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

8,553 thoughts on “Meeting space rental industry in Korea”

  3. Can I say what relief to find someone who really knows what theyre discussing on the net. You definitely have learned to bring a difficulty to light making it important. The diet should look at this and understand why side on the story. I cant believe youre less common simply because you definitely possess the gift. Pondok Pesantren di Banten

  4. Oh my goodness! an amazing article dude. Thank you Nevertheless My business is experiencing trouble with ur rss . Do not know why Struggling to sign up for it. Possibly there is any person getting identical rss problem? Anyone who knows kindly respond. Thnkx ROMA99

  9. I really enjoy simply reading all of your weblogs. Simply wanted to inform you that you have people like me who appreciate your work. Definitely a great post. Hats off to you! The information that you have provided is very helpful. آیس بت

  11. thank, I thoroughly enjoyed reading your article. I really appreciate your wonderful knowledge and the time you put into educating the rest of us. predictz

  12. As far as me being a member here, I wasn’t aware that I was a member for any days, actually. When the article was published I received a username and password, so that I could participate in Comments, That would explain me stumbuling upon this post. But we’re certainly all members in the world of ideas. keyslim drops reviews

  14. Howdy! I know this is kinda off topic nevertheless I’d figured I’d ask. Would you be interested in trading links or maybe guest authoring a blog article or vice-versa? My website covers a lot of the same topics as yours and I feel we could greatly benefit from each other. If you happen to be interested feel free to shoot me an e-mail. I look forward to hearing from you! Great blog by the way! encanador

  16. Great to see the updating of the guidance and solutions by them! No doubt this is one of the best sites for everyone! They are really perfect in their work! Suggested to all!

  17. Great to see the updating of the guidance and solutions by them! No doubt this is one of the best sites for everyone! They are really perfect in their work! Suggested to all! Messipoker login

  22. gu 899 การเล่นสล็อตออนไลน์ในปัจจุบันกลายเป็นหนึ่งในกิจกรรมยอดนิยมสำหรับผู้ที่ชื่นชอบความบันเทิงและการเสี่ยงโชค และเมื่อพูดถึงแพลตฟอร์มที่น่าเชื่อถือและมีความสนุก GU899 หรือที่รู้จักในชื่อ GU 899, จียู899, และ สล็อตgu899 นับว่าเป็นหนึ่งในตัวเลือกที่ไม่ควรมองข้าม

  23. จียู899 GU899 ก่อตั้งขึ้นด้วยเป้าหมายที่จะเป็นศูนย์รวมความบันเทิงทางออนไลน์ที่ให้บริการเกมสล็อตที่มีคุณภาพและหลากหลาย ด้วยประสบการณ์ในวงการเกมออนไลน์มาอย่างยาวนาน GU899 ได้สร้างความไว้วางใจให้กับผู้เล่นทั่วประเทศและกลายเป็นหนึ่งในแพลตฟอร์มยอดนิยมอย่างรวดเร็ว

  24. I was just browsing through the internet looking for some information and came across your blog. I am impressed by the information that you have on this blog. It shows how well you understand this subject. Bookmarked this page, will come back for more. passages malibu logo

  26. The following is the perfect posting I actually found as a consequence of promote them. It’s really just what exactly Needed to check out anticipation around long run you are going to continue on to get spreading this sort of great posting. situs toto

  28. Perfectly, i need to assert that crafting talents possibly not which terrible, having said that i’ll you could increase ones own authoring proficiency. Working with not as much text to talk about the actual. You could check out bing designed for penning proficiency teaching web page and plans. entrepreneurs’ hub

  30. เว็บพนันออนไลน์ สล็อต บาคาร่าเว็บตรง Asia999 เราคือ เว็บตรง
    เว็บพนันออนไลน์ ที่ได้มาตรฐาน มาพร้อมเกมที่ครบครัน ไม่ว่าจะเป็น คาสิโนออนไลน์ บาคาร่า ไฮโล รูเล็ต ไพ่เสือมังกร สล็อตออนไลน์ เว็บตรงอันดับ1 ที่มาแรงที่สุดในตอนนี้ เดิมพัน บาคาร่าเว็บตรงไม่ผ่านเอเย่นต์

  32. When I originally commented I clicked the -Notify me when new comments are added- checkbox and today when a comment is added I purchase four emails with the same comment. Possibly there is that is you’ll be able to get rid of me from that service? Thanks! 生誕祭

