By Rebecca Wiessmann
This article is based on a conversation with Bill Pettit, Co-founder of Black Dog Capital Advisors. Watch the full episode HERE.
The senior living industry loves to debate whether we should be healthcare or hospitality. Bill Pettit has spent thirty years thinking about this question, and in his mind the answer is easy: hospitality wins. Not because healthcare isn’t important, but because the economics and reality of what seniors really need point in only one direction.
The Economic Reality Nobody Talks About
“Here’s what I learned building Merrill Gardens: hospitality is what you can do at scale. Healthcare, when done right, becomes prohibitively expensive for everyone except the most affluent seniors.”
This isn’t philosophy — it’s math. The regulatory requirements, staffing ratios, and liability considerations that come with positioning senior living as healthcare drive costs through the roof. Meanwhile, most seniors entering communities don’t need intensive medical care. They need help with activities of daily living and a supportive environment that allows them to maintain independence as long as possible.
“Our focus should be on delivering not just a place to live, but community and services that people actually value and want to engage in,” says Pettit. “We should provide places people enjoy living in, not places they’re afraid they’re going to end up in.”
What Hospitality Actually Means
A hospitality-first approach doesn’t mean ignoring health needs. It means creating environments where wellness is supported through community engagement, proper nutrition, safe physical spaces, and care coordination—without transforming independent and assisted living into medical facilities.
Think about it this way: when you check into a great hotel, they anticipate your needs without making you feel like a patient. That’s the model. Make people feel cared for without making them feel cared-for-because-they’re-declining.
Unbundling the Old Model
Boomers spent their entire lives making consumer choices. Now we hand them a bundled service package with everything thrown in at one monthly fee and expect them to be grateful?
“We need to provide more opportunities for choices in aging. Unbundle the services. Let residents construct their own living arrangements à la carte,” argues Pettit. “If they want the full package, great. If they want to handle their own housekeeping but need help with meals, that should be an option too.”
This is how active adult communities work—and it’s why Pettit is betting on them through Black Dog Capital Advisors. Residents maintain full independence, with community-building programs and services available as desired rather than mandatory. The development creates physical and social infrastructure for connection while respecting residents’ autonomy to engage on their own terms.
The Affordability Crisis We’re Ignoring
Perhaps no challenge troubles Pettit more than the industry’s drift toward serving only affluent seniors.
“Over thirty years at Merrill Gardens, I watched as what started as accessible to middle-income seniors increasingly became squeezed to where it only served the affluent. Buildings got more expensive. We needed to pay team members well. But the economic equation shifted, and we ended up with a great business that was essentially locked to wealthy seniors only,” he recalls.
That’s not sustainable—not for the industry, not for society. The vast majority of American seniors simply cannot afford traditional senior living communities, which often cost $4,000-7,000 per month or more. As the boomer generation ages, this affordability gap will only widen.
Pettit’s solution is creating not a full-service solution, but one that provides the most valuable elements of senior housing in an accessible form. Active adult communities focused on building community primarily for single seniors, while welcoming couples, can hit price points that are genuinely affordable for middle-income Americans.
Technology as Enabler, Not Monitor
Increased investment in technology can simultaneously improve service quality and reduce costs—but only if communities approach it as an enabler of independence rather than a monitoring system. Boomers don’t want Big Brother watching. They want tools that let them maintain autonomy longer.
Where We Go From Here
The industry faces a difficult 24-36 month transition period. High interest rates, inflation, and elevated construction costs are restricting new supply. But opportunities will emerge for operators willing to experiment with new models.
The communities that thrive will prioritize hospitality over healthcare for independent and assisted living, unbundle services and embrace technology, and solve for affordability rather than accept that they can only serve the wealthy.
“I’m deeply optimistic about senior living’s future. The demographic wave is undeniable, and I forecast more money and profitable returns in the next five to ten years than we’ve seen to date,” says Pettit. “But capturing that opportunity requires questioning everything we think we know. It means recognizing that hospitality isn’t the soft option—it’s the only economically viable path forward that serves the vast majority of seniors who will need our communities in the decades ahead.”
