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

8,851 thoughts on “Meeting space rental industry in Korea”

  1. I’ve always found that balancing academic work with personal responsibilities can be a real challenge. Recently, I decided to seek professional help to ensure my assignments were completed on time and to a high standard. I used services from http://www.nursingpaper.com, which offered expert support with nursing essays, research papers, and even case studies. Their assistance was incredibly valuable, providing me with well-written, thoroughly researched content. With their help, I was able to focus on other important tasks while ensuring my academic performance stayed strong.

  2. Critical thinking plays a vital role in navigating today’s complex world. It enables us to evaluate information, question assumptions, and make informed decisions. Developing this skill requires both practice and access to reliable resources. Engaging with diverse perspectives can significantly enhance our ability to think analytically and respond effectively to challenges.

  4. Playing video games online at run 3 is one of the ways that we get to show off our muscles to all of our new friends that we have made all across the world. It is possible to become addicted to it, and I believe that parents have a lot of responsibility in making sure that things go more smoothly in this regard.

  5. Pretty nice post. I just stumbled upon your blog and wanted to say that I have really
    enjoyed surfing around your blog posts. After
    all I will be subscribing to your rss feed and I hope you write
    again very soon!

    Also visit my blog magic mushroom chocolate uk

  7. The platform’s interface is user-friendly, making it easy to navigate for beginners and experienced players alike. The mobile-friendly design allows players to enjoy games on the go. Bj88

  10. Advanced Revenue Management offers expert solutions to optimize pricing strategies and improve financial performance for businesses. It’s a valuable resource for companies looking to maximize their revenue through data-driven insights and advanced analytics Traffic Lawyer Clarke VA

  12. USA Builders’ Depot is on a mission to revolutionize the construction industry by providing builders with superior materials at unbeatable prices. We understand the challenges builders face, and our goal is to simplify your sourcing process while ensuring top-notch quality. outdoor wall panels

  17. Can I just say what a reduction to find someone who truly is aware of what theyre talking about on the internet. You definitely know tips on how to convey a problem to light and make it important. More individuals have to read this and perceive this side of the story. I cant consider youre not more common because you positively have the gift. Chapter 16 of the Bhagavad Gita

  18. We’re a group of volunteers and starting a new scheme in our community.
    Your website offered us with valuable information to work on. You have performed a formidable task and our whole neighborhood shall be
    thankful to you.

    Feel free to surf to my blog … JOKERSLOTแตกง่าย

  19. I every time used to read post in news papers but now as
    I am a user of web therefore from now I am using net for content,
    thanks to web.

    Feel free to surf to my webpage; Main profile

  20. Discount put up, Regards for the purpose of showing This unique practical knowledge. Excellently crafted piece of writing, if perhaps virtually all web guru proposed an identical standard of articles and other content whenever you, the on-line world will be more effective destination. Why not keep writing! Canvas n’ Décor’s rolled canvas art prints

  24. it is really fine together with meanful. it is really amazing webpage. Back linking may be very important idea. you will have extremely improved lots of individuals what person see webpage and provides him or her usefull material. اسکن هسته ای

  26. Unquestionably believe that which you said. Sainikpuri Escorts at Rs 5000 Let your self feel Complete with Us
    favorite reason appeared to be on the internet the easiest thing to be aware of.
    I say to you, I certainly get irked while people think about
    worries that they plainly do not know about. You managed to
    hit the nail upon the top and defined out the whole thing without having side
    effect , people could take a signal. Will likely be back to get more.
    Thanks

  35. I have express a few of the articles on your website now, and I really like your style of blogging. I added it to my favorite’s blog site list and will be checking back soon… Fapelli

  36. After reading your article I was amazed. I know that you explain it very well. And I hope that other readers will also experience how I feel after reading your article. Fapelli

  38. The next time I read a blog, I hope that it doesnt disappoint me as much as this one. I mean, I know it was my choice to read, but I actually thought you have something interesting to say. All I hear is a bunch of whining about something that you could fix if you werent too busy looking for attention. Kongo Tech

  42. wow, great, I was wondering how to cure acne naturally. and found your site by google, learned a lot, now i’m a bit clear. I’ve bookmark your site and also add rss. keep us updated. 115-10-6

  44. 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! 127.0.0.1:49342

  47. “PPSC Past Papers” are previous exam papers from the Punjab Public Service Commission, used by candidates preparing for various competitive exams. These papers provide insights into the exam pattern, question types, and frequently covered topics. Reviewing them helps candidates improve their exam strategy, boost confidence, and better understand the format, ultimately aiding in effective preparation for PPSC exams.PSC Past Papers

  48. The next time I read a blog, I hope that it doesnt disappoint me as much as this one. I mean, I know it was my choice to read, but I actually thought you have something interesting to say. All I hear is a bunch of whining about something that you could fix if you werent too busy looking for attention. 5starsstocks .com

  50. Thank you for the auspicious writeup. It in fact was a amusement account it.
    Look advanced to far added agreeable from
    you! By the way, how could we communicate?

    Visit my web-site – slot online

Leave a Reply

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