Remote work has been rapidly on the rise since the COVID-19 pandemic and it isn’t showing any signs of slowing down any time soon. In fact by 2025, there will be more than 32.6 million Americans who will work remotely. This means a pretty sizable portion of the workforce will be working from home instead of completing their work from a physical office. While many workers are sure to appreciate the comfort of their own home, there are plenty of other workers who will crave an office-like environment to feel a sense of human connection and to have a change of surroundings. Coworking spaces are a fantastic supplement to their needs, as they offer a space outside of traditional offices to complete their work during the day.
However, despite a projected growth in demand, less than half of coworking spaces are profitable. This raises the question – why are traditional coworking spaces not making the cut? The main reasons that the spaces are suffering from a lack of profitability include the fact that these spaces are too expensive, too lonely, and too boring. Coworking spaces are expensive both for the individual and for the businesses themselves. A membership can cost anywhere between $200 to $700 per desk. If these coworking spaces don’t find enough people to pay for these high membership fees, they can be locked into high risk real estate investment deals without a way to pay off their loans.
People that have memberships with coworker spaces often complain that they are lonely and don’t have any friends, even though social interaction is a large draw for many. 69% of members don’t have friends outside of their immediate coworkers, even based on a very loose definition of the word “friend”. These working spaces also don’t inspire much creativity or joy. They often look the exact same across all of their locations and don’t offer any other options for fulfillment outside of work. For example, there are no community building spaces, such as common rooms, clubhouses, or game rooms. Without other options of spending time, most people show up, work, and leave without ever building any connections.
These coworking spaces are also struggling with a consistent source of revenue, because members are often canceling and restarting their memberships. In fact, 58% of operators claim that fluctuations in memberships are a top challenge for their bottom lines. These memberships are fickle, as most people prefer traditional offices to their coworking spaces, and will cancel their memberships after a few months in search of more community-based working spaces.
One solution to the declining profitability for coworking spaces is the community coworking model. This model aims to reduce the shortcomings of the traditional coworking model by fostering a community among its members. Companies such as Tavern Community Coworking have prioritized a social atmosphere by creating scheduled events, such as communal lunches and happy hours, among niche communities. Through this model, members are able to experience life together, beyond merely working in the same building.
There are many types of communities that can be served by these spaces beyond office workers. There have been business events that have been hosted for entrepreneurs, podcasters, marketers, and creatives to network and collaborate. There have also been more miscellaneous events that have been hosted by these companies, including those dedicated to the LGBT+ community, comedians, and foodies. All of these events can help to create a stronger sense of culture and cohesion within the larger communities they operate in.
They also operate on a highly sustainable model. They offer to use the underutilized spaces in hotels, bars, and restaurants, which drastically cuts down on their real estate expenses. This helps solve the largest problem for the traditional coworking model and allows these operators to charge much lower fees for their memberships. Some are able to charge members just $30 a month, which is a fourth of the average cost for a coworking membership. This encourages people to test out the coworking model with less skin in the game.
With all of the improvements that the community-based model has made to the traditional coworking set up, workers are anticipating a revival of the authentic spirit of coworking. Hopefully this model will encourage workers to build connections among each other, rather than drifting by in silence after a long workday. People crave human connection and a sense of community. Hopefully this can be still built into the workplaces of the remote age, instead of isolating people further from each other.
