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

7,937 thoughts on “Meeting space rental industry in Korea

  1. “.بيت الصيانة هي شركة رائدة في صيانة المكيفات المنزلية وتعبئة الفريون لكافة الأنواع، يمكنكم معرفة المزيد حولصيانة مكيفات بمكة
    بالتواصل معنا لمعرفة الأسعار والتفاصيل”

  2. I am really enjoying reading your well written articles. It looks like you spend a lot of effort and time on your blog. I have bookmarked it and I am looking forward to reading new articles. Keep up the good work. Mufaddal Vohra

  3. Browsing through your blog site presents me the chance to realize precisely why I like examining points with so substantially understanding. It actually is wonderful to know there are still terrific authors all around that will set wit into knowledgable data. I appreciate you for your contributions and eagerness to share your thoughts with us. Elux Cyberover 15000

  4. Slot di situs slot18 dan permainan judi online lainnya, tentu membutuhkan sebuah situs untuk menjalankannya, agar permainan peluang dapat dikelola sesuai keinginan mereka. slot18

  5. Hi mate, .This was a great page for such a difficult subject to talk about. I look forward to seeing more excellent posts like these. Thanks Funny888

  6. I’m happy I located this blog! From time to time, students want to cognitive the keys of productive literary essays composing. Your first-class knowledge about this good post can become a proper basis for such people. nice one usatopicnews

  7. I’m happy I located this blog! From time to time, students want to cognitive the keys of productive literary essays composing. Your first-class knowledge about this good post can become a proper basis for such people. nice one upnewshub

  8. Wipperman ile İstanbul da özgürce hareket edin! Kaliteli ve uygun fiyatlı akülü tekerlekli sandalyelerimizle engelleri aşın ve hayatın tadını çıkarın.

    akülü sandalye

  9. 토툼 슬롯커뮤니티는 온라인슬롯을 즐기시는 회원님들을 위해 검증이 끝난 인기 슬롯사이트를 소개하고, 슬롯 게임을 이용하실 때 주의해야 할 부분과 핵심 가이드에 대해 상세하게 안내해 드리겠습니다. 슬롯사이트

  10. лінзи в фари – оптимальне рішення для тих, хто хоче покращити освітлення свого автомобіля. Наші продукти забезпечують потужне та рівномірне світло, що підвищує видимість та безпеку на дорозі. Ви можете знайти у нас бі лед линзы, лед лінзи, купити лед лінзи в фари або обрати led лінзи для свого авто. Наш каталог включає широкий вибір, від лінзи бі лед до bi-led модулів. Якщо ви шукаєте якісні лінзи в фари, ми пропонуємо найкращі варіанти.

  11. you have a great site here, i have trust follow your website and read all article you write here bro !
    im hope can ready more article you have in here
    Live chat

  12. Wow, wonderful blog layout! How long have you ever been blogging for? you made running a blog glance easy. The full look of your website is great, let alone the content! npctoto daftar

  13. Hello! I just now would like to offer a huge thumbs up for the wonderful info you might have here on this post. I am returning to your website for additional soon. Dune Buggy Dubai

  14. Prior to you decide to create your own checklist to include an idea associated with what camping checklist ought to. Really … A listing can be more than what you need. Desert safari Dubai

  15. I am pleased, I have to state. Really not often will i come across your blog which is every educative as well as enjoyable, and let me tell you, you have got strike the actual toenail about the head. The idea will be exceptional; the difficulty is something that doesn’t sufficient folks are speaking wisely about. I am extremely comfortable which i stumbled all through this kind of in my search for a very important factor relating to this. Dune buggy Dubai

  16. I have been exploring for a little bit for any high quality articles or blog posts in this sort of house . Exploring in Yahoo I at last stumbled upon this website. Reading this info So i am satisfied to show that I’ve a very just right uncanny feeling I found out exactly what I needed. I such a lot for sure will make sure to don’t disregard this site and provides it a look on a constant. buy dihydrocodeine

  17. A lot of thanks for every one of your effort on this web page. My aunt takes pleasure in doing investigation and it’s easy to see why. All of us learn all concerning the lively form you offer priceless guides through this web blog and as well as inspire response from others about this content and our favorite princess is becoming educated so much. Enjoy the remaining portion of the new year. Your carrying out a very good job. Pitbull Near me for sale

  18. I simply desired to make a quick comment in order to express gratitude for your requirements for people wonderful pointers you are posting at this site. Time consuming internet investigation has towards the end for the day been rewarded with high-quality strategies to present to my guests. I would claim that many of us readers are really endowed to happen in an incredible network with biggest reason so many marvellous those with useful hints. Personally i think quite privileged to have used your webpages and check toward really more fabulous minutes reading here. Thank you for many things. Pitbull Near me for sale

Leave a Reply

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