Trying to increase occupancy for many providers has been a game of two steps forward and then one step backwards. This is usually because of the flu season in the winter months. The hope is always that the recovery will exceed the decline, year after year. The pandemic obviously through a wrench in that one.
For Canada-based Chartwell Retirement Residences, the largest operator in Canada with nearly 200 communities in four provinces, the step forward after the winter months will be quite a big one, according to their forecasts. The good news is that their step backwards was much smaller this year than in 2022.
Back in 2022, the company lost 130 basis points of census from December 2021 to April 2022, then gained 110 basis points of that back from April to August. But occupancy kept on rising from August to the end of the year, rising by another 110 basis points to 79.1%.
The winter doldrums hit again, but they were much more muted. From December 2022 to April 2023, occupancy dropped by just 40 basis points to 78.7%. Building on that small decline, from April to June, census jumped by 120 basis points to 79.9%, and they are forecasting another 90- basis point increase for the last two months of summer, expecting to reach 80.8% in August. That is definitely doable given the May to June increase was higher at 120 basis points.
However, the company still has a long way to go to get back to the 91% occupancy level it reached in the third quarter of 2018. Consequently, we suspect it will take several more years of solid increases, with larger steps forward and smaller steps backward.
