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

8,281 thoughts on “Meeting space rental industry in Korea”

  6. فروش آنتی ویروس های مطرح دنیا ✔️ | خرید لایسنس نود 32 – خرید لایسنس Eset ✔️ | تحویل آنی -پشتیبانی 7/24 گارانتی بازگشت وجه – خرید نود 32 – آخرین ورژن
    لایسنس نود 32

  10. This may be a really good hints mainly that will the ones novices at blogosphere, shorter together with complete information… Kudos meant for posting ours. Extremely important look over report. dewatogel

  13. Exclusive material, thank you to the writer. It is actually incomprehensible in my opinion at present, however in common, the usefulness and importance is mind-boggling. With thanks and all the best… digital marketing anderson sc

  14. Leading China CNC machine manufacturer offering high-quality precision machines for various industries. Browse our range now for cutting-edge solutions. Dekcel

  15. Thank you so much for such a well-written article. It’s full of insightful information. Your point of view is the best among many without fail.For certain, It is one of the best blogs in my opinion. bizop

  16. LOYAL provides industrial microwave drying, sterilizing, thawing and curing machines for different purposes. Our creative method caters for all your production necessities with efficiency and success. Find out more on our microwave dryer today! Loyal

  17. A baby soft toy is a cuddly and comforting companion for a newborn. These toys come in various shapes and sizes, often in the form of cute animals or characters, and are designed to provide comfort and entertainment to the baby as they grow.
    insblog.co.uk

  18. Need a hig-hquality Snus Packing Machine? Visit the China-based company Loyal/Snus Packing Machine. Their well-crafted equipment ensures that snus will be produced efficiently and long-lastingly. If you want state-of-the-art technology and creative solutions for your snus packing needs, look no further than Loyal/. Call us today for better results when packing your snus! https://loyal-machine.com/snus-packing-machine/

  19. I really appreciate your blog. It’s truly wonderful and insightful. This post really resonated with me independent Lucknow escorts. I appreciate how you tackle complex topics with such clarity. Looking forward to your next article thanks for sharing with us.

  23. If only my personal articles looked like this particular! That’s a enhance, btw?-I ‘m a new comer to blog posting as well as reading through various blog posts helps me personally by helping cover their my very own. Any kind of data you could throw my method to assistance is really valued. Just good info on this particular publish! weed in Nicosia

  24. Stores at Cuppage Plaza offer a diverse array of shopping and dining experiences, catering to a wide range of tastes and preferences. Renowned for its authentic Japanese eateries, the plaza boasts numerous sushi bars, ramen shops, and izakayas, each providing a genuine taste of Japan
    https://cuppageplaza.org/

  27. Absolutely, a terrific effort! Seeing such well-reasoned and eloquent ideas written down is encouraging. In addition to being pleasant, the writing was superb. Please see SEO Agency for further information and experienced support.

  28. Unquestionably a tremendous effort! Seeing such well-reasoned and articulate ideas written out is inspiring. In addition to being delightful, the writing was exquisite. Please visit SEO Agency for more information and expert assistance.

  32. It’s really a cool and useful piece of info. I’m glad that you shared this useful info with us. Please keep us informed like this. Thanks for sharing. lashes calgary

  35. Selamat datang di JAYASPIN agen judi terbaik dan berlisensi resmi di Indonesia hanya dengan Deposit 10ribu. Agen Slot yang telah memiliki lisensi PAGCOR (Philippine Amusement and Gaambling Corporation) yang bertanggung jawab atas kesenangan ribuan lebih penjudi di Indonesia dalam melaksanakan taruhan online yang aman dan nyaman.

  36. JAYASPIN adalah situs hiburan online yang di lengkapi dengan berbagai jenis permainan dari berbagai jenis provider.
    JAYASPIN juga memiliki permainan dengan dukungan grafik yang sangat bagus dan tentunya sangat sedap sekali untuk dimainkan seperti diantaranya. permainan ketangkasan, permainan navigasi, permainan logika dan juga beberapa permainan mengasikan lainnya.

  37. Jayaspin adalah situs permainan taruhan olahraga hingga kasino terkemuka dan terpercaya di Asia, Jayaspin Slot menawarkan pengalaman judi online terbaik dengan berbagai variasi permainan kasino & sportsbook yang dapat dipilih dengan odds paling kompetitif dalam dunia judi sepak bola.

  38. Jayaspin adalah situs permainan taruhan olahraga hingga kasino terkemuka dan terpercaya di Asia, Jayaspin Slot menawarkan pengalaman judi online terbaik dengan berbagai variasi permainan kasino & sportsbook yang dapat dipilih dengan odds paling kompetitif dalam dunia judi sepak bola..

  40. Awesome blog. I enjoyed reading your articles. This is truly a great read for me. I have bookmarked it and I am looking forward to reading new articles. Keep up the good work! buy provisional license

  41. Hmm is anyone else having problems with the pictures on this blog loading? I’m trying to find out if its a problem on my end or if it’s the blog. Any feed-back would be greatly appreciated. Blast bridge l2

  46. I like the helpful information you provide in your articles. I will bookmark your blog and check again here regularly. I am quite sure I’ll learn a lot of new stuff right here! Best of luck for the next! فروش فولاد

  47. Hi there! I know this is kinda off topic but I was wondering which blog platform are you using for this website? I’m getting sick and tired of WordPress because I’ve had issues with hackers and I’m looking at alternatives for another platform. I would be awesome if you could point me in the direction of a good platform.

  49. Can I just say what a relief to seek out somebody who truly knows what theyre speaking about on the internet. You undoubtedly know how one can convey an issue to mild and make it important. More folks have to read this and perceive this aspect of the story. I cant believe youre no more well-liked since you definitely have the gift. thc weed bestellen

Leave a Reply

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