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Understanding The State Of Coworking In Latin America: Challenges And Opportunities

by Cecilia Amador de San José
March 18, 2019
in Business
Reading Time: 3 mins read
A A
Articles

Highlights from day two of the COLATAM coworking conference in Mexico.

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  • Highlights from day two of the COLATAM coworking conference in Mexico, including insights from panel discussions.
  • Experts discussed the challenges and opportunities facing the industry, including design and how to drive innovation.
  • A major challenge is balancing profit with community. To successfully achieve this, operators must also consider location, space layout, and design.

The first Latin American Coworking Summit took place last week in Mexico City, Mexico. The event gathered industry leaders and operators from Mexico, Brazil, Colombia, Chile, Ecuador, and Spain, among others.

The first day of the event focused on industry trends in the region, including strong demand and continued growth of coworking, particularly in Mexico. You can read Allwork.Space’s top takeaways from the first day of the event here.

During the second day, the event hosted several panel sessions that focused on the challenges and opportunities of the industry, design, and how coworking spaces can drive innovation. International Workplace Group (IWG) and PM Steele also took the stage with keynote presentations on the evolution and transformation of the workplace.




Understanding the LATAM Flexible Workspace Market

During the panel session “Challenges and Opportunities in Workspaces”, Juan Pedro Beguerisse from KROW, Gerardo Nava from Nodus Business Center, Mario Romero from Impact Hub, and Guillermo Argüelles from Frontin 5.0 discussed what’s moving the industry.

The answer is the market. The fact that coworking and flexible spaces have taken off in Mexico is because the market needed a physical space where they could come together. “The space doesn’t create the need; the space is born out of a need,” Romero stated.

The panelists also discussed identifying a target market and pivoting when needed. Financially speaking, it’s easier to redefine the target market than to redefine a business model. Your space offering should be tailored and targeted based on the demand; it’s a constant pivot. The important thing is to have a clear and solid business model.

Speaking about business models, the panelists agreed that operators should not prioritize community over space or vice versa. A coworking space’s profitability is crucial, and space location and distribution plays a key role in this; however, the essence of coworking is community and it should be a priority. Otherwise, profitability might be compromised. Yet, focusing exclusively on community doesn’t make for a profitable business model. Operators need to balance both aspects of the operation; they need to have a space that is conducive to a dynamic community. To achieve this, operators need to think about location, space layout, and design.

Challenges

One issue that has affected the industry in Latin America is that people think it’s easy to create and open a coworking space. There have been countless new spaces that open and close within three months. They appear just as fast as they disappear.

Those interested in the industry need to understand that a coworking space goes beyond offering a desk, a chair, and WiFi. A successful coworking space is one that is full of life and activity.

Then there’s also the fact that the region’s market still compares coworking and flexible workspaces with the traditional real estate model. Even though the real estate industry has evolved in Latin America, people still compare flexible workspaces with traditional office real estate solutions.

Opportunities

Large companies in Latin America are interested in coworking. However, and similar to what’s happening in the US and Europe, companies want to have the option to brand the space as their own. Operators in Latin America interested in attracting enterprise clients need to think about ways in which these companies can personalize and brand the workspace.

Existing and upcoming operators need to think about space and resource optimization. The idea is to run a successful and efficient operation; this requires operators to optimize water and energy consumption, as well as space distribution. They also need to think about automation — which tasks can be automated and what technologies they can use to increase efficiency and revenue.

Speaking about revenue, the panelists urged operators to carefully determine their pricing strategy. They argued that reducing prices to attract new members won’t work long-term, especially if the operators are not building owners. Doing so will reduce an operator’s margin significantly, which can eventually lead to a coworking space’s undoing.

The panel ended with a closing statement: today’s market is focused on experiences. Operators should focus on perfecting their workspace experience before they even think about growing or expanding into different markets.

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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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