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Home care: something to think about from the Aged Care Royal Commission

The Royal Commission into Aged Care Quality and Safety will roll on until at least December.

Over the next two weeks expect some ‘crisis’ news in the media given the witnesses being called.

But it is not all bad news. The people who know say that 25% of the Royal Commission is about the bad stuff, but after that is out of the way, 75% will be the good stuff – how do we make aged care better.

For retirement villages, one of the submissions is really interesting.

The big home care provider Enrich is pushing that Australia looks at Denmark. 20 years ago, Denmark had a system like ours where we accepted that people get old and simply get more frail and sicker until we die.

The Danes turned their system upside down, saying ‘let’s keep people well as long as possible’. They increased home care support from 25% of their aged care budget (same as ours) to 50%. They also said people had to take responsibility for their own health.

In 20 years, their number of hospitals has dropped from 92 to 35. They have half the people in aged care that we do (as a percentage).

People who take responsibility for their own wellness future and get supportive home care live longer and avoid hospital and aged care homes.

Does this sound like retirement villages? You would be aware that the Australian consulting firm Grant Thornton’s research shows retirement village residents live five years longer than the average Australian, and they are far less likely to go into residential aged care.

Commissioner Lynelle Briggs like these ideas. She says herself that the aged care system “needs to be turned upside down’.

‘Assisted living’ is the increasingly popular label for retirement villages supporting increasingly frail residents in their own home. It has a big future. But its success will depend on the quality of Village Managers.

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Key things to help you everyday Latest industry developments Reporting Results

Code of Conduct and training of Village Managers in your Village budgets

If your village operator is a member of LASA (Leading Age Services Australia), the Retirement Living Council or the Property Council, you will be looking to implement the new retirement village Code of Conduct between now and December.

The Code of Conduct is a 30-page document that outlines how each village intends to conduct itself with residents. If you would like a copy, click HERE.

The Code is voluntary but there is a big push coming for every operator to take it up. Ask your boss!

Village management has until December to implement the Code. From January the requirements must be operating and each village accountable.

‘Severe’ breaches of the Code will result in the village being ‘sanctioned’ – named and shamed on the industry website.

From the picture at the top, you can see that ‘training’ has to be seen to be provided to you, and for it to be real and relevant training.

Have you got training in your 2020 budget? Have you discussed with your operator who will pay for training? How much should you allocate?

A tip. A KPMG focus group of operators all said the operator should pay and nominated $2,500-$3,000 for two days training, as a start.

This is an investment in your village, the success of the Code of Conduct, and of course yourself.

Our VILLAGE SUMMIT has been built around the Code of Conduct and the new accreditation system. (More about accreditation next newsletter).

Learn more about the VILLAGE SUMMIT HERE.

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Latest industry developments Reporting Results

April/May/June peak tyre kicking months – get ready

The best time to go fishing is when the fish are jumping – and the retirement village buyers should be jumping for the next three months. But are they buyers?

Check out the graph above. This is the sales action for Aveo across about 80 villages for the last two years.

The tall mid blue column is the average weekly appointments potential customers make to visit a village for the three months of that quarter.

The light blue column is the average weekly seen appointments – the number of people who actually turn up.

The dark blue column is the average number of sales made.

We have circled in red the Fourth Quarter – April/May/June. You can see they get more potential customers ‘walking down the drive’.

However the actual sales rates don’t vary that much throughout the year.

For Aveo it averages 19 sales a month, every quarter.

This makes sense because things happen in people’s lives every month, causing them to consider downsizing from the family home to a safer, more supportive community.

The moral: treat every month as a peak selling month.

What should be the sales ratio to enquiry?

The Aveo figures are interesting. They currently get approximately 180 people each week making an appointment to visit a village. 120 people actually show up – that 66%. From those 120 people around 19 actually buy; that is 16% or just under one in every six that walks down the drive.

