Update: 2019 Meeting Room White Paper is now available.
A Guide for Flexible Office Space Providers
In a previous post, we shared some thoughts on how flexible office space operators can price their meeting rooms for hourly bookings. In this article we will explore another set of data released in CloudVO’s “Meeting Room Business Review” White Paper that quantifies revenue expectations per type of room.
The white paper explains why, from a practical perspective, a meeting room can be considered fully utilized if it is booked 100 to 120 hours per month. Using U.S. hourly averages for meeting rooms, we estimated revenue potential that greatly exceeds alternative use of these rooms as Full-Time Offices.
This is certainly true at 100 hours of utilization as shown on this graph, even after factoring special incentives for your in-house clients, promotions, and wholesale discounts to resellers (which for simplicity we have assumed to be a weighted average of 35% for Day Offices and Small Rooms and 25% for Medium and Large size Rooms). But this is also true at less efficient utilization levels.
How long does it take for a new meeting room to ramp up to 100 hours? The answer will vary greatly depending upon what type of market you are in and your marketing strategy.
However, 50 hours of booking does not seem to be a stretched goal to reach within a reasonable amount of time. As a benchmark, less than 15% of the rooms in Pacific Workplaces 86-meeting room portfolio achieved less than 50 hours of booking per month in the first quarter of this year.
With that in mind, the revenue per square foot operators can generate from meeting room bookings is significant, particularly if you look at it on a per Square Foot basis.
The following size assumptions were used to generate the per Square Foot Revenue graph, which we felt sufficient to support the average seat capacity we found in our analysis for each category:
- Day Offices: 125 sq. ft. (3 seats)
- Small Rooms: 125 sq. ft. (4.3 seats)
- Medium Sized Rooms: 220 sq. ft. (8.0 seats)
- Large Rooms: 330 sq. ft. (13.4 seats)
Remember that these estimates are based on average hourly rates throughout the U.S. and will hide significant regional variations. For example, New York City Day Offices are on average priced 21% higher than the national average and larger Meeting Rooms 38% higher.
Download our 2019 Meeting Room White Paper for more recent data analysis.