Why Do Daycares Use Waitlists Instead of Raising Prices to Meet The Demand?
I've been looking into the pricing of daycares here in Seattle and one thing was surprising to me - for some reason all daycares have huge waitlists, with some parents reporting they've spent up to three years trying to get a spot. There are also "waitlist fees" if you want to get on the waitlist in the first place.
Now, the fact that there aren't enough daycares in major metropolitan areas is well known and this doesn't surprise me. But why would daycares choose to use long waitlists instead of just raising the prices until supply meets the demand? I mean, other service providers generally don't force you to wait in line for years and just vary the pricing based on the number of customers. So I was hoping that Daycare members could resolve my question and explain the reasoning behind such policies. Is it to ensure that no spots are ever vacant? Is it to avoid a backlash from angry parents? Is it to help out struggling parents who would be priced out otherwise? |
My waitlist is about 3 years, now. I charge what I need to earn to meet my financial obligations, keep an emergency fund and life insurance, take a couple of vacations per year and fund my IRA. It has nothing to do with whom is on the list. I also have no desire to earn more, more money = more problems in my experience. :lol: I love my life as it is.
My tuition rate is fixed, increases yearly (just like my clients' wages) and reflects inflation in my region. I am not sure what you mean by "vary the pricing based on the number of customers". It has nothing to do with the number of customers, that is a fixed number, too, set by my regulations. I did not choose it and feel it is low for my ability. |
With my daycare I was finding that most of my kids were starting to leave at 3 1/2 yrs old. How can you have a 3 year waitlist, wouldn't they be aged out by then? Or are they parents that are not yet pregnant?
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Originally Posted by lovemykidstoo: I also keep them until age 6. Redshirting is common here. |
Originally Posted by Cat Herder: |
Originally Posted by lovemykidstoo: I am also the only star rated family provider in town right now. |
Originally Posted by Cat Herder: |
Originally Posted by Myst_Seattle: It why they don't increase prices to hire more staff so they can enroll more kids? |
Apologies for not being clear enough. If there's a daycare like Cat Herder's where the waitlist is at 3 years, it should in theory be possible to keep increasing the price every year until the waitlist is at 6 months or less as more and more parents are being priced out of the daycare. But in practice daycares don't seem to do it or at least the ones in Seattle don't.
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Originally Posted by Unregistered: Why wouldn't those customers just choose a nanny service then? It seems to be the likely outcome of price gauging. |
Originally Posted by Unregistered: Daycare is a huge cost already for working parents so raising rates isn't going to be a benefit for anyone. Those with bigger wallets have more options but regardless my issue is that I am limited to x number of spaces and despite the fact that my wait list is also pretty lengthy, raising my rates isn't going to change the maximum capacity the state allows me to have. |
Originally Posted by Unregistered: |
Originally Posted by Blackcat31: |
Originally Posted by Ariana: I charge a higher rate than most in my area and I also have the longest wait list so where is the correlation? |
Originally Posted by Blackcat31: I charge pretty much the same as I did when I opened 10 years ago because there are so many providers charging bottom barrel prices for such a highly sought after service. They have the idea that cheaper will attract more clients. |
I will say though that the market might end up levelling itself out. As childcare becomes more lucrative more people will get into it and since you don’t need any real education or skills to do it (at least where I am) there is no deterrent to pursuing it, thus increasing supply and bringing down prices.
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Originally Posted by Ariana: Raising my rates simply because the demand is there isn't the answer. People can't afford to pay more than a certain amount. No matter what the supply and demand is. S/D doesn't always apply to the child care business. Theory is great but reality is more important. |
Originally Posted by Ariana: I disagree with this theory. There are tons of unlicensed legal and illegal offering services in my state for rock bottom prices, but this doesn't change what I charge nor how I run my business regarding anything else. I am full with a waiting list and run my program like a business. I am open less hours than most but still remain full. I charge 52 weeks per year but still remain full. I do what works for me to support my own family. As for education, I do have an AS degree, but business sense doesn't always come from a college. Life lessons with hard knocks along with a special mentor taught me alot! :) |
Originally Posted by Blackcat31: I had a mom interview and tell me my rates were too high for their budget. I said ok and sent them on their way. A week later she contacted me....they magically found the money. Why? Because the supply of quality care is low. |
Originally Posted by Ariana: |
The truth? Most of the providers here are legally unlicensed and don't have more than CDAs. They also don't want to do school prep. Who is going to pay high prices for that?
Many are also rude to parents and want (usually low paying) parents they can term left and right when they feel like pulling a hissy fit. |
Originally Posted by lovemykidstoo: |
Originally Posted by Ariana: |
Originally Posted by hwichlaz: |
Originally Posted by Annalee: |
Originally Posted by Ariana: |
Originally Posted by Unregistered: A degree does not make you better than anyone else. Paper isn't worth whatever is printed on it IF it isn't in conjunction with hands on experience and quality. SMH at some of the offensive statements I've read lately. |
Originally Posted by Blackcat31: Wait, wrong job site... :lol: Wait, no that seems about right. :ouch: If only parroting what the professor says for a solid A would just equate to hands-on skills and business management ability, gosh golly. :rolleyes: |
Originally Posted by Unregistered: My clients chose me because I speak more than one language & I did teach my daycare babes. I had a very multi-cultural childcare home for many years (I closed last year), so don't state something you don't know for a fact. I worked in the Legal field for 15 years before teaching & childcare |
Originally Posted by Blackcat31: It would price out some parents out of the daycare market, but at the same time it would help parents who have recently moved into the neighborhood and haven't had a chance to sign up for the waitlist three years ago. That's an issue faced by many of my parent colleagues who are new to Seattle. |
Originally Posted by Blackcat31: |
Originally Posted by Blackcat31: |
Originally Posted by LysesKids: |
Originally Posted by Myst_Seattle: The biggest issue in my area and the reason there is such a long waitlist is there are so many parents that want part time, sporadic care and want to pay only for the hours or days they use. That doesn't work well for a child care provider trying to earn an income themselves and while staying within ratios. My waitlist has actually grown more as I've charged more. Go figure. lol! I can't explain that logic so I don't even try. :) Originally Posted by Myst_Seattle: For me, it's about who FITS whatever opening I currently have. Does that make sense? So in reality a new family moving into the neighborhood and just signing on to the wait list might only wait 2 months for care verses someone on the list that has been waiting 3 yrs. Best fit trumps first on the list. Hopefully that makes more sense. |
Originally Posted by Unregistered: Originally Posted by Unregistered: ...and I am pretty sure that at the end of it all, the only thing listed on ones head stone is their date of birth and date of death. The rest isn't important. Especially if you truly believe a degree makes you better than anyone else. I have zero interest in running in circles around someone who simply types the words "I have a degree" and thinks they are worthy of a decent conversation. :rolleyes: Have a great night! |
Originally Posted by Unregistered: |
Originally Posted by Blackcat31: |
Originally Posted by Blackcat31: |
Originally Posted by Josiegirl: |
Originally Posted by Blackcat31: |
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