When to Charge (or not) for Meeting Rooms?

Update: 2019 Meeting Room White Paper is now available.

One of the key elements of the value proposition of shared office spaces is to provide collaborative space and meeting rooms to their members. This blog post will explore what we believe are the best practices for workspace providers to monetize access to meeting space.

Do Not Charge for Informal Collaborative Space on a Pay-Per-Use Basis

One of the tenets of coworking is to build a closely knit community of professionals that often interact in unplanned ways to maximize serendipity. Although convenience and privacy are more central to the value proposition of serviced offices, community curation is critical to their success as well. Note that in this article, we are using the terms “Serviced Office” and “Business Center” interchangeably.

Semi-private informal meeting spaces in the coworking area and/or by the break room of a business center are very desirable amenities to encourage instantaneous meetings without encroaching on the privacy of other members doing concentrated work.

Trying to monetize this kind of informal space (e.g. comfy couch, chairs, stools, or even meeting tables in open space) on a pay-per-use basis would be an undesirable barrier to accomplishing community bonding goals, not to mention in some cases, life changing serendipitous moments. Access to that kind of space should be part of the privilege of membership. If the space is heavily used, then day pass and virtual office users may be barred access from it, or else be charged a premium for it, as they are only peripherally involved with the community.

However, in general we like to discourage access restrictions to this kind of space, even to visitors, as today’s virtual office or meeting room user may become tomorrow’s full time member. In our experience, few virtual office or “walk in” visitors turn out to be heavy users of that kind of informal collaborative space anyway.

Charge Everyone for Access to Formal Private Meeting Rooms

Some operators include several hours of access to private meeting rooms as part of the privilege of membership. This is especially true for private office users whose monthly rent or membership fees are considerably higher than the virtual office or coworking passes.

Five to ten years ago, it was a common practice for serviced office space operators to think that the primary function of the meeting room was to serve full time office clients. Many provided a generous package of free access to the meeting rooms, 16 hours per month and sometimes more.

That practice is disappearing, and most operators are monetizing their day offices and meeting rooms aggressively. They learned that the contribution of a healthy meeting room business can be very significant to their business model both financially and also in terms of filling the pipeline of future full time members.

CloudVO Meeting Room Utilization by Type of Users
CloudVO Meeting Room Utilization by Type of Users

We believe that the best practice for operators is to offer no more than 4 hours of free access to formal meeting rooms as part of a full time user package. Many provide no free hours at all but offer meaningful discounts to full time members as a privilege of membership (e.g. 10-25%). Regus provides full time clients with free access to meeting rooms that is a function of how much money the clients spend every month. This typically accounts for just 1 or 2 free hours of a medium size meeting room. Pacific Workplaces (based in Northern California, with 15 locations) offer 4 hours of free access to their standard full time office members, a 50% reduction from what they provided less than 5 years ago and a 75% reduction from 10 years ago.

This trend towards charging for usage of private meeting room while not charging for the usage of informal meeting space makes sense when realizing that the ‘utility’ associated with a formal professional meeting is typically significantly higher than the ‘utility’ associated with informal meeting space. Another way to say this is that there is so much invested in a formal meeting that gathers 5, 6 or more people, in terms of everyone’s opportunity cost to be in the meeting, that the cost of the actual meeting space becomes a small % of the collective investment made to attend the meeting.

Think of a sales pitch or a fund raising pitch to busy third parties that cannot afford to be encumbered by technology glitches or a beer bust breaking out in the middle of the meeting.

Hence it makes sense for the operator to reflect that value in how he or she charges for the space, and to get a significant ROI on that meeting room space investment.

The space charged on a pay-per-use basis needs to be private, professional, with plenty of bandwidth, wireless access, and standard presentation equipment (flat screen with Apple TV or HDMI cable). That, along with the dedication of the meeting room space, is an expensive investment by the operator. The good news is, with the proper plan, that space should be the most profitable line of business for the operator as shown in the Expected Revenue Graph per meeting room size we explained in a a recent webinar on meeting room pricing.

Potential Revenue per Meeting Room Type - US Average
Potential Revenue per Room Type – US Average

Provide Meeting Room Choices

In that same webinar, we highlighted the importance of having several meeting rooms of different sizes in your inventory (1 or 2 day offices, 1 or 2 medium size rooms and one large room as a minimum). We touched on regional differences. We also explained how distributors, resellers, and other partners can quickly help develop a meeting room business with new, unique visitors, generating very high revenue per square foot and desirable traffic to also feed new memberships. Please refer to the webinar and to the associated White Paper on meeting room pricing and check our Resource Center with other similar goodies for operators.

Bundle Plans

Monetization of meeting room can come in several ways, including charging hourly rates, with or without discounts, deploying an e-commerce platform on your web site to enable real time booking of meeting rooms and charging user credit cards, leveraging partners like CloudMeetingRooms.com to expand your marketing reach, but also by providing well thought out bundles of meeting room hours.

Bundles should always be priced as a function of expected usage, in a statistical sense, based on data analysis of your pool of meeting room users. Hours should expire every month. If the operator follows these two principles well, the bundles can be priced at very attractive levels, and with minimum advertising, the meeting room revenue will increase quickly.

If you are starting your operation, use the CloudVO data as a meaningful starting point. For example, our experience of the average use of a 16-hour bundle (with no carry over of unused hours) is 3.9 hours/month when the bundle is an add-on to an existing package (e.g. Mail plan or Full time user); and 6.9 when it is a stand alone package. Price your bundles accordingly, not as if everyone were going to use all their hours. They don’t, and the light users typically more than pay for the occasional heavy user. Most people end up consuming fewer hours than they initially projected. This is particularly true if you package a 16-hour bundle with a 3-month minimum contract, which we recommend.

Upload your center information on our CloudVO portal, and we will automatically populate our e-commerce sites, CloudVirtualOffice.com and CloudMeetingRooms.com, with your offering. Join LinkedIn Workspace-as-a-Service ™ group for more data driven discussions on our industry.


About CloudVO ™
CloudVO is the umbrella brand of Cloud Officing Corp, headquartered in San Francisco, California. CloudVO’s mission is to provide comprehensive virtual office, coworking and meeting room solutions to professionals under a Workplace-as-a-Service ™ model. CloudVO operates the CloudMeetingRooms.com and CloudVirtualOffice.com e-commerce sites and grants preferential access to day offices, coworking space, and professional meeting rooms at close to 500 locations worldwide for distributed workers on a subscription or a pay-per-use basis.