showing what a wonderful place it is to work and maybe not paying for the level of service that was required. It’s like any business, you have to adjust and figure out the margin a bit differently. I think that’s what seniors are going through now.
[00:33:22] Tim: You mentioned your time as a CFO. We have an audience question related to that. The question is, how are you feeling about your ability to recapitalize your portfolio over the next two years? Where do you look for new capital equity partners for growth by acquisitions or potential developments?
[00:33:42] Danette: That’s a great question. We actually are going through this — on our radar for 2024, is a recapitalization process. We’ve already met and talked through a little bit with some institutional providers to say, “Hey, this is our vision and this is what we’re doing,” and it’s been very positive. To be quite honest, there’s some equity out there that’s fairly bullish on how we are going to service seniors in the future, and who is being progressive and how they’re handling it, and what kind of systems and technology are out there and how are you managing operationally your margins?
As long as you’re looking holistically at all these things, you can pull the right levers to drive the margin where you need to without hurting the experience. I go back to, you have to connect all those dots in one way. You have to be able to show that, “Hey, maybe this isn’t working, I’m going to try that.”
You can’t be afraid to say, “Well, this is our business model and we’re just going to stick to it until we fall off the rails.” We have to be flexible and adaptable. I think historically, as senior housing was starting institutionally through the medical system, it lost its ability to have that level of flexibility and business acumen. Now, through Covid and through the boomers, it’s just going to happen.
I think you and I talked about it a few minutes early before we joined, but it’s coming. Instead of just saying, “Oh, we’re going to hold on to see what happens,” we have to be able to say, “This is what I need to do to adapt. How do I look outside the industry? How do I hire talent into the industry and say, ‘Hey, be creative. Show me what you can do. How do you deliver on it?'” I think there’s some really smart people in the industry too.
I’ve met a lot of great people working in the industry now saying, “Okay, how do I move forward with this? I think that’s the key, continuing to leverage what it means to age and using the data. There’s such great data on seniors out there right now. How are we using it? How are we really, again, providing that what I’m calling “in-service” to the resident model versus the let-me-take-care-of-you model. There’s a care component that’s super valuable, but it doesn’t mean that person doesn’t want to feel independent and empowered. Even if someone is helping you shower, you need to let them feel like they’re in control.
That’s a really hard thing to do and not institutionalize it. You can’t cut your way out of it. It’s why 89% of people still live in their home. There really is an opportunity to create a communal environment that benefits you as you age if you de-stigmatize what that means. I think that’s one of the things we’re trying to do at Revel is just say, it can be a positive experience and we will help you on your journey.
[00:36:35] Tim: Great. We just touched upon that a little bit, but I think now would be a great time to ask this question. I think there’s a lot of thought out there about, “Okay, the baby boomers obviously are coming. They’re almost here. In some cases, they are here. Now we have to cater to them.”
They’re this huge audience. We still have trouble sometimes figuring out exactly what the boomers are going to want. I think you probably have some of them in your communities right now. What do the baby boomers want out of senior living in your view?
[00:37:27] Danette: I think it’s still a good question. I think it’s evolving. We talked a little bit, one of the questions you asked me earlier was about luxury and what is the landscape of luxury? I’ve read about this really interesting woman called Martina Olbertova, I don’t know if you’ve heard of her, but in 2019 she wrote something called the “Luxury Report,” and it just totally connected with me. Basically, luxury has moved from the product itself, meaning it’s just a well-designed, well-fabricated branded product, to an experience. That shift has happened over time.
You can carry two amazing bags, but one may give you a better experience than the other one, the way it was sold to you, the way you use it. For me, I’m really focused on with the boomers, what do you want in the experience as you age? What are the things that you look forward to? Maybe it’s just reading a book in a safe and comfortable place. Great. That’s okay. You don’t have to jump out of a plane to have a great life, but it’s understanding that individual nature. I think the boomers really want that individuality. They created the platform that is the “me generation,” if we go back to that.
How are we as a business connecting individually with people and then again supporting them, being in service to them and offering them I call it the ability to age with grace and dignity? That’s what they’re going to require. Whether we deliver it is up to us.
[00:39:03] Tim: You make a great point.I want to talk about sales and marketing now. Obviously, we touched upon this at the very beginning of our conversation. As you’re talking with prospects out there right now, what is really moving the needle?
[00:39:50] Danette: It’s interesting. We’ve morphed our sales in marketing quite a bit in just the three and a half years that I’ve been here. I think it’s still continuing to undergo a transformation. Part of it is because Wolff is a multifamily developer and they have a lot of tools in their digital space and how they connect that with their potential residents.
