At the Global Workspace Association (GWA) Conference in Atlanta on September 19, 2013, our CEO Laurent Dhollande discussed his perspectives on what Workplace Providers can do to maximize revenue. The following elaborates on the part of the discussion that focused on the concept of Economic Occupancy. It is a partial transcript of Laurent’s discussion.
Office Business Centers have been hit hard during the great recession. The GWA Annual Financial Surveys show that on average center occupancy has decreased from 85% in 2007 down to 79.1% at the bottom of the recession, but was back almost to pre-Great Recession levels in 2012. As occupancy went down, the pricing power of full-time offices decreased as well, creating a double whammy for operators, as operators had to provide aggressive incentives, such as free rent and discounts to entice clients. Along with the economic recovery of the last few years in the U.S., business center operators have been able to increase revenue in the last three years, but not back to pre-recession levels. In other words, Pricing Power recovery is still lagging Space Occupancy recovery. That difference is what Laurent defined as the Economic Gap which operators need to optimize and transcend.
On the full time office side of the business, Economic Occupancy is an equation with two variables: Space Occupancy and Pricing Power.
Both variables are subject to economic conditions but CloudVO ™ Partners can optimize that equation by working on fundamentals, such as:
- Optimizing your Search Engine Management parameters – Make sure your web site shows in the first page of Google searches for Office Space related terms
- Working with Web Brokers and other channels – Make sure your channels always have up-to-date information so that they can properly market your space
- Optimizing your sales process – Follow the Andrea Pirotti approach to mine leads
- Promoting your CloudTouchdown Network in your local marketing – Hand out your free locally branded CloudTouchdown trifold brochures to prospects to show you are a local operator with a global reach … with nothing to envy Regus in their ability to support mobile workers!
- Local networking – Local Meet ups but also social media activity targeting local groups are always good ideas
- Up-to-snuff amenities and technology to make your center appealing – Stay Tuned… we will have more suggestion on this topic in forthcoming blogs and announcements
- Make their community inviting – Get some inspiration from coworking operators on how they curate strong communities
- Great customer service – To maximize retention and word-of-mouth (not to mention positive Yelp reviews!)CloudVO ™ partners can also transcend the Economic Gap with an aggressive Virtual Office Business. Unlike the dedicated office side of the business, where occupancy reaches an absolute ceiling at 100%, there is virtually no capacity limit for virtual offices. This is why many operators who have focused on virtual offices have seen their revenue actually increase during the recession. The next blog of this series will explore in more details how this was possible. Stay Tuned! The entire GWA 2013 Financial Survey can be purchased on the GWA website.