Not that long ago, the airline industry focused on seat occupancy and sold all seats in a class for the same price. Until Virgin Blue took the view that different people valued airline seats differently. The emergency traveller would pay a premium as would a convenience traveller whereas a flexible traveller would set a different value. More recently they have even created new classes (premium economy) to further differentiate the value of seats.

Airlines now use this new flexibility to structure their pricing to achieve a desired occupancy rate and more importantly to achieve targeted revenue passenger kilometres. This allows them to reach a benchmark average income per revenue passenger kilometre.

Aged care facilities are similar to aeroplanes. You can’t change the basic structure however, you can reconfigure the beds and look at opportunities to differentiate the value to different residents in order to maximise the yield you can achieve from your beds (BAR - Bed Accommodation Revenue). This applies equally for the not-for-profit and the for-profit sectors as both are in the not-for-loss sector.