The most profitable space per sq/m in your Centre!
Meeting rooms are a necessity in workspaces throughout the world. They provide quiet areas for presentations, privacy for confidential meetings and a chance to bring people together to share ideas. Often meeting rooms are presented as a value-add within workspaces and not necessarily as a revenue generating asset.
However, meeting rooms can be the most profitable space per square metre if managed effectively, and here’s why.
Meeting Room Booking trends
Looking through Meeting Hub booking data sourced from Business Centres & CoWorking spaces across Asia Pacific over a one-month period that use our software to take online meeting room bookings, we identified the following trends:
The average booking
- Duration was 2.5 hours;
- Total cost was $60.00 (AUD equivalent) excluding any catering or A/V hire;
- Notification lead time was 10 days
- 10% preferred to pay for their booking via credit card;
- 35% received free hours & were not charged for their booking
The headline cost of $60 seems low at first, but when you consider that only 65% of those bookings were paid for, it probably makes sense. The underlying issue is even though the operator didn’t charge for the booking, it still cost them in terms of base rent, labour, electricity, etc etc.
Consider also the added benefits that flow from receiving 10% of your meeting room revenue up front, via credit card at the time of booking (not servicing). This can improve your cash flow, and also allow you to enforce cancellation terms if insufficient notice is provided to cancel a booking.
While the breakdown of credit card vs invoiced bookings is not surprising given the majority of bookers would likely have a pre-existing account set up with the workspace provider, it is interesting perhaps even disturbing to the workspace investors to note that 35% of bookings generated no revenue.
External V.s Internal Meeting Room bookings
In an earlier series we talked about some of the benefits of taking external bookings, this latest data & research seems to suggest its a resounding “Yes you should!”. Lets dig a little deeper….
External bookings allow you to plan better
We found that with complimentary (internal) bookings the average lead time was just 1 day in comparison to the overall average lead time of 10 days for external, revenue generating bookings. This shows that revenue generating bookings were more likely to provide a longer notice period than complimentary bookings allowing you to plan your labour & manage your centre better.
Internal bookings are more flexible
It’s highly likely that most “member” or last minute (free / internal bookings) would probably be happy to use a common area, or non-bookable break out space as the meeting is impromptu and they are simply jumping into a conference room at a whim – Why?….because it’s empty!
So why not take both Internal & External Meeting Room Bookings?
We believe that you can and here is why. External revenue generating bookings will allow you to forecast your revenue better. You can still slot your members in around the booked & paid for slots, and you can even shuffle your bookings around and make it seamless to the end client, just like a hotel shuffles their bedrooms around without you knowing. And with all that extra revenue, you can put it towards the Friday beer fund!
My members & clients get first preference!
We hear this all the time and whilst its admirable, I’m sure if you said to them “Hey, I’ll reduce your membership &/or office rent by subsidizing it with additional meeting room revenue” you won’t hear them argue. I’m sure your investors would love to see their capital returned earlier than expected, because you introduced new revenue streams into your centre that weren’t part of the original business case. Name another industry that by design provides high touch, high value services for free and covers the cost?
It is often the case that preference is given to internal clients with many operators hesitant to accept external bookings at all. However, analysis of booking data could provide valuable information for building a case for accepting external bookings.
By taking external meeting room bookings this would then allow internal clients to ‘fill the gaps’ with their free hours. As we saw in our analysis the average booking duration is 2.5 hours, and Meeting Hub customers can already track their occupancy levels by center & by room, so they know that there is still plenty of time left in the day to cater for all bookers!
You can’t manage what you can’t measure
That old saying always rings true, and reporting plays an invaluable part of any business decisions and meeting rooms are no exception. Identifying patterns allows workspace operators to better understand their meeting room business such as peak booking times allowing you to align your assets & resources to your needs.
In order to make business decisions relating to the profitability of meeting rooms, workspace providers need access to data. As many operators today continue to use manual systems they are missing out on the chance to collect raw data and gain these types of insights.
If you want to see what all the fuss is about, why not sign up for a no obligation, 30 day free trial of Meeting Hub today!