We are even starting to leverage the digital space more and social media more and really utilize that, because so many other markets do it so well. It’s like we have to learn how to do that and tap into it better as an industry. We do have some of our old-school senior housing ways of selling through Seniors Blue Book or whatever — awesome, but it’s not the future.
How do we balance those two things? I tell my team we have one foot in the old and one foot in the new, and we keep morphing and evolving as we go. I also look back to that pricing transparency conversation we’ve had briefly, but that’s new. You have to be able to, as a salesperson, articulate when you’re with a prospect, this is what you’re selling. People know what it is, but they haven’t visited all of the other communities that they want to go visit. They have to get that information and they have to dig deep to get that. Pricing [transparency] has only helped us, quite frankly.
The family members are like, “You guys are the only ones out there telling us upfront what it is. You may have scared us in the initial meeting, but now that we know, we love the fact that you guys are open.” I think it’s important. I think it’s coming. I think that there’s nothing stopping it other than the industry itself and how we use it and how we train team members to sell with it, because it’s hard. How do you do that? That’s important for me. I’m trying to make sure that we train and communicate and build talking points around it. Again, that’s why the membership concept helped develop this. It creates a platform to leverage pricing transparency.
[00:41:54] Tim: To go a little bit deeper into transparency, and this is my guess, I’m assuming that a lot of operators out there don’t share it because they’re afraid of sticker shock. Senior living is not cheap. It’s a service that I think a lot of people don’t understand how much it’s going to cost until they look into it. I understand the impulse. It seems like if you do offer price transparency, like you said, you need to pair it with other things, such as education. How do you make that conversation to avoid the reaction of, “Oh, my gosh, it’s how much a month?”
[00:42:33] Danette: I think for me, we call it “my journey” approach. We say, “Hey, you don’t have to sign on the dotted line today. This is a process for you and we’re here to support you in that. Whether you go to a competitor or not, this is who we are at Revel, and this is what it means. This is what’s included.”
As that comes to fruition along with the family members, to be quite honest, a lot of the family members get the math pretty quick when they start to do the analysis. Then you’re either going to get a yes or a no — “Yes, I get it,” or “No, it doesn’t make sense.” My dad was an engineer, a smart guy and very good with his money. He absolutely thought senior housing, frankly, was too expensive for him. I take this job and I go through exactly what I’m doing and he’s like, “Oh, I didn’t realize that it includes cable and it includes utilities and it includes transportation costs.”
He’s like, “This seems like a pretty good deal.” I’m like, “Exactly. [chuckles] Exactly my point. And by the way, you can come down and have breakfast with your friend every day.”
Part of it is that, it’s demystifying it. I think that it happens everywhere. You go on an all-inclusive vacation. It’s like you have to demystify the fact that everything’s included. What does that mean? What’s not included? You can go on an all-inclusive vacation now and half of it’s not included. That’s a new thing.
How do we in senior housing, again, take it to the point where it’s the value is the pricing? There’s a value in the pricing and the value is the experience and the concept that you feel connected as you age. That connectivity is super important.
[00:44:38] Tim: I wrote a story — and I think maybe you’re referencing this story — about luxury in senior living, that is more than just the shiny community. It is a feeling. I think that’s really interesting, luxury being a feeling. It also makes it, though, very abstract. Like, “Gee, how do I create a feeling? I can build a really nice building but how do I build a feeling? How do you work to instill that feeling of luxury, not just the material aspects of it, but really give people the sense, ‘Hey, I am living a luxurious life or experience right now?’”
[00:45:37] Danette: Yes. I hate the word luxury, to be honest. I’ve been in the hospitality business for a long time, and luxury was just such an overused word. I worked in boutique hotels, I competed with the Four Seasons, but my properties weren’t luxurious. What we created was an environment in which you felt something. For me, we translate that feeling into freedom.
For us, a luxury as you age is your freedom as you age. What we are trying to create is that experience to feel like you are free to travel or not, to eat what you want or not, to exercise or not, and how do you as a business build that into your service model? That’s really how we look at it. Again, when you feel like you’re in a place where you belong, that’s luxury.
I can go to a $10 diner and have a $10 meal and feel like it was a luxury. It felt right, the experience was good, the service was good, the pancakes were good, and I walked away going, “Hey, that felt like a luxury.” It doesn’t have to be $50 pancakes. It’s just a matter of training your team members to understand that freedom is important to people as they age, that you’re in service to them, that you’re there for them.
