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Why Meeting Rooms are Your Most Profitable Asset

by Cecilia Amador de San José
August 2, 2016
in Business
Reading Time: 4 mins read
A A
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*Article written in collaboration with Jerome Chang

A couple of weeks ago, we published an article on how workspace design can have a direct effect on revenue.

Interior design is about much more than the looks and aesthetics of a physical space. In many ways, design helps with the flow, the energy, and the success of any given room or area. But because these are intangible and subjective factors, their huge impact upon a workspace are often not as quantifiably valued as they should.

It’s time for workspace operators to change their approach to design. They need to start thinking about tangible factors like proper dimensions, appropriate materials, and efficient layouts in order to accurately quantify the success and profitability of their workspace.

Jerome Chang, architect and founder of BLANKSPACES, has found that when it comes to flexible workspace design, the most profitable type of space is meeting rooms. To clarify, the profit derives from:

  • Most $/hr of revenue
  • Most underutilized asset because it often sits more vacant than occupied.
  • Most discrete usage in terms of start and end times. Think about it: you ‘rent’ out an office to therefore earn revenue 24/7 on that single room, but you only sell a few hrs/day of the meeting room, let alone anything between 5pm-9am.

To better understand meeting room profitability and how workspace operators can take better advantage of their available space, we spoke with Martin Senn from Davinci Virtual Offices.

When Davinci launched six years ago, Martin and the rest of his team observed that meeting room space was being underutilized by workspace operators. “For the most part, operators rented meeting rooms space at no cost to tenants. This means that the space was highly underused and that operators weren’t making any profit from it.”

Currently, Martin claims that meeting room occupancy for Davinci clients averages between 40%-60%. A significant amount, considering experts suggest that when meeting room occupancy reaches a 70%- 80% average, workspace operators should consider building another meeting room in their space, as they are more likely to generate more revenue this way than by renting out office space.

So much indeed, that Martin highlights how 20% of flexible workspace revenue comes from meeting rooms and virtual office addresses.

Seems like a pretty  simple formula, right? If you open meeting room space to external clients you will drive more revenue.

Well, yes and no.

Just as there are different types of offices and desks, there are different types of meeting rooms; they vary by size and purpose. Here’s a breakdown of meeting room type and capacity:

 [column-third-1]
Type
Boardroom
Day Office 
Large conference Room 
Medium Conference Room
Small Conference Room
Training Room 
 [/column-third-1] [column-third-2]
Capacity
13-15 people
2-3 people
Up to 12 people
Up to 8 people
Up to 6 people
35-40 people
 [/column-third-2][column-third-3]
Booking Rate
5%
25%
19%
19%
27%
4%
 [/column-third-3]

*Data provided by Davinci Virtual Offices

When you add this variation to the formula, things can become a bit complicated (but not too complicated, so don’t stop reading yet.)

Taking into account the different types of meeting rooms available, workspace operators need to understand who are those that are renting out meeting space and which type of space they are renting out. Davinci provided us with some interesting data and statistics.

Davinci has divided meeting room users into three main segments: retail companies, corporate users, and deposition and legal companies. Each of these clients have different behaviors when it comes to booking and using the space.

“Generally speaking,” Martin says, “Retail meeting room traffic is usually booked within 36 hours of when the space will be used. These companies have an immediate need for space and they usually don’t require larger rooms.”

Corporations and legal companies are different, Martin explains. “They tend to plan further ahead and typically book for larger groups of  people.”

Which means that you could easily be renting out your meeting space on short or medium-term notice. The trick, in the end, is to not leave your meeting room space empty for long periods of time. The need for meeting space is there, it’s up to you to decide how to best take advantage of this need in order to drive more revenue to your workspace.

The numbers don’t lie, the space is there, now go get some clients.

Ease of use 1password
Tags: Design
Cecilia Amador de San José

Cecilia Amador de San José

Cecilia Amador de San José, Senior Associate Editor of Allwork.Space, is based from wherever her laptop is. She enjoys traveling and visiting new flexible workspaces. If you'd like Ceci to check out your workspace, feel free to reach out to her at [email protected] (and send a plane ticket).

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