Compared to normal residential sales that is a really good ratio. Imagine a real estate agent who knew he only had to show six people a home to get a sale.

On the other hand, there are village marketers that average one in three inspections generates a sale. Maybe their villages present better.

In our opinion the key selling feature is you, the village manager. It makes sense that if you are positive and confident about the product you represent customers will be reassured they are making a good decision – especially as you will be staying with them in their journey, unlike most salespeople.

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Key things to help you everyday Latest industry developments Reporting Results

NSW government to limit weekly fees for departing residents – max.42 days

Do your village contracts require you to charge a departing resident or their family or their estate ongoing weekly fees until their village home has been reoccupied? Most do.

But if you are in New South Wales the limit is about to be fixed at six weeks (42 days).

This means that after six weeks the operator is likely to have to pay the fees for the vacancy unit into the village budget.

This is really going to hurt a lot of operators, especially with slow sales and building vacant stock.

The average village home now takes over 300 days from when it becomes vacant to being reoccupied. That is 43 weeks, meaning in NSW the operator will be paying 36 weeks worth of village fees. At $100 a week that is $3600, or $36,000 for a 100 unit village that has a 10% turnover a year.

Is this new government ruling fair? On paper, no. If a normal lease tenant departs before the lease is complete they are responsible for the fees until the property is relet. However there is an argument that operators both take their time to relet and because they control the sale process the departing resident has no chance to intervene.

Irrespective, it is likely other states will follow the New South Wales government.

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Reporting Results What the research tells us

January is peak sales enquiry time

Did you know that this week is the biggest new village sales enquiry of the year?

January 10-17 always generates the most visits to our website villages.com.au with a seasonally high number of people clicking on phone numbers and website links, connecting with you, asking for information.

See the graph above.

This translates into sales over the next three to 12 months.

Why is this so? Obviously, Christmas time is time for reflection and discussion by potential residents and their family. There is likely two discussions. Either an event has occurred and it is time to look at the options, or for people who plan ahead they are doing just that, thinking about the next 10 or 20 years of their lives.

In 2018 the number of people coming to villages.com.au searching for a retirement village grew by 19%, now up to close on 900,000 people. This is massive.

It shows that retirement villages remain a really desirable accommodation or lifestyle option. Village managers can be proud of this.

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Reporting Results

Retirement villages not included in Royal Commission

You must probably have heard but we will confirm that the Royal Commission into aged care has not been extended to include retirement villages. 

This is despite a concerted push by the consumer advocacy Law Centre of Victoria and some state resident associations who hoped to achieve the appointment of an ombudsman in each state.

It is likely that submissions will be made to the Royal commission drawing in retirement villages combined with home care delivery but this will be a side issue.

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Reporting Results

Aveo existing village resales down 44% over 12 months – 346 units behind​

Nobody would be happy with this result. It means that they are $30 million down in revenue compared to the previous year. That is nearly $600,000 every week that Aveo did not receive.

More importantly, it is 346 families who were or are waiting for the sale of the family unit, supporting one of the criticisms of the Four Corners/Fairfax program.

Of course, that program is the cause of the 346 families waiting!

And this is only Aveo. Many operators are suffering the same slow sales, meaning there are concerned families across the country. Is this your experience?

Pressure is now on all sales people (and village managers) to sell this build-up of stock. Families want the end of fees being charged, they want their money and operators want to avoid compulsory buybacks.

Effective marketing is more important than ever.

Here at villages.com.au, our customer search traffic continues to build – it’s now over 1.2 million village searches a year. Starting 1 September, we launch a 12-month radio campaign across major talkback and sports stations (including 2GB, 3AW, 4BC, 5AA and 6PM plus regional sessions) to drive potential customers to the retirement village proposition and villages.com.au.

Does your village have a promotional listings on villages.com.au to capture this enquiry?

If you have any thoughts on marketing retirement villages we would love to hear from you by return email or call on (02) 9555 9576.