Meeting space rental industry in Korea

Industry Overview

In Korea, the meeting space rental industy near Colleges and office districts has been growing fast. Students want to gather and study together while office workers want to develop themselves through seminars and lectures after works. However, there weren’t enough informal meeting spaces near universities and office areas. Unlike US, in Korea 3-4 colleges are clustered near one subway station, and office buildings are located near subway stations as well. Due to the geographical factor, there has been growing demands for meeting spaces. Some cafes in Korea have meeting space in separate rooms, but it can only accommodate one or two group. The biggest success factor of meeting space rental business is in private space for various party sizes.

I chose a successful meeting space rental company named ‘TOZ’ (http://www.toz.co.kr/index.asp)which has been in this industry for about ten years. In 2010, 3 million people used TOZ and the number of users is growing by 30%. I tried to find any article or webpage in English, but unfortunately, I couldn’t find any one. The following video clip will give you a glance of how the business model works even though it has a lot of Korean subtitles.

http://www.youtube.com/watch?v=8330CSX6gLs

The company defines ‘space’ by rentable rooms and ‘time’ by hours. If a room type is small to mid size, the rental fees are charged by person hour. If a room falls into a large category, the rental fees are fixed for two hours. But basically, the fixed fees are deriving from the occupancy.

Space

Division of Space

The meeting space is divided by the number of people the room can accommodate. The smallest room can only accommdate one person whereas the largest one can accommodate up to 60 people. The size of rooms are not explicitly shown, so the space is implicitly defined. However, since the number of people each room can accommodate heavily depends on the size of the room, the configuration of space should be planned ahead in the development period. Considering the redesign of floor plan is costly, the initial assessment of demand will hugely impact the utilization of space.

Single occupancy room

A room for eight

 

A room for sixty

Ancillary revenues

TOZ rent out laptops and projectors to meeting organizers. They charge $1.5/hr for a laptop and $2.5/hr for a projector. Customers can have free drinks for sodas and teas, but they have to pay for snacks and fruit juices. TOZ also charges for Copy machine and Fax machine. TOZ created a online community for people who want to share information about certain topics such as arts, books, computers, games, and cookings. When there is a enough demand to have a offline meetings, they organize meetings making them rent their meeting rooms. With organizing offline meeting from online demands, TOZ has been able to generate more revenue.

Different ways to split up

Since the current design of rooms can hold up to a certain capacity, it is really difficult to maximize the occupancy per SQFT. The following picture is the example of a floorplan:

Floorplan

Sometimes TOZ maximizes the utilization of space with table mix. Some rooms are designed like a interview room.

Interview room

And some rooms are designed for students who want to study alone.

self-study room

More flexible configuration – If TOZ can use sound-proof sliding wall and move walls between rooms to accommodate as many as they can at a certain time, they can generate more revenue. For example, TOZ could have more larger rooms in the morning for office workers, and have more smaller rooms after dinner for group study rooms.

Sound proof wall

 

 

Time

TOZ has explicit pricing for the hourly rate. Basically TOZ is charging flat rate for hour or 30 minutes. For example, on a weekday, the price for each person is $5 for the first two hours, and $1.25 for extra 30 minutes. Basically, TOZ charges flat rate of $1.25 per 30 minutes per person for weekdays and $1 per 30 minutes per person for weekends and students.

There should be more sophisticated pricing structure depending on arrival. Since the reservation works in ‘First come, fist served’ way, there is not much room for Revenue Management. But if the company charges different rates for different time of the day, they can capture more surplus from people with high willingness to pay. For example, if 7-9pm is the most crowded time of the day, TOZ should charge more for the period to generate more revenues as well as move price sensitive customers to less crowded time.

Price

There are two kinds of pricing structures: variable pricing and fixed pricing. In small room categories, TOZ charges $1 to $1.25 per 30 minutes per person whereas in the large room categoreis, it charges fixed rate per 2hrs per room. However, per person rate for large room categories($2.083/hr) is almost the same as the one with small room category if the room is fully occupied.

The company provides rate simulator to help meeting organizers estimate their budget. If a meeting organizer input date, time, number of people, and needs for device rental, and student ID, the total fees and per person rate will be automatically calculated. Following picture is the rate simulator:

Rate simulator

The followings are the types of rate fences:

(Physical rate fences)

  • Student discounts rate(20%)
  • Minimum number of people for large room categories

(Non-physical rate fences)

  • Membership points
  • Complimentary snacks for 9+ hours usage
CREATIVE RATE FENCES
Charging higher rates walk-in customers – From the revenue management’s point of view, forecasting demand plays an important role, and reservations is the most efficient tool for minimizing uncertainties. TOZ should encourage members to make reservations in advance. And walk-in customers are people willing to pay more than regular prices. Instead of giving away inventories for the same rate, TOZ should charge more for walk-in groups.
Meeting over breakfast/lunch packages – Nowadays busy office workers are reluctant to allow separate time for meetings since it is a big commitment for busy people. So, providing a cozy meeting spaces with simple food (Toast, Cereal, Sandwiches) in lunch or dinner time will bring office workers who want to save their time during office hours. Not only the company can utilize the idle time, but they can also generate F&B revenue without any incremental facilities.
Jeehoon Kim

