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How are coworking spaces faring economically after the end of the pandemic?  What challenges do they face today? We explore these questions in the first article of the 2023 Global Coworking Survey.
By Carsten Foertsch - Thursday, 04 May 2023

Every second coworking space currently describes its own economic situation as good - significantly less than what was said for January 2020. This means that many of today's coworking spaces have not yet reached their own pre-Corona level.

☆☆☆ The promotion of the 2023 Global Coworking Survey is supported by Nexudus Yardi Kube. Find the full report here. ☆☆☆

Differences are evident, however, depending on size. While large coworking spaces are doing better than before the pandemic, many small coworking spaces, whether in smaller or larger cities, have not (yet) recovered from the economic disruptions caused by the pandemic.

One thing to note: all those coworking spaces that did not survive the pandemic are not part of this analysis. This presumably includes a particularly large number that were already in bad shape before the pandemic, or did not receive (sufficient) government support. 

For this reason, we also compared today's figures with the totality of coworking spaces that we asked about their economic situation in 2019. The picture is more positive. Today's coworking spaces are in better economic shape overall than those that existed before the pandemic. Despite the fact that those that opened after the pandemic needed more time to become economically successful during the crisis.

The pandemic is over, the challenges are not. 

Meanwhile, almost all coworking spaces have entered the post-pandemic era. By the end of March, only 2% still saw a major problem in Covid. Most were no longer affected by measures against the virus. And only 1% still said they were being economically constrained by it. 

This did not mean that all problems disappeared. Along with some new ones, most of the old ones returned.

#1: Coworking spaces need new members

As in the pre-pandemic days, nearly every second coworking space sees member acquisition as its biggest challenge. Since this goes to the heart of their business model, and very few industries have customers who come on their own, the result is not surprising.

Especially when coworking spaces are struggling economically, no problem weighs more heavily than the lack of enough members & users (> 90%!).

It is equally unsurprising that newly opened coworking spaces often see this as their greatest challenge. Since the share of new coworking spaces continues to be very high, this problem also ranks high in the overall analysis.

In addition, small coworking spaces, as well as those in small towns and rural areas, struggle to find enough new members & users.

#2: High real estate prices remain a problem in major cities

The second most cited problem is high real estate prices. Coworking spaces in large cities report this particularly frequently; the larger the city, the more often. Conversely, this problem hardly exists in rural regions.

Financial difficulties follow in third place. This can affect all coworking spaces, no matter how large, how old or in which area they operate. Unsurprisingly, only those in a poor economic situation cite it disproportionately often.

One in four coworking spaces cites high energy prices. This problem mainly affects locations in Europe.

Lack of space for extensions can also be a challenge. About one in five report this. For coworking spaces in good economic situations, this is the main problem.

However, this is not the case for successful chains that already operate a large number of locations and have therefore been able to solve this problem more often. Instead, they have a harder time finding enough new employees to run their (many) locations. 

Inflation is new to the problem ranking and hits about one in six coworking spaces hard. Those located in megacities stand out here, where it is cited as the third biggest problem.

For many members, an existing community is one of the most important reasons for choosing a coworking space. And for those whose coworking space was chosen by their company, the social atmosphere is the most important factor.

As a result, a lack of community leads to less revenue and mainly affects coworking spaces in a bad economic situation. In general, community is lacking in spaces where few members work. Not surprisingly, this includes spaces that have recently opened.  Coworking spaces in sparsely populated areas are also more likely to be affected.

Next page: Rural coworking spaces have yet to see the business benefits of remote work.

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