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

7,077 thoughts on “Meeting space rental industry in Korea”

  1. Raden138 adalah situs judi slot online gacor hari ini dengan winrate link slot gacor tertinggi di Indonesia. Gabung dan segera rasakan sensasi kemenangan

  4. MGO777 adalah sebuah situs yang menyediakan permainan slot online terpercaya yang tentunya siap memberikan cara daftar dan bergabung untuk bisa lebih mudah … mgo777

  5. This is a very informative and useful post. I appreciate your time and effort in this. This post taught me a lot of new things. It’s wonderful to see such useful content available. This post provided useful information and advice. I’m glad this post brought the topic to light. This post was well-written and simple to comprehend. I’m excited to read more posts like this in the future. I’m confident that many readers will find this post useful. Thank you for sharing your expertise and knowledge. charlottesville bus accident lawyer

  10. Resources similar to the one a person pointed out here may well be very useful to me! I will set up a link to this web page on my small blog. I’m particular my personal site visitors will discover which really helpful. playbet788

  11. websites Our giant obtainable for download in a variety of The amount of big number of beautiful fantastic job capturing their nude bodies in a variety of We hope wigobet

  12. Hi, Neat post. There’s a problem with your site in internet explorer, would check this… IE still is the market leader and a good portion of people will miss your wonderful writing because of this problem. Standesversicherung

  13. I’ve been browsing on-line greater than three hours nowadays, yet I by no means discovered any attention-grabbing article like yours. It is beautiful price sufficient for me. In my view, if all webmasters and bloggers made just right content as you did, the web will be a lot more useful than ever before. kepo88

  14. hi!,I like your writing so much! share we communicate more about your post on AOL? I require a specialist on this area to solve my problem. May be that’s you! Looking forward to see you. passport covers

  15. Thanks for your article. I would like to comment that the very first thing you will need to do is check if you really need repairing credit. To do that you simply must get your hands on a copy of your credit rating. That should never be difficult, considering that the government necessitates that you are allowed to get one cost-free copy of your real credit report yearly. You just have to check with the right people. You can either look at website for that Federal Trade Commission and also contact one of the major credit agencies directly. taxi from liverpool airport

  18. Dönüşüm Yönetimi Merkezi; karlılığını arttırmak isteyen firmalar için dönüşüm yönetimi, maliyet azaltma, karlı büyüme danışmanlığı, İşleri istendiği gibi gitmeyen firmalar için acil yeniden yapılanma konularında yönetim danışmanlığı hizmetleri vermektedir. Yonetim Danışmanı ne iş yapar

  19. The particular Amish’s important faith centered idea of Demut “humility”, plainly demonstrates the particular weak spot related to individualism as well as sociable school therefore well-known concerning individuals civilizations and also there exists a matching sturdiness relating to Amish party id. เวทีสำเร็จรูป

  21. I am really enjoying the theme/design of your website. Do you ever run into any internet browser compatibility problems? A small number of my blog visitors have complained about my blog not working correctly in Explorer but looks great in Firefox. Do you have any recommendations to help fix this problem? heritiana antonio fatigue occulaire

  22. A person produced a few nice points presently there. Used to do searching on the matter and discovered practically just about all people goes along with along with your blog. sell house in corfu

  25. Superior Place, My organization is a great believer during ad opinions regarding online websites that will let the webpage novelists recognize that they’ve put in an item worthwhile that will the online market place! temanligaklik.live

  30. I really wanted to develop a small remark to say thanks to you for some of the amazing recommendations you are writing at this website. My considerable internet look up has at the end been recognized with brilliant suggestions to exchange with my guests. I would assert that we site visitors actually are quite lucky to exist in a wonderful community with so many outstanding people with very beneficial principles. I feel very much fortunate to have used your entire webpage and look forward to many more brilliant times reading here. Thanks once again for all the details. فروش اقساطی موبایل اپل

  33. My spouse and i ended up being really relieved that Emmanuel managed to complete his investigation because of the ideas he made from your very own weblog. It’s not at all simplistic to just find yourself giving out techniques which usually the rest have been making money from. BETTOR365

  34. This situation document appears to redeem a good deal of audience. Determine how to market it? The idea provides a amazing completely unique distort onto stuff. Reckon offering anything proper or alternatively great offer information about is central to the subject. toto togel

  35. I admire the dear knowledge you offer in your articles. I will bookmark your weblog and have my kids test up right here generally. I am reasonably positive they will learn numerous new stuff here than anyone else! https://139.180.216.185/

  36. Awesome site! You’ve some very worthwhile posts.. Nice background as well haha. Keep up the good work, Ill make sure to come across and see more of your page! ternatetoto

  37. I, on behalf of my friends in the school, wish to express all of our thanks for the truly wonderful secrets revealed by means of your article. The clear explanation brought comfort and hope to all of us and would probably really help us with a research we are currently doing. I think if still come across websites like yours, my own stay in college will be an easy one. Thank you totobet hk

  38. Hiya, I simply hopped over to your web page via StumbleUpon. No longer one thing I would normally learn, however I preferred your feelings none the less. Thanks for making one thing value reading. ligaplay88 daftar

  40. “I wanted to draft you a very little note so as to give many thanks the moment again considering the incredible tricks you have provided above. This is quite extremely open-handed of you to allow unreservedly precisely what numerous people could have offered for sale as an ebook in making some dough on their own, particularly now that you might well have done it in case you decided. These secrets in addition served to be the fantastic way to be aware that most people have similar desire the same as mine to find out more around this problem. I am certain there are lots of more enjoyable situations in the future for people who scan through your blog.” تعمیرات ماشین حساب در تهران

  41. I had been thankful to obtain a phone coming from my friend because he identified the important recommendations shared on the site. Dealing with your site write-up is a real great expertise. We appreciate you considering viewers much like me, and that i desire for you the best associated with good results like a specialist surface. خرید پسته

  42. I am often to blogging i actually appreciate your site content. The content has truly peaks my interest. I’m going to bookmark your web blog and maintain checking for brand spanking new info. buy telegram members

  43. Wow! This could be one of the most useful blogs we have ever come across on thesubject. Actually excellent info! I’m also an expert in this topic so I can understand your effort. Georgia Fake ID

  47. Genuinely I just read through it again yesteryear and yet We numerous head to fix it and today I wanted to study it again ever again considering that it is somewhat well written. bokep jepang

  50. After study several of the blogs with your website now, i truly much like your strategy for blogging. I bookmarked it to my bookmark web site list and will be checking back soon. Pls look at my internet site at the same time and make me aware if you agree. 일본야동

Leave a Reply

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