The new business model for post-pandemic co-working spaces

Abstract

Co-working is a concept of sharing office spaces by a number of people with different business backgrounds and from different companies. The new concept advocates people within the shared space to communicate, collaborate, exchange ideas and insights that stimulate one another to produce various kinds of business solutions. Co-working spaces, as a rising sector in the real estate industry, has been observed replacing many traditional offices where employees from the same organization work in office cubicles. These spaces are attracting more and more organizations and individual workers to work in because of the flexibility offered and numerous amenities provided that cannot be seen in traditional offices. Shorter leases with multiple options and shared amenities such as pantry, meeting rooms, common areas, etc. provides convenient business solutions to many workers. With the emergence of coronavirus-19 (Covid-19), the skyrocketing growth of the co-working space sector was hampered. With the huge impact of the pandemic on the society, many economic activities had to be stopped. Stay-at-home protocols and work-from-home policies caused co-working space members to leave the space. Epidemic preventive measures implemented by governments also led to shrunken operating capacity in the shared workspaces. Revenues were greatly reduced, making co-working companies all around the world facing financial difficulties. Record-high number of co-working spaces, including the branded ones, was observed to be closed throughout these two years and it was questionable whether the sector could resurge from the setbacks in the times after the pandemic. This paper identifies current business model of co-working spaces and investigates the consequences brought by Covid-19 towards the co-working space sector, followed by proposal of a new co-working space business model in the post-pandemic era. Both primary and secondary data are collected by means of documentary analysis, interviews and case study in a qualitative research approach. Qualitative research analysis is used to further process and categorize data into readable findings as the basis for designing the business model concerned. Findings from these research methods has generalized a summarized view on the strengths and challenges of the current co-working space business model used by different operators. Despite being good in delivering values by providing flexibility of different extents, fascinating amenities, and having various partners to assist business development, previous models failed to address issues under the changing environment induced by the pandemic. Shortcomings in contract procurement strategy, growth tactics and resource allocations also suggested the need of adjustments. The new model proposed in this dissertation includes adoption of a dynamic contract procurement strategy, an adjusted customer base portfolio, addition of new amenities, new technology in services provisions, enhanced measures for workplace health and safety, etc. It is believed that the model has development potentials in the post-pandemic times when works are slowing decentralizing and remote working will be prevalent. Yet, there may still be challenges like conservative mindsets of landlords as well as immature technology which may obstruct the further adoption of the new business model.