3,401 thoughts on “Meeting space rental industry in Korea

  1. Bonanza138 Jika pada umumnya player deposit dengan pulsa akan dikenakan potongan jika deposit dengna pulsa. Bonanza 138 memang berbeda dan memberikan pelayanan yang lebih untuk player yakni tanpa potongan sama sekali dan juga tidak ada pengecualian pada provider tertentu, semua tanpa potongan. Dengan kemudahan dan pelayanan lebih ini kami juga memberikan tambahan promosi khusus untuk player dengan memberikan promo event yang diberikan diawal. Jumlah koin yang diterima oleh player lebih besar dari nominal deposit sebesar 10%.

  2. DewaPoker Merupakan Agen Judi Poker Online Terbaik No.1 Indonesia, Situs Dewa Poker Minimal Deposit Rp10.000, Daftar Dewa Poker Asia Online Terpercaya dewa poker

  3. CCleaner Pro Crack download is a full commercial version of a traditional PC cleaning and maintenance tool. CCleaner Crack Code package contains all the cleaning functions you are already familiar with. Then, with a click or two, the program clears your hard drive and log, searches your site history, software, and system crashes, and removes what you no longer need ccleaner pro crack.

  4. Meet the best website online gambling with everything you want with the web Lottojc เว็บพนันบอลที่ดีที่สุดต้องเว็บเราบอกเลยว่า รวยจริงแน่นอน
    เว็บแทงบอล

  5. I am heartily thankful to you that you have shared this essential information with us. I got some different kind of knowledge from your web page, and it is very helpful for everyone. Thanks for share it. mahindra tractor price

  6. มีครบทุกวงจรให้เลือกเล่นเกมต่างๆและยังทันสมัยสล็อตเป็นเว็บที่มาแรงและแลิดภัยในเรื่องชองการเล่นเกม

  7. แทงบอลUFABET เว็บพนันออนไลน์ เว็บแทงบอลออนไลน์และคาสิโนที่ดีที่สุด ราคาบอลดีที่สุด รับค่าคอมมิชชั่นสูงสุด0.7% พร้อมให้บริก 24 ช.ม. @222U แทงบอลufabetเว็บตรง

  8. Kendriya Vidyalaya (KVS) Going to conduct 11th class Annual Examination 2022, Download KVS 11th, 12th class Model Paper 2022 at Official Website Only, Kendriya Vidyalayas are a System of Central Government Schools in India that were instituted under the aegis of the Ministry of Human Resource Development KVS 11th Model Paper Kendriya Vidyalaya Sangathan Conducts Class – XII Annual Exams in the All the schools are affiliated to the Central Board of Secondary Education (CBSE). KVS Class – XII Examination are held in Month of April Annually Regular Students Participate in the Exams every year.

  9. clicksud is the ultimate entertainment platform for online series and online movies. Digital entertainment around the world is covered by and we are heading to one of the best online platforms in the world. understands the needs of the public and offers exactly what the visitors have, which makes them unique to us. I hope you will return to us so that we can continue like this.

  10. บุหรี่ไฟฟ้า น้ำยาบุหรี่ไฟฟ้า Pod System ราคาถูก E-cigarette ดีที่สุด
    จำหน่าย บุหรี่ไฟฟ้า นำ้ยาบุหรี่ไฟฟ้า ราคาถูก ขายบุหรี่ไฟฟ้า อุปกรณ์บุหรี่ไฟฟ้า Pod System E cig ของแท้ ปลอดภัย จัดส่งทั่วไทย PostVapours
    บุหรี่ไฟฟ้า

  11. Wonderful goods from you, man. I have understand your stuff previous to and you’re just extremely great.I actually like what you’ve acquired here, certainly like what you are stating and the way in which you say it. You make it entertaining and you still care for to keep it wise.I can’t wait to read far more from you. This is actually a terrific website giàn trồng rau

  12. บุหรี่ไฟฟ้า น้ำยาบุหรี่ไฟฟ้า Pod System ราคาถูก E-cigarette ดีที่สุด
    จำหน่าย บุหรี่ไฟฟ้า นำ้ยาบุหรี่ไฟฟ้า ราคาถูก ขายบุหรี่ไฟฟ้า อุปกรณ์บุหรี่ไฟฟ้า Pod System E cig ของแท้ ปลอดภัย จัดส่งทั่วไทย PostVapours
    บุหรี่ไฟฟ้า

Leave a Reply

Your email address will not be published. Required fields are marked *