How Senior Living Operators Can Grow Revenue As Rent Increases Normalize

This article is part of your SHN+ subscription

The era of double-digit resident rate increases is coming to an end, and senior living operators will have to get more creative to find additional sources of revenue.

My view is bolstered by recent data from online senior living monitoring platform LivingPath showing how senior living rental rate growth is decelerating in 2025.

Average independent living rate growth ranged between 6.6% to 8.5%, depending on unit type, according to LivingPath’s analysis. Assisted living base rents ranged 7.1% to 7.8% so far this year, and memory care unit rates ranged from 6.5% for companion units to 7.3% for private units.

In 2024, annual rate growth reached its highest at 11.2% for independent living, 10.8% for assisted living and 11.5% for memory care, LivingPath data shows.

These compelling data points lend even more evidence to the notion that senior living operators must “be careful” with future price increases, or else they risk turning off new customers just as the baby boomer generation arrives at their doorstep.

Instead of raising rates, I see some operators adding revenue via ways of charging for care, wellness and lifestyle offerings or programs that let residents travel or access other things they want for an added fee.

In this week’s members-only SHN+ Update, I analyze three revenue strategies operators are undertaking and offer the following takeaways:

• How evolving care structures can improve revenue 

• How membership and travel programs help operators supplement their bottom lines

Adapting operations to better capture care revenue

Senior living operators have long tried to balance the cost of the care they provide with rates that more accurately charge for those services. In 2025, I think operators have an opportunity to find more ways to further balance what they’re spending and how much they’re making from their services.

By refining levels of care and launching new assessment tools, operators can achieve revenue gains without relying on rental increases, and at the same time strengthen their value proposition with incoming residents.

Earlier this year, Denver-based Solera Senior Living saw an increase in care revenue after partnering with a technology company to improve the operator’s ability to improve net operating income (NOI) generated by its communities.

To me, this shows a critical need for senior living operators to bulk up their care operations and be able to capture greater care revenue to move away from annual rental rate increases. Juniper CEO Lynne Katzmann told me she thinks increasing care revenue should only be a “short- to mid-term strategy,” and that the real goal is evolving senior living to its next iteration.

“We need to transition our product from a lifestyle product to an integrated hospitality, engagement and support product,” Katzmann told me in 2023. “Long-term, we’ve got to change the product mix.”

Bloomfield, New Jersey-based Juniper Communities is achieving that goal by adding new service lines to its operations; refining its Catalyst wellness program; and coordinating care, through which it receives a per-member payment each month.

“A lot of the things we provide, we have a mechanism for seeking reimbursement to be able to support residents,” Katzmann said.

Three years ago, Juniper also installed new resident care charge structures after some of its communities were inaccurately not charging for care-related services. Juniper and Solera are not the only examples of senior living operators taking new approaches to care revenue.

In 2023, Freehold, New Jersey-based Distinctive Living increased its care level to 10 different options for residents, capturing additional revenue while capitalizing on higher acuity trends. Similarly, Dallas-based Pegasus Senior Living retooled its assessment process to more adequately bill for care, adjusting to the increasing pace at which acuity changes for residents.

Other operators have taken steps to identify where care revenue might be getting lost. Cogir USA tracks costs and care levels of its residents and has a separate profit and loss statement for the company’s care department, CEO David Eskenazy told me two years ago.

Membership models to match costs to revenue

Senior living operators often say they want to offer a higher level of luxury and lifestyle for those who want it. But providing those services can be tough if they’re backed by simple resident rate fees, especially given the fact that not all residents in a given community use every service.

That is where membership models come in. Operators such as LifeStar Living and Holbrook Life are using membership models to pay for the wellness-focused lifestyle that incoming residents say they want. The idea is that residents can pay an extra fee to get access to services.

For example, Holbrook has two membership programs, with one aimed at residents and one for the general public. The membership program, called the “Holbrook Club,” contains tiers of programming, services and amenities and a focus on health and wellness. Perks for members include circuit training, balance training, aquatics classes and tai chi classes, with an added stipend to spend on dining, beverages and services in the community.

Scottsdale, Arizona-based Revel Communities uses a membership model within its independent living segment that includes a monthly fee that covers multiple services and amenities. The monthly membership includes access to an apartment, utilities, dining points, transportation, housekeeping, lifestyle programming and concierge services. Residents are able to purchase additional points outside of their monthly allotment.

Another example of this in motion lies with Tucson, Arizona-based Watermark Retirement Communities. In 2021, the company launched a one-time membership fee for new residents within its Elan and Elite communities. Through the program, residents got monthly spend-down accounts for use on meals and amenities, along with priority access to memory care, skilled nursing and rehabilitation services with a 20% discount on flexible spending.

These one-time and monthly models I believe will become more common, especially at lower acuity offerings, including active adult and independent living.

Using these types of monthly memberships could be a viable way for operators to increase their monthly ancillary revenue through crafting a specific program or club rather than pushing on rate increases. Memberships offer greater customer flexibility based on their ability or willingness to change their behavior on choices or incentives. Both one-time and monthly membership fees create recurring income and residents may be more willing to accept fees when they’re directly tied to exclusive benefits.

I also think operators can use membership models to change customer behaviors, and potentially change the negative perception associated with increasing rental rates. I think these consumer behaviors are already changing as older adults interact with subscription-based models for media, from Amazon to Netflix, as they become more tech-savvy. This could make it easier for senior living operators to market membership-models to drive ancillary revenue.

Another unconventional way I see senior living operators making progress in generating ancillary revenue in lieu of rental rate increases is through special programs that allow residents to travel to other locales throughout the country.

A 2024 hospitality survey by the Washington State University Carson College of Business found that 74% of baby boomers planned to travel within the next 12 months, and that just 19% of respondents in the boomer cohort reported spending “a lot of time” comparing costs and activities of their next trip, compared to 38% of Gen Z, 34% of millennials and 25% of Gen X respondents.

Travel also remains a priority for those over 50, with a 2024 AARP Travel Trends report finding 65% of respondents who said they planned to travel, spending on average $6,659 on trips.

“They’ve not declined in the amount of travel that they’re doing. They’re not spending any less…It shows a strong desire, strong prioritization, a lot of buying power strength,” AARP Senior Consumer Insights Manager Vicki Levy said in a news release regarding last year’s report.

Revel offers a “travel club” that allows residents to pick their next destination and live in any Revel community for one week a year.

In March, Carlsbad, California-based Kisco Senior Living launched its “Signature Travel Program” that lets independent living residents in its Signature-brand communities stay at other locations across the country, with the program launching after resident feedback. The program also will include a “vacation program” of planned trips available to residents. Also, Seattle-based Leisure Care partners with senior travel coordinators to plan resident trips.

Of course, not every senior living operator has the scale to launch a membership or travel program. But at the end of the day, I think these kinds of programs exemplify the creativity that some senior living companies are deploying when trying to reach new residents and keep them in their communities, and they stand to become increasingly important margin-drivers as they supplement more modest rental rate increases.

The post How Senior Living Operators Can Grow Revenue As Rent Increases Normalize appeared first on Senior Housing News.