by

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

9,320 thoughts on “Meeting space rental industry in Korea”

  1. obviously like your web-site but you have to check the spelling on quite a few of your posts. A number of them are rife with spelling problems and I find it very bothersome to tell the truth nevertheless I’ll surely come back again. e nickname

  3. Pretty section of content. I just stumbled upon your website and in accession capital to assert that I get actually enjoyed account your blog posts. Anyway I will be subscribing to your feeds and even I achievement you access consistently quickly. book donations near me within 5 mi

  4. Wholesale Gucci Shoes Saved! Found yourself on google and i’m glad Used to do. Great site you will need to get a pile of traffic here’ desire to own a blog like this. must win team today

  6. Discover the pickles near me ! Enjoy a variety of tangy, spicy, and sweet pickles made from fresh, locally sourced ingredients. Perfect for snacking or adding a zesty touch to your meals. Find the top-rated pickle spots in your area and savor the flavors today!

  14. It is perfect time to make some plans for the future and it is time to be happy. I’ve read this post and if I could I wish to suggest you few interesting things or tips. Maybe you could write next articles referring to this article. I want to read even more things about it! مجله هسته

  16. whoah this blog is fantastic i love reading your articles. Keep up the good work! You know, many people are searching around for this info, you could help them greatly. 半田市歯医者

  18. Wow that was odd. I just wrote an incredibly long comment but after I clicked submit my comment didn’t appear. Grrrr… well I’m not writing all that over again. Regardless, just wanted to say fantastic blog! harta138 link alternatif

  21. Just saying thanks will not just be sufficient, for the fantasti c lucidity in your writing. I will instantly grab your rss feed to stay informed of any updates. usaupmagazine

  22. Mengapa Memilih Home4D?
    Home4D menonjol di pasar game online karena komitmennya untuk menyediakan pengalaman bermain yang superior. Dengan berbagai pilihan permainan, promosi menggiurkan, dan langkah-langkah keamanan yang kuat, Home4D memenuhi kebutuhan baik pemain casual maupun penggemar serius.
    home4d.id

  31. Asialive88 adalah pelopor permainan digital untuk para kalangan slotter mania di indonesia menawarkan game terupdate dengan berbagai provider terbaik. asialive88

  33. I simply wanted to say thanks once again. I am not sure the things I would’ve made to happen in the absence of the pointers discussed by you over such area. Entirely was an absolute scary concern in my position, but being able to view the well-written avenue you solved that forced me to jump for fulfillment. Now i am grateful for your assistance and as well , hope you are aware of a great job you happen to be accomplishing instructing people today using your websites. I am certain you have never encountered any of us. onbola

  35. This site is actually a walk-through its the internet you desired about it and didn’t know who to ask. Glimpse here, and you’ll absolutely discover it. live sgp

  36. Many thanks for creating the effort to talk about this, I feel strongly about this and love learning a great deal more on this subject. If feasible, as you gain knowledge, would you mind updating your website with a great deal more information? It’s extremely beneficial for me. JOS189

  40. Glock Switch For Sale. The Full Auto Glock Switch offers firearm enthusiasts an exciting opportunity to enhance the firepower and versatility of their Glock pistols. Available through the Texas Gun Store, glock 18 for sale

  44. Generate stunning AI product photography with ease using our AI photo shoot technology. Transform your marketing visuals with high-quality, professional AI product photos tailored to showcase your products in the best light. Perfect for e-commerce, advertising, and brand promotion. ai product photography

  46. Hello, Neat post. There is a problem with your site in web explorer, might check this… IE nonetheless is the marketplace leader and a big component to other people will omit your wonderful writing due to this problem. 速記独学おすすめ

  47. Hmm it looks like your website ate my first comment (it was extremely long) so I guess I’ll just sum it up what I submitted and say, I’m thoroughly enjoying your blog. I too am an aspiring blog writer but I’m still new to the whole thing. Do you have any recommendations for inexperienced blog writers? I’d really appreciate it. mpomega login

  48. I think this is one of the most vital info for me. And i am glad reading your article. But should remark on some general things, The web site style is perfect, the articles is really great : D. Good job, cheers mpomega login

  49. The growth of the meeting space rental industry in Korea, especially near colleges and office districts, highlights the increasing demand for flexible, private meeting spaces. Companies like TOZ are capitalizing on this by halloween squish offering a variety of room sizes to accommodate different needs.

  50. The following time I read a weblog, I hope that it doesnt disappoint me as a lot as this one. I mean, I know it was my option to learn, but I actually thought youd have one thing fascinating to say. All I hear is a bunch of whining about something that you would repair when you werent too busy in search of attention. Neolife vitaminai

Leave a Reply

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