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

9,290 thoughts on “Meeting space rental industry in Korea”

  1. I would like to voice my gratitude for your kind-heartedness giving support to individuals that should have assistance with in this situation. Your real dedication to getting the solution along had become astonishingly helpful and has in most cases helped somebody much like me to get to their desired goals. Your new warm and friendly report signifies so much to me and additionally to my office workers. Thank you; from everyone of us. 1xirani.com

  2. This article is fantastic! It is exceptionally well-written and provides a thorough analysis that is both enlightening and engaging. The clarity and depth of the information presented are impressive. Kudos to the author for such an informative and captivating piece!
    KINGSLOT96

  3. Dominobet adalah platform permainan digital untuk para kalangan slotter mania di indonesia menawarkan game terupdate dengan berbagai provider terbaik. dominobet

  4. Excellent .. Amazing .. I’ll bookmark your blog and take the feeds also…I’m happy to find so many useful info here in the post, we need work out more techniques in this regard, thanks for sharing. OK Win login

  7. ROYAL123 ialah situs alternatif daftar akun slot PG Soft resmi terbesar di Indonesia 2024, yang menawarkan pilihan permainan terlengkap dengan fitur scatter hitam paling gacor hari ini. Link ROYAL123

  8. Certainly a terrific effort! It is encouraging to read such smart and well-presented opinions. It was both entertaining and well-written. SEO Services provides additional resources and professional assistance.

  11. Great – I should definitely say I’m impressed with your blog. I had no trouble navigating through all tabs as well as related information. The site ended up being truly simple to access. Excellent job… topbandar login

  15. Pretty section of content. I just stumbled upon your weblog and in accession capital to assert that I get actually enjoyed account your blog posts. Anyway I will be subscribing to your feeds and even I achievement you access consistently quickly. the growth matrix reviews

  16. When do you think this Real Estate market will go back right side up? Or is it still too early to tell? We are seeing a lot of housing foreclosures in Winter Springs Florida. What about you? Would love to get your feedback on this. growth matrix reviews

  26. Aw, this has been an extremely nice post. In thought I must place in writing similar to this moreover – taking time and actual effort to create a great article… but what / things I say… I procrastinate alot and also by no indicates appear to get something accomplished. 美容儀器價格

  29. Hiya! I just wish to give a huge thumbs up for the great data you’ve gotten here on this post. I shall be coming back to your weblog for more soon. EDITOTO

  30. At Paddco, we do more than just build homes. We create a lifestyle of luxury and comfort right here in Zanzibar. Our investment opportunities are your ticket to a world of refined living. Our projects are crafted with a modern touch, blending seamlessly with the vibrant local culture.
    Real Estate In Zanzibar

  31. I want to show my respect for your kind-heartedness for those people who actually need guidance on this particular concept. Your very own commitment to getting the message all through came to be pretty helpful and have usually enabled guys and women just like me to arrive at their objectives. Your entire helpful hints and tips can mean a great deal to me and a whole lot more to my mates. With thanks; from all of us. Bandar Togel

  32. Definitely stable, brilliant, fact-filled facts in this article. Ones threads Do not sadden, and this absolutely is true in this article likewise. People generally produce a motivating understand. Would you say to Now i am fascinated?: )#) Sustain the great articles or blog posts. streameast

  33. Youre so cool! I dont suppose Ive read something similar to this before. So nice to get somebody by incorporating authentic applying for grants this subject. realy appreciation for starting this up. this website are some things that’s needed over the internet, somebody after a little bit originality. helpful project for bringing something new to the web! Webengine

  34. I’ve usually believed personally one of the finest lovers associated with Mozart, as well as will achieve this until your day associated with my personal passing away. Buy a car

  38. I’m often to running a blog and i actually respect your content. The article has actually peaks my interest. I am going to bookmark your site and keep checking for new information. mostbet twitter

  40. Great site. A lot of helpful info here. I¡¯m sending it to some pals ans additionally sharing in delicious. And obviously, thank you on your sweat! HOKI805

  42. I merely seen your blog site the other day and i also are generally browsing doing it continually. There’s a a lot of tips suitable here so i fancy your thing of a rrnternet site far too. Preserve good occupation! Garden sheds

  43. One of the things I like about reading websites such as this, is that there isn’t any spelling or even lexical errors! Causes it to be tough about the reader occasionally. Very good work upon that and also the topic of this website. Many thanks! vps

  44. EXOTOTO situs slot online gacor dan mudah dalam memberikan maxwin kepada membernya yang mana hanya butuh 5rb sudah bisa maxwin main slot situs exototo. exototo

  45. Hello there, just became alert to your blog through Google, and found that it is truly informative. I am gonna watch out for brussels. I’ll appreciate if you continue this in future. Lots of people will be benefited from your writing. Cheers! ug899 link alternatif

  46. I do not know if it’s just me or if perhaps everybody else experiencing problems with your website. It seems like some of the text in your posts are running off the screen. Can somebody else please comment and let me know if this is happening to them too? This may be a problem with my web browser because I’ve had this happen previously. Appreciate it THC vape germany

  48. I wish I could write such articles, I can then increase traffic to your website. Please some tips on how to do it if it is a long phase process? sex dolls

  49. I really like your blog.. very nice colors & theme. Did you make this website yourself or did you hire someone to do it for you? Plz reply as I’m looking to design my own blog and would like to find out where u got this from. cheers alexistogel

Leave a Reply

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