  33. Can I say that of a relief to uncover somebody that actually knows what theyre preaching about on the web. You actually realize how to bring a concern to light and make it crucial. Workout . should check this out and see why side in the story. I cant believe youre not more well-liked as you definitely develop the gift. Cowgirl Costume

  34. Youre so cool! I dont suppose Ive read anything similar to this prior to. So nice to find somebody with some original ideas on this subject. realy appreciation for starting this up. this fabulous website is one area that is needed on-line, somebody if we do originality. useful project for bringing interesting things to your world wide web! DHT BLOCKER FUNCIONA

  35. Welcome to Hightex® Dynamic Sdn Bhd, your trusted partner in top-notch roller shutters solutions. As an established leader in the industry, we take pride in installing high-quality roller shutters, SKB roller shutter and providing exceptional price to repair and servicing services in KL, Malaysia. Roller shutter manufacturers

  39. Just acquired your blog post yesterday morning we have already been reading keep in mind this persistently. You will get a lot of helpful tips the following and i absolutely love your thing for this web presence at the same time. Carry on favorable occupation! situs toto

  40. Hello! I recently wish to give you a large thumbs up for the wonderful information you’ve got here within this post. I am coming back to your site to get more soon. situs online

  42. Wow, cool post. I’d like to write like this too – taking time and real hard work to make a great article… but I put things off too much and never seem to get started. Thanks though. Ajaib88

  43. I’m not sure if I agree with all of this. However, your article is very informative, and lots of people will walk away from this post feeling more educated than when they arrived. Overall, you have done a great job. Tote Charms

  44. เปิดประสบการณ์ใหม่กับ Luna999: เกมเดิมพันที่ดีที่สุด

    สัมผัสความสนุกและตื่นเต้นกับ Luna999 ที่ให้คุณได้มากกว่าความบันเทิง ด้วยเกมคาสิโนที่หลากหลายและโบนัสมากมายที่รอคุณอยู่ สมัครง่าย เล่นง่าย ได้เงินจริง ไม่ว่าคุณจะเป็นมือใหม่หรือเซียนเกม Luna999 ยินดีต้อนรับทุกคน มาร่วมสนุกและลุ้นรางวัลใหญ่ได้แล้ววันนี้! luna999

  45. Wow!! Spectacular results from them!! I am never contacting anyone else! The most amazing time period I have ever had! And their service is remarkable! alexistogel

  46. Dieser Ausdruck bezieht sich wahrscheinlich auf eine Kollektion oder Marke von Sexpuppen namens „mypuppen“. Es ist wichtig, dass Marken transparente Informationen über die Materialien und Sicherheitsstandards ihrer Produkte bereitstellen. Teen Sexpuppen mypuppen

  47. สัมผัสประสบการณ์เล่นเกมออนไลน์ที่ดีที่สุดกับเว็บตรง ไม่ผ่านเอเย่นต์ ปลอดภัย มั่นคง จ่ายจริงทุกยอด! สมัครง่าย เล่นได้ทุกที่ทุกเวลา พร้อมโปรโมชั่นพิเศษและโบนัสมากมายที่จะทำให้คุณตื่นเต้นทุกครั้งที่เข้ามาเล่นกับเรา! เว็บตรง

  48. เว็บยอดนิยมในตอนนี้ funny888 เป็นเว็บไซต์ที่ให้บริการครบวงจรทั้งการเดิมพันเกมกีฬาต่างๆ funny888 ที่พร้อมให้บริการหลากหลาย ซึ่งสามารถเลือกเดิมพันออนไลน์โดยการ สมัครเว็บแทงบอลที่มีความมั่นคงทางการเงินและให้ราคาบอลค่าน้ำดีกว่าเว็บอื่นๆในตอนนี้เว็บแทงบอลออนไลน์.

  49. I differ with most people here; I found this blog publish My partner and i couldn’t stop right up until We finished, even even though it wasn’t just what I used to be searching for, was still a pleasant examine though. I will instantly get a blog feed to remain in feel of any improvements. How to Shotgun a Beer

  50. You really make it seem really easy along with your presentation however I discover this matter to be really one thing that I believe I’d never understand. It seems too complicated and very broad for me. I am looking ahead on your next publish, I will try to get the grasp of it! cheap windows keys

Leave a Reply

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