Caleb Parker is an American entrepreneur and CEO of MeetingRooms.com. Prior to joining MeetingRooms.com, Caleb spent 12 years in the hospitality industry and nearly 7 years in serviced office space, including time with Regus, Executive Space Solutions and Touchdown Space, a company he co-founded to automate meeting room inventory distribution. He is one of the first licensed commercial real estate agents to speak on the subject of on-demand workspace. Connect with him on twitter @caleb_parker.
As we get into 2014, we know that meeting rooms will continue to be a large part of any conversation revolving around business center revenue generation. Many centers are already heavily marketing their meeting room spaces, some using models already developed by the hospitality industry, others identifying new and creative ways of promoting meeting space, keeping within their own branding schemes.
Either way, owners and operators need to understand that promotions and advertisements are one thing; creating a seamless process that is agile and scaleable is another altogether, and necessary to success. We asked Caleb Parker, CEO of MeetingRooms.com, to help us sort through the issues confronting business center and coworking space owners when it comes to putting together the kind of plan that is necessary to get bookings and keep spaces full. Below are Caleb’s thoughts. As always, we welcome yours as well.
According to Sue Saldibar, Managing Editor of Officing Today, meeting rooms are part of a multi- billion dollar industry. Yet, in our industry, the average meeting room is empty more than 50% of the time. I’ve spoken to numerous operators who admit to less than 30% occupancy rates on their meeting rooms. One thing is certain, serviced office operators are not capturing enough share of the meeting room market.
So how big can meeting rooms be for the serviced office industry?
We know there are three major trends coming together to create an increased demand for meeting rooms:
- Widespread adoption of mobile technology;
- The rise in entrepreneurship;
- The fiscal need for established businesses to reduce their real estate footprints by implementing agile workspace strategies.
The workforce is becoming more virtual and mobile and office footprints are shrinking. But the need for physical space isn’t being eliminated; it’s simply shifting to as-needed. People will continue to have in-person meetings, they just won’t have their own dedicated meeting room. These three trends opens up a huge pipeline of business for serviced office space operators.
Is your business center positioned to scale your meeting room business? Are you maintaining outdated systems?
Maybe the better question for us to ask is: “How can we, as an industry, prepare to scale meeting room bookings?”
So let’s have a conversation about how to scale meeting room bookings. I’ve been researching this topic for a while now. Over the last couple of years I’ve talked to a lot of people in our industry. I’ve asked a lot of questions. I’ve written blog posts, participated on panel discussions and spoken at industry conferences and events about this topic. For our industry to scale meeting room bookings we must make automation of inventory a priority. This must become an industry-wide initiative. It worked for the hotel industry and it will work for us.
The ingredients are here.
There are smart people at innovative companies working to tackle this problem, but we need a coordinated effort and industry buy-in. We must work together to enable automation, which will create the ability to scale the number of meeting room bookings. And it’s imperative that we structure distribution costs to enable maximum consumption of meeting rooms.
Two Sides of a Transaction
In our industry there are two sides to a transaction: consuming the service and providing the service:
Consuming the Service
It goes without saying that the end user is the consumer of the service, but to consume the service, they initially ‘partner’ with the channel for the transaction of booking a meeting room. The channel could be third parties like LiquidSpace, Davinci, MeetingRooms.com, CloudVO, etc., or it could be the operator’s own website.
Providing the Service
Obviously the operator provides the service to the end user, but they typically ‘partner’ with an inventory management software provider to manage the booking internally and distribute the inventory to various channels.
Automating the Service
Some software providers, such as RJ Metis and MorningStar, have already developed the ability for the operator to automate the distribution of their inventory to various channels in real-time. Some have plans to, and others have not even considered it. In order to have industry-wide automation operators will need to find ways to automate the distribution of their inventory to multiple channels.
Operators who maintain outdated systems will not scale meeting room bookings.
Some operators maintain outdated systems. They do not offer online bookings, they prefer to speak to each customer prior to confirming a reservation, or they only want customers to book directly. Imagine if you had to speak to a hotel employee before booking a room. How many hotels would you have to call before making a reservation? That’s so 1980s.
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Now as far as wanting customers to book directly, I completely get this. It’s much better to keep 100% of the revenue than to not. We agree on that. But unless you’re Regus and have a multi-gazillion dollar marketing budget, it’s highly unlikely that your marketing will reach every single potential customer. There are entire market segments that may never hear of your company. If your meeting room sits empty any part of the day, why wouldn’t you want to pay a small amount for a new customer to do business with you? Even Regus does this.
Structuring Distribution Costs
Traditionally in business a supplier or manufacturer of a product sells their goods through various channels. The channel either earns a commission or purchases the product and resells it with a margin. Then, as the product is shipped to the customer a shipping company like FEDEX earns revenue on their shipping fees.
In the travel industry hotels sell their rooms to customers through thousands of channels. They license software, like Micros, to manage their internal inventory, and pay companies like Pegasus to automate the distribution of their inventory to numerous channels. The channel earns a commission or purchases hotel rooms and resells them with a margin. Then, as hotel room bookings are made, Pegasus earns a small distribution fee from the hotel on each transaction.
In our industry, we’re at the early stages of building the distribution infrastructure. There are a lot of questions about how to structure distribution costs. If we get this right, all parties involved stand to win. If we get this wrong, we will continue to miss out on our share of the meeting room market.
What we should do
I believe the best way to enable scale is to follow the hotel example presented above. Software providers should give their operator customers the ability to distribute their inventory to as many channels as possible, and earn a small distribution fee on each transaction.
There are 4 primary benefits to this model:
- Operators are able to expose their inventory to as many distribution channels as possible, creating opportunities for scale.
- Removes any conflict between the software provider and distribution channels.
- Allows the operator and channel partner to negotiate their own terms directly.
- Enables the software provider to benefit from transaction growth.
By automating the distribution of inventory through numerous channels we enable the scaling of meeting room bookings. Operators and channels should make the most money on a transaction because they acquire and service the customer. Their relationship should be negotiated directly. But we must not discount the role software providers play in distribution. They should benefit from transaction growth. If we scale to 100 million transactions (or more) and the software providers earn $1 or £1 pound per transaction, they stand to benefit greatly.
Let’s scale meeting room bookings
I realize some may not agree with me. Some operators are already doing good meeting room business. For some changing the system may not be appealing. But if we don’t successfully automate the distribution of meeting room inventory our industry will not scale meeting room bookings.
I’ll end this post with a quote that I feel is relevant to this topic:
“A rising tide lifts all ships”
Thanks to meetingrooms.com for the imageShare this article