Aging baby boomers and restrained construction of new facilities will drive demand
Los Angeles, CA (PRWEB) October 26, 2012
The Retirement Communities industry is anticipated to exhibit accelerated growth in the next two decades. An aging population and growing need for dementia care (for people with memory impairment) are stimulating much of the industry's growth. Retirement communities provide a number of services for seniors who suffer from chronic illnesses to assist them with activities of daily living. “Over the past five years, the number of assisted living facilities that provide dementia care has risen as a proportion of total facilities,” says IBISWorld industry analyst Anna Son. “On the other hand, companies that do not include these services have suffered by the changes in the housing market and economy.” While the industry exhibits some resistance to the recession, a poor housing market hampers individuals' ability to move into a community. As a result, the housing market's downturn over the past five years has mitigated industry revenue growth. During this period, IBISWorld estimates that industry revenue will average annual growth of 2.8% to $51.3 billion in the five years to 2012, including a projected 3.3% increase in 2012.
Retirement Communities industry profitability has been pressured slightly since 2007, mainly due to costs associated with regulation compliance. Although the recession restrained new construction, “the industry has benefited from a cutback in the supply of facilities,” Son says, “which increased occupancy levels in existing facilities. As a result, higher occupancy rates were able to buoy the industry's profit margins, offsetting the declines in demand from those affected by the recession.”
During the five years to 2017, an improving economic environment, an aging population, healthcare reform legislation and new service offerings will facilitate industry growth. In addition, technological advances and new architectural designs will play a crucial role in industry growth as demand for innovative amenities strengthens. As the housing market improves, more seniors will be able to sell their homes and pay resident fees. However, the unstable commercial construction market will keep the supply of retirement and assisted-living facilities low, despite expected increased finances for this market. As a result, mergers and acquisitions are expected to become more common, with the number of industry companies projected to decrease in the five years to 2017. Many of the acquisitions made during the coming years will likely remain with distressed properties, and high-end properties are unlikely to be sold. Major company Brookdale Senior Living Inc. is focused on taking advantage of the fragmented industry and plans to continue acquiring through selectively purchasing assets of existing operating companies of individual communities. For more information, visit IBISWorld’s Retirement Communities in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes companies that primarily provide residential and personal care services for the elderly and other individuals who are unable to fully care for themselves or who desire to live in a community facility. The industry excludes companies that predominantly provide inpatient nursing, skilled nursing or rehabilitative services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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