A segmented and sophisticated retirement living market is ahead as innovators look to the hotel industry for inspiration, says New Zealand hotelier and retirement living entrepreneur Graham Wilkinson.
With interests in hotels and retirement living developments throughout New Zealand, Wilkinson has developed a retirement village model based on high levels of hospitality.
The president and longest-serving member of the Retirement Villages Association of New Zealand, Wilkinson purchased his first partially-developed village at Whangaparaoa, north of Auckland, in 1994.
Since then, he’s established Generus Living Group and built a portfolio that includes four large retirement living villages and several hotels. Over the next two years, Generus plans to double its footprint by building at two Auckland sites and one in Tauranga, as well as constructing Queenstown’s largest new hotel.
Wilkinson believes the retirement village market is “becoming more segmented and sophisticated” and can differentiate on brand and amenities in much the same way that hotels do.
“Everyone, especially the discerning customer, understands the difference between economy, midscale and upscale hotels, between a Holiday Inn and a Four Seasons,” Wilkinson says.
“Over time, the newly-retired baby boomers will gain an appreciation that retirement living is becoming like hotels – with more diverse, upscale and service-oriented product. And village companies will brand their product around service, amenity and cost.”
Luxury meets retirement living
Wilkinson points to his company’s analysis which concluded “the vast majority of the village market is trying to generate the highest margin with the least possible cost – the economy hotel model”.
“We saw an opening to create a more upscale product with more amenities and higher levels of service.”
Take Pacific Coast Village at Tauranga, nestled along the North Island’s Bay of Plenty. The 18-hectare site, now home to 350-plus residents, boasts an international-scale bowling green and a 25-metre indoor pool. There are two clubhouses: the Summerhouse with its intimate library and bowling pavilion; and the Beachhouse containing a café, bar and dining room, health and beauty treatment rooms, craft rooms, a boardroom, computer stations and a 50-seat cinema with tiered seating.
“We invested over NZ$15 million in community facilities, but we recouped that through higher sale prices,” Wilkinson explains.
“We engaged a manager with 30 years’ hotel experience including a strong F&B background, and we’ve been told that the local food society has adopted us because they consider our restaurant the best dining experience in town.”
An upscale approach means “you can engage more with the community because your restaurants aren’t positioned as the old fashioned dining rooms of yesteryear – and this allows you to derive additional revenue streams, which is needed because you won’t capture enough business from 300 units to make it pay”.
One of Generus’ secrets is to create a strong sense of arrival and ambience of a five-star hotel. Wilkinson compares his approach to that taken by hotels such as Four Seasons at the iconic George V hotel in Paris.
“Walk into the foyer of the George V and you’ll be smitten with the opulence – the floral arrangements, the marble floors, the heritage bar and so on. You are in love with the place on arrival, and immediately feel treated. The typical guest room itself is far more circumspect – but your views are already formed.”
He says standards are another area where retirement villages can look to hotels.
“Hotels have standardised training and operational programs to ensure the same level of experience is delivered time after time.
“We’re mindful that our product is about selling security – that has to come first and cannot be superseded. But how that is delivered can set a village apart. It’s not just about care, but about hospitality too.”
Pacific Coast Village has a “strong waiting list, so we’ve started building another sister village across the road” that will eventually be home to another 400 residents. The first residents are yet to move in, “but we have already presold 50 units, and we are getting up to NZ$200,000 more than the average price of our competition in the area”.
The secret to success
Wilkinson’s business model is built on partnerships which “allows us to reduce our risk and working capital – typically because the other party will own premium land that would be difficult or impossible for to acquire”.
His partners include charitable trusts and iwi, or traditional landowners, who are “land rich but management poor”. His team take responsibility for all development and operations creating an ongoing legacy for both partners.
Generus recently concluded a partnership with a “substantial” New Zealand charity, which will deliver the country’s first six-star village in Auckland’s most affluent suburb. Marketing is due to commence before the end of the year.
“The site has strong heritage links and we will deliver an extremely upscale retirement living offering – and the people attracted will be people who are used to staying at upscale hotels.”
But Wilkinson offers a word of caution.
“Our market research suggests there is a real demand for the best – but if you don’t do everything right in this segment, it will not succeed. These customers can afford the best and they want the best.”
Graham Wilkinson is headlining the National Retirement Living Summit, from 20-22 November on the Gold Coast. Early Bird discounts close 28 August 2019, so book your ticket today.