This year, a trend that has gained unanticipated momentum is coworking spaces allocating more of their square footage to private offices, and less to desks. This is mainly because private offices are more profitable, generating a more stable revenue stream for the operator.
Thanks to the swelling demand from larger corporations, coworking configurations that heavily rely on private offices have proven to be a successful recipe for operators across the globe, including Industrious, ServCorp, and Knotel, to name a few.
For Some, Affording Space Presents a Challenge
Many spaces have found it difficult to fill their open desks mainly because the target demographic has a higher turnover rate overall, in terms of membership duration. Why does this happen? Because many professionals who are self-employed (including freelancers, small business owners, and gig workers) often find it hard to pay between $200 and $400 a month for a hot desk when they can opt for a free alternative, like working from home.
Moreover, many of the customers who rent desks for longer terms are often remote employees for companies that subsidize their coworking memberships. When compared to small business teams, remote employees can choose whether they want to adopt coworking as part of their work-week routines. While some remote employees have been slower to adopt shared workspace, others are finding boosted productivity to be a major advantage of joining a coworking space.
Our study found that 61 percent of coworking members preferred to work in a quiet, private area rather than an open, shared workspace. This suggests that small, one-to-two person private offices are more appealing to these individuals, but with prices easily surpassing $1,000 per month in capital cities, these customers are pushed further out of range.
Are Business Travelers the Answer?
Still, to meet the enduring global demand, coworking spaces continue to accelerate their plans for expansion. Market influencers such as CBRE believe flexible workspace will grow from 1% of office space (where it is today) to 10% in “just a few years.” But coworking spaces — especially independent ones — still share the same challenges in filling seats, securing new members, and finding ways to compete with the deep pockets of established coworking brands.
This presents a conundrum for the coworking industry at large. In a world where private offices are the greatest source of revenue, how can spaces attract more workers to fill the other empty seats?
One demographic that can prove a lucrative target for coworking spaces is business travelers. As remote work becomes more common, more people are traveling for business (and to generate business) than ever before. In the U.S. alone, an eye-popping 462 million domestic business trips were taken last year. Globally? Business travel is predicted to reach $1.6 trillion by 2020.
In one of our own studies about today’s coworking industry, Coworker found that 18 percent of users are business travelers looking for workspace for two days or less. Many business travelers need a day two on either side of meetings to prepare, and require a professional workspace where they can be productive.
In Terms of Convenience, Day Passes Are Just Not Enough
To date, the principal reason why these business travelers don’t seek out a coworking space has been an issue of cost and accessibility. Accessing a mere day pass can be complicated — and even burdensome — to both the customer and the space. For one, pricing presents an issue. With the average cost of a day pass at $22 globally (equalling $660 a month), most people question the value and instead defer to working from their hotel room, lobby, or a nearby cafe for the day.
Moreover, the actual booking process for a day of coworking is currently a fragmented and inconsistent experience. Reservations and check-in for coworking spaces today are similar to hotels 20 years ago. Online booking options are few and far between, and most people simply wouldn’t drop into a coworking space with hopes to purchase a pass for just one day.
Even for a one-day pass, a customer is often required to fill out paperwork, listen to a membership sales pitch, and sometimes even put down a cash deposit. When all a business traveler wants to do is walk in, connect to Wi-Fi, and get to work, all of this extra nonsense is, adversely, very inconvenient.
Coworking Memberships: A Solution for Business Travelers?
To address this gap in the market, Coworker is launching their new Global Pass, which will help send the new wave of business professionals into coworking spaces as they travel. Essentially, this coworking membership offers frictionless access to spaces in 105 countries and 440 cities, reducing the average daily cost for users by 45%.
With Global Pass, a user can easily check in to any space on the network with their Coworker mobile app, sit down, and get straight to work. The public launch is set for January 1, 2020, and large coworking companies such as The Hive, WitWork, and Selina have already signed on some of their locations as introductory partners.
Our vision at Coworker has always been to accelerate the adoption of coworking by people around the world. When people can access inspiring, collaborative workspaces and share ideas, good things happen. We believe Global Pass is the product and technological innovation needed to welcome the next generation of coworkers in 2020.