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

7,939 thoughts on “Meeting space rental industry in Korea”

  2. I have been exploring for a little bit for any high-quality articles or weblog posts on this kind of house . Exploring in Yahoo I finally stumbled upon this web site. Reading this info So i’m satisfied to express that I’ve an incredibly good uncanny feeling I came upon just what I needed. 스포츠무료중계

  3. Someone essentially assist to make critically articles I’d state. That is the first time I frequented your web page and to this point? I surprised with the analysis you made to create this actual submit amazing. Magnificent process! Panen138

  7. An impressive share, I merely with all this onto a colleague who had been carrying out a little analysis during this. And the man the fact is bought me breakfast because I discovered it for him.. smile. Ford Mustang

  9. When I firstly commented I clicked the “Notify me when new comments are added” checkbox and after this every time a comments is newly added I recieve four e-mail with only one statement. Could there be by any means you may remove me from that service plan? Many thanks! toto12 daftar

  13. Lots of people were enthusiastic players or enjoyed music and dancing. You may recall that you were most joyful on the performing track. Nonetheless, with increasing accountabilities you may have found almost no time to have pleasure in any of your interests. Are you affected by depression and want to get out of its abysmal depths without lifelong antidepresants? You could attempt and feel free to overcome depression the natural way. Sayap123

  14. Hey, just looking around some blogs, seems a pretty nice platform you are using and the theme as well. I’m currently using WordPress for a few of my sites but looking to change one of them over to a platform similar to yours as a trial run. Anything in particular you would recommend about it? m ulartoto

  17. I discovered your website web site on bing and check a number of your early posts. Keep up the great operate. I just additional increase RSS feed to my MSN News Reader. Looking for toward reading a lot more from you down the road!… Babu88 Login

  20. Hey. Neat article. There is a problem with your web site in chrome, and you may want to check this… The browser is the marketplace leader and a big part of folks will pass over your wonderful writing because of this problem. sports betting Africa

  24. Thanks for all of the labor on this site. My mother take interest in conducting research and it’s simple to grasp why. Many of us hear all regarding the lively mode you deliver great items on the website and as well as attract participation from others on the matter then my princess is in fact becoming educated a lot. Take advantage of the rest of the new year. You have been carrying out a remarkable job. تابلو استیل

  26. Thank you for the sensible critique. Me & my neighbor were just preparing to do some research on this. We grabbed a book from our local library but I think I learned better from this post. I am very glad to see such fantastic info being shared freely out there. Facebook

  28. Hello. Cool article. There is an issue with your web site in internet explorer, and you might want to check this… The browser is the marketplace chief and a big section of people will omit your great writing because of this problem. soil testing in denton

  31. Can I say what relief to uncover one who really knows what theyre discussing on the net. You certainly learn how to bring an issue to light and make it crucial. Workout . ought to read this and appreciate this side of your story. I cant believe youre no more well-known because you definitely possess the gift. SLOT ONLINE TERBERSAR

  34. A powerful share, I simply given this onto a colleague who was doing slightly analysis on this. And he in actual fact purchased me breakfast as a result of I found it for him.. smile. judi tembak ikan

  35. A powerful share, I simply given this onto a colleague who was doing slightly analysis on this. And he in actual fact purchased me breakfast as a result of I found it for him.. smile. So let me reword that: Thnx for the treat! But yeah Thnkx for spending the time to debate this, I really feel strongly about it and love studying more on this topic. If doable, as you turn into expertise, would you mind updating your blog with extra particulars? It is highly useful for me. Massive thumb up for this weblog post! judi tembak ikan

  39. tired from the day I had…..Abbi’s team won their tournament game so we finished UNDEFEATED!!! But it was a rough game and I had to get a little redneck, but we won. Then dress shopping with the girls! Ashley looked beautiful and got a great dress! n. togel online

  40. tired from the day I had…..Abbi’s team won their tournament game so we finished UNDEFEATED!!! But it was a rough game and I had to get a little redneck, but we won. Then dress shopping with the girls! Ashley looked beautiful and got a great dress! n. <aIt seems you are getting quite a lof of unwanted comments. Maybe you should look into a solution for that. Hmm… judi slot online href=”https://babybuh.com/”>togel online

  42. Once again, light color tones make the room looks bigger and brighter. We suggest you pick colors like tans, light grays and light blues for the flooring of a smaller bathroom. By applying these light colors, together with the colors on the walls, your bathroom will appear bigger and roomier. A word to you: keep the light color flooring clean. situs judi online terpercaya

  43. I would like to thnkx for the efforts you have put in writing this site. I’m hoping the same high-grade site post from you in the upcoming as well. In fact your creative writing abilities has inspired me to get my own site now. Really the blogging is spreading its wings fast. Your write up is a great example of it. rentacarkosovo strategi slot terbaik

  44. I would like to thnkx for the efforts you have put in writing this site. I’m hoping the same high-grade site post from you in the upcoming as well. In fact your creative writing abilities has inspired me to get my own site now. Really the blogging is spreading its wings fast. Your write up is a great example of it. rentacarkosovo strategi slot terbaik

  48. Comfortabl y, the post is really the sweetest on that notable topic. I suit in with your conclusions and also definitely will eagerly look forward to your upcoming updates. Simply just saying thanks can not simply just be enough, for the phenomenal lucidity in your writing. I will directly grab your rss feed to stay abreast of any updates. De lightful work and much success in your business endeavors! Photovoltaik Reinigung

  49. This is a right weblog for anybody who would like to find out about this topic. You are aware of so much its nearly not easy to argue along with you (not that I personally would want…HaHa). You actually put the latest spin on a topic thats been discussed for years. Excellent stuff, just great! gras bestellen online

Leave a Reply

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