You can’t be like, when you’re talking about a residence request, “No, we don’t do that. No, it’s against the policy, no, you can’t have a friend. No, you can’t smoke here.” It’s about the yes, and: “Yes, we don’t allow smoking in our community, but we do have a place outside.” Because, by the way, if you’ve been smoking for 70 years, you’re not going to quit. You just need a place to go and not feel vilified. How do we do that in all aspects of what it means to age in place? I think that’s what we’re evolving towards. Is it easy? No, but is it the right place to go? I certainly feel that way.
[00:47:45] Tim: I want to make sure we get through some questions here, so I’m going to try to move down my list before we’re out of time. What excites you in the world of tech?
[00:48:19] Danette: Yes. My former career included running the tech platform for my two different companies as part of my CFO role. I was shocked when I came into this space at Revel like the lack of technology. I think I mentioned it in one interview a year ago or something, but our residents were not going to want to use technology. I’m like, “That’s not true.” Part of it is really just continuing to invest in technology. I love Cubigo. I’m a big fan. I think there’s a lot of opportunity. Robots, I don’t think they’re transactional, but sure, you can use them to vacuum your carpets or deliver food or whatever, so looking at where robots could be implemented.
Revenue management technologies, I think you and I touched on it early on, but there’s a real need for a strong revenue management software that combines hospitality and leasing that doesn’t exist today. If I was smart enough and had enough money behind me, I’d probably start it myself. But I do feel like there’s an opportunity that will come over time. Healthcare technologies — I’ve been talking to different healthcare providers, and that whole medical platform is evolving quickly. I think eventually it will be positive for the industry so that as a senior you can take your healthcare with you wherever you go, and it’s easy to figure out and manage better, and you’re not losing it or having to fill out 10 forms every time you go to the doctors or whatever that looks like. That just kills me every time I do it.
Then I’m optimistic about lead management in AI. I feel like we do have chatbots. I think they’re evolving and growing. Why can’t our chatbots speak multiple languages? I’m always shocked when you go into senior housing platforms and you can’t see different languages. There’s lots of people who are aging, especially now with the boomers, who speak multiple languages. Why can’t we do something like that? I think there’s just a lot of good coming into the industry. The younger generation is going to be working in the industry, and they’re going to want the technology. You’re going to have to have the technology in order to hire the talent that exists today.
[00:50:38] Tim: It feels like you can’t have a conversation about AI, particularly, without talking about ChatGPT and these other programs. Actually, in the last few weeks I’ve read a lot fewer stories about it so maybe the ChatGPT in particular craze is dying down a little bit. But as recently as only a few months ago, I remember it was everywhere, and it was the topic on everyone’s lips. And it still is to some extent. What is your take on something like that? It sounds like you think it has a place maybe in the sales and marketing process somewhere, maybe a place that’s not super defined right now.
[00:51:12] Danette: Yes, I’m with you. I was slow to adapt to it. I think it has a place. I think it has to be used effectively and not in lieu of human thought or connection. I don’t think we figured that out yet. Again, I think there’s places that can be used that make it easier to get answered questions that are clear and you verified the data, it’s correct. “How does that work?” They use it a lot in multifamily to create faster and more effective online leasing. Why not tap into where it’s working and try and leverage it? I think you’re right. I think there was a craze. I think we stepped back for a second, said, “Now what are we going to do with it? I think that’s where it sits today.”
[00:51:58] Tim: The whole Revel portfolio came together through development. Obviously, right now development’s still pretty tough. New construction has slowed down quite a bit still. If you have communities open, I think that’s great for your occupancy and the months ahead, but if you’re growing through development, it seems tough. What avenues of growth does Revel see ahead in light of those challenges? Does this mean that maybe pressing pause on growth for now, figuring some things out, and then in the future resuming?
[00:52:32] Danette: Yes, we did press pause coming into 2023. Quite frankly, we were looking out and looking at other deals fairly early in 2022. Then as we came through with 2023, we were like, “Okay, let’s stop for a second. Let’s focus on lease-up and then say, what are we going to do to regroup?” We’re looking to take all the different assets we have in different funds and collectively move them into one senior housing fund and then leverage that financially into either renovation acquisitions. I think there’s a huge opportunity.
I did a lot of renovations in my career in hospitality. There’s wonderful buildings out there that could be repurposed. It’s a matter of how and when and what does that look like, but that’s, I think, an area of opportunity overall in the industry. Then what does the ground-up build look like again? It will happen again. It’s very cyclical. When do you start going back into that space? To your point, what does it look like? We started out with less two bedrooms and more one bedrooms and studios, and we’ve morphed into more two bedrooms and cottages.
