Getting Help From Hospitality: Strategic Opportunities, Competitive Advantages, and Growth in the Assisted Living Industry Cheri A. Young, Ph.D. David L. Corsun, Ph.D. University of Nevada, Las Vegas University of Denver College of

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Getting Help From Hospitality Strategic
Opportunities, Competitive Advantages, and Growth
in the Assisted Living IndustryCheri A. Young,
Ph.D. David L. Corsun, Ph.D.University
of Nevada, Las Vegas University of
DenverCollege of Hotel Administration
School of HRTM

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A New Model for ALFs

• Similarity to hotels and resorts
• Driving profits through sales
• Focus on service quality and customer
  satisfaction

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Shifting Paradigm

• Break out of the medical paradigm
• A shift to the hospitality paradigm

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Todays Situation

• Overbuilding of facilities
• Length of stay overly optimistic
• Pressure on profits margins are shrinking
• Seniors want to age in place
• Neglect of human capital in ALFs

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Profit Sales - Costs

• Decrease sales?competing on price
• Cost cutting erodes quality
• Value

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So Whats An ALF To Do?

• Take advantage of seniors wanting to age in place
• Drive sales by offering value quality
• Invest in human technological capital for mass
  customization
• Partner with hospitality companies

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ALFs and Aging in Place

• Bring the mountain to Mohammed
• Provide ancillary services In-home aides,
  technology, rehabilitation services, geriatric
  assessment
• One stop shopping Let them age in place at the
  ALF

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Driving Sales

• Focus on service quality customer satisfaction
• Sell, sell, sell
• Have something to sell

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Lessons from Hospitality

• Do not forget to sell to adult children
• Hotel/extended stay rooms
• Bundle services
• Give them opportunities to spend
  money on their parents
• Outsourcing

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Health and Wellness

• Increase the length of stay
• Manage costs through acuity
• Revenue enhancement through wellness services

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Focus on Value and Quality

• Service-profit chain
• Minimize gaps between expectations and delivery
  of service
• Mass customization achievable with technology and
  human capital

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The Chain
Operating strategy/svc. delivery system
Revenue Growth
satisfaction
Internal Service Quality
loyalty
External Service Value
Customer Satis-faction
Customer Loyalty
Customer Value
capability
productivity
Profit-ability
-wkplc design -job design -EE
selection development -rewards
recognition -tools for svc.
-retention -repeats -referrals
-svc designed delivered to meet needs of target
market
-svc. concept results for customers
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Happy Employees, Happy Residents

• Correlation between employee and customer
  satisfaction
• Most difficult competitive advantage to imitate
• Invest in human capital via training, employee
  commitment, empowerment

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Cost of Turnover Lessons from Hospitality

• 3,000 EEs _at_ 6,000 per housekeeper
• 10 reduction in turnover cost savings of
  1,800,000
• Spending 600K to reduce turnover by 1 nets
  1.2M to the bottom line
• This amounts to spending 2K/EE

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Services as Theater

• What aspects of service make theater an
  appropriate metaphor?
• Performance service can only be experienced
• Those involved are playing roles in an effort to
  create an audience impression
• Much backstage work must be done to make the
  performance possible

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• comprehension of, evaluation of, and response
  to a service emerges over time, just as
  understanding of a motion picture or a theatrical
  production develops as the plot unfolds.
  Meanings are assigned to the many signs, symbols,
  and actions that are part of any service
  experience. Hence, services are not simply like
  theater, they are theater.

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Elements of the Experience
Actors - they are the service Customers perceive
the contact employee as the organization, not
just its representative Similarly, employees
perceive their managers as the organization, not
its representative Audience - casual interaction
with/observation of one another affects the
service Setting - influences expectations and
perceptions of the service Performance -
improvisational and must involve congruence among
the other elements
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Seeking Competitive Advantages

• Partnering with the hospitality industry
• ALF/resorts or ALF/vacation ownership
• Generate two important referral sources adult
  children and independent seniors

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ALF/Resort/Vacation Ownership

• Combine to provide familiarity
• Can gear for the 55 crowd
• Share laundry, housekeeping, FB, human
  resources, sales marketing
• Generate sales to ALF residents of resort
  services during off-peak hours

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Design Issues for ALF/Resorts

• Particularly important for appeal to non-ALF
  residents
• Locate rooms in pods or segments for increased
  flexibility
• Provide the opportunity for families to spend
  quality time together

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Recommendations

• Let them age in place
• Focus on both sides of the profit equation
• Drive service quality, value, and customer
  satisfaction
• Invest in human and technological capital
• Partner with hospitality companies