Senior living can learn from cruise companies
By Jack Cumming
Residents in high-end, market-based communities often compare senior living with living on a cruise ship. Moreover, there are occasional stories of people who choose to retire to continuous cruising as opposed to moving into senior living.
Learning from Cruising
Senior living can learn from cruise companies. After all, while senior living has been relatively flat, despite a growing demographic market, the cruise industry has developed to the point where some ports are trying to limit the number of ships visiting.
Moreover, cruise companies have been very creative and imaginative in expanding their revenue opportunities. There is much that senior living can learn from cruising.
Let’s look at some of those ideas that cruise lines are using to grow revenues by giving passengers enhanced experiences.
First to mind is the idea of specialty dining. When my wife and I first started cruising, dining was rigid. You were assigned to a table and, by golly, you ate with those same people every day whether you got along with them or not. That rigidity soon gave way to more open seating and, ultimately, to “come when you wish” seating. This is where most senior living operators are today in their foodservice operations.
In recent years, though, cruise lines have added “specialty restaurants” for an upcharge. This has proven to be a popular revenue-enhancing innovation. This could be an option for senior living. One can imagine a high-quality, street-accessible restaurant product, open to the public for a flat price – like specialty dining on cruise ships – and discounted for residents. There might even be more than one such restaurant for the newer urban model senior living properties which are in high traffic zones.
Today’s younger prospective residents are used to having a variety of dining options. They are more likely to dine out than their parents were. They also have brand loyalties. The cruise lines recognize this by offering Starbucks or other branded coffee outlets, etc. For instance, a senior living operator could add a Subway branded upcharge product for a franchise price as low as $15,000.
Unique Adaptations to Senior Living
Still, dining is only a small aspect of how cruise lines have improved on their traditional offerings. Many cruise lines offer beverage packages. I know of no senior living enterprise doing that, though there’s no reason why they can’t. Many senior living communities have provider-hosted social hours. The cruise lines, too, have parties, but they generally confine free beverages, often just champagne, to special occasions like the Captain’s party.
Revenue opportunities abound, however. Princess Cruises charges $95 for a Chef’s Table which allows the onboard Chef to display her or his skill and handiwork. Why not a monthly Chef’s Table in senior living?
Cruise lines operate a profitable business in excursion offerings. Of course, most senior living operators likewise offer outings for a small charge, though it’s not usually viewed as a profit opportunity. Perhaps it should be. Some senior living operators act like travel agencies to put together attractive group travel opportunities for residents. That can be both attractive to residents and a profit source for providers.
Cruise ships routinely offer special occasion gift opportunities to allow friends and family of cruisers to honor people during their cruise. Families of senior living residents would welcome the opportunity to arrange appropriate gifts through the community website to be delivered to moms and more on special days. A gift of a day of pampering in the salon or spa could be a welcome lift for an aging loved one.
There are also items that senior living could offer that are not needed on cruise ships. Buying bread, cereal, and milk can become a strain for some people as they age and grow frail. There can be a revenue opportunity in facilitating grocery deliveries for those who need them. Of course, there are increasing outside grocery delivery services, but why have your staff deliver the last 500 feet without compensation when the community could earn revenue for extending food service to include a simple stock of groceries?
New cruise ships are regularly appearing while older ships routinely retire from the fleet and disappear to other parts of the world or into scrap. To keep their marketing fresh, cruise lines have to keep their product fresh and appealing. Most cruise ships go in for renovation and refurbishing, some more extensive, some just cosmetic, every three years or so. The hotel industry commonly follows a refurbishment cycle of seven years to be sure that their product doesn’t fall out of fashion.
Senior housing tends to take longer to respond to new trends, and some that do redecorate, retain specialized decorators who follow healthcare patterns making the community feel stylistic, cold, and off-putting. Healthcare décor is seldom something someone would want in their den or family room at home.
One can imagine senior housing learning from the cruise industry. There are sporadic examples of something like that occurring now. The July/August 2019 issue of Food Management magazine, for instance, gives “best renovation” recognition to Elim Park Place CCRC in Cheshire, CT. Connor Architecture replaced the outdated dining experience with three dining venues plus a “market”.
The cruise industry hasn’t formally entered senior housing . . . yet. They are making some interesting moves, though, including developing private island resorts. One can easily imagine them adding age-related support services to those private islands. All they would need is a healthcare partner to anticipate the changing needs of aging and to provide resources responsive to those needs. If done right, it might be a very affordable option for aging.
Already, though, the cruise lines’ private islands are considered safer than simply arriving in less-controlled foreign ports since the cruise lines establish security perimeters, sanitation, food, and other standards to match those in the U.S. Moreover, these private islands are not bound by U.S. labor laws and regulations, so the cruise lines benefit from cost advantages that inhibit U.S. located enterprises. Whether the U.S. requirements are more constrictive than what the cruise lines offer is beyond the scope of this discussion. It’s likely that some are, while many others may simply be overreach.
Back to Reality
The reality is that it is unlikely, for now, that cruise lines will enter senior housing even though there is much that senior living can learn from cruising business practices. Moreover, even if they did, it would be a minor challenge to the U.S. based senior serving industry. Most Americans prefer to retire near home and not overseas. The cruise lines are too used to operating offshore to want to subject themselves to domestic requirements.
Not many years ago, it was thought that the hotel industry might become a force in senior housing. That didn’t happen. There is a mythic story that the name head of one hotel chain pulled out of senior housing, fearing that the frailty of those served might lead to bad publicity. It takes courage to serve the aging, but it’s a high calling and one that we can all anticipate needing at some stage in our lives.
A conjectural premise though . . . pure speculation . . . is that if senior living can give residents the kind of experience that they now accept for residence in Active Living 55+ communities – ownership, vitality, and vigorous friends and experiences – then the industry will grow rapidly. It can help to learn from the experiential imagination and freshness of the cruise industry.
It’s rare that an industry disrupts itself and benefits from change. The railroads didn’t seize the air opportunity. More recently, retailing let the old mail-order business go, in favor of shopping malls, just as the internet was reviving home delivery.
Why is this so? Most businesses, as they become established, generate an internal politics that substitute administrative conventionality for the creative spark of innovation that led to the earlier success. It takes a no-nonsense entrepreneurial leader to drive the culture back toward innovation when disruptive forces appear on the horizon.
For the senior living industry, the demographic opportunity is coming on fast. The number of older Americans is growing. The only question is whether today’s senior living industry will benefit or if the opportunity will go to others.