What happens when we take all of that and say, “What does that next iteration of it look like?” Again, there’s some developers out there doing some interesting things where they’re looking at multi-family with seniors, with younger populations all interacting in a community environment. Those are really interesting. I think there’s something to that, whether we partner with someone to do that or how Revel will fit into that, I don’t know. I find that’s also an opportunity to partner with other businesses and see how you create that community experience.
[00:54:10] Tim: It does seem like the trend is moving towards a more organic, intergenerational kind of community.
[00:54:26] Danette: From day-one — and even prior to Covid — but through Covid even as we could loosen it up, I’m a huge believer in making our communities part of the community. We do so many things to bring people into our community, again, and demystify that, and make people feel comfortable going in and out of our space saying, it’s just another part of life. You’re coming in and out like you would any other building whatever it is, a gym or whatever. I think that the industry does open itself up to and not be afraid to have people come in and out of your business, it makes you just a better business.
Again, just continuing the conversation around transparency, it’s not just about price. It’s about service. Don’t be afraid. Go there. See what happens, and then figure it out. If the industry can do that, it’s going to change in the positive.
[00:55:23] Tim: I also wanted to ask you about going back to something you mentioned, to acquire and redevelop or renovate. Are you talking about other maybe older senior living communities, or even are you talking about other kinds of properties? I think hotels were a popular target for a little bit. I don’t know if that is still the case. What sort of properties would you buy and then redevelop?
[00:55:48] Danette: You’d have to look at an extended stay property, for example. If you have an old extended stay property, why couldn’t that become a great little 55-plus, or independent living, or even AL community with the right upgrade? I don’t know, but I do feel like there is a housing shortage, we know that. There’s also a slowdown in single-family homes. The boomers have to sell. They’re just going to have to sell at some point. The single-family homes they’re going to be needed by the future generations. I think that’s the stall right now is in that space. How do you move the population into a place where they feel good about where they live?
To your point, it’s not always about the bright, shiny, new, it’s more about what did you create? I did high-end luxury, but I also did something called the freehand, which was a hostel and it was so inexpensive to build, quite frankly. But it created such great energy because we just leveraged the building for what it was. I feel like we could do that with seniors and create effective low-income senior housing as well. I think we need to figure that out as an industry, and again try some things and see what works.
[00:57:17] Tim: All right, we have about three minutes left in our discussion. We’re almost at the end of the year. Look ahead to 2024, what do you see on the opportunity list? Then to go back to that question earlier, what are you still worried about in the coming year?
[00:57:54] Danette: I’m very optimistic. I feel — having come through Covid, and now lived through this housing challenge and what’s going on in the markets today — like there’s such positive energy coming from the team members we’re hiring and from the residents who are coming in and looking for that. I feel like there’s opportunity. Again, I don’t feel like it’s not happening, it is coming.
I think what keeps me up at night, again, is revenue management and the revenue management process. The software is not there, we do a lot of manual stuff. I know what good looks like, so I’m trying to bridge that gap. I’m trying to figure out how to make it easier for my team. Because they’re the ones in it every day. I think cost control, we still need to figure out to your point earlier, when it’s utilities or insurance, or the fixed costs, interest on mortgages, they take a chunk out of your profitability. You can’t just cut your way to the solution. I’ve done that in my career, it doesn’t work. How do you raise the revenues?
What other things can you do to drive your top line? How do you make it an affordable experience or create, again, that value proposition? Our seasonal residences have helped us create that value proposition. Our travel club, we have a staycation program or a guest suite program where we have two hotel rooms within our communities where your friends and family can stay for $100 a night or whatever it is, and they get breakfast. You’re in Vegas, and your family member can stay for $100 a night. Of course, it’s booked. That’s just profit for us. There’s no cost to that, really, it’s minimal, it’s de minimis.
I would say don’t be afraid to try revenue streams or look at your business differently. I’m hoping eventually we open up our food and beverage to the outside community more or our salon and spa services, or our gyms. There are lots of things we could try and do to build that connectivity to the broader community that we haven’t tapped into.
[01:00:04] Tim: Well, that’s an exciting optimistic note to end on. Unfortunately, we’re out of time. I know we could probably talk for longer and I have questions I didn’t get to ask today. Danette, thank you so much for coming on this talk. Again, of course, thank you to Revel for making this possible. We will be back with another SHN Plus Talks here, I believe, in a couple of weeks. Stay tuned. Danette, thank you again. Thank you, everyone, for joining us. I will see you later. Thanks, everyone.
[01:00:29] Danette: Thanks, Tim. Bye.
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