By the end of 2020, every second coworking space in Europe described its economic situation as bad. It looked brighter in September 2020 before the lockdowns were renewed.
The situation worsened in particular for spaces targeting individual members. The more rapidly recovered demand for hotdesks from the summer presumably dropped again.
For those who wanted to rent their workspaces to companies with several employees, nothing changed. The situation had already looked disastrous in September. They may have recovered at a slower pace after the initial lockdown, or the pandemic may have had a more delayed effect due to extended contract terms. In addition they are generally located in major cities, which were hit more severely.
Coworking spaces also rated their situation as worse if they operated more than one location or had (already) received government aid. The situation for coworking spaces in suburban and rural areas was not good, but slightly improved.
Capacities diminished by 20%
In terms of supply, coworking spaces lost an average of one-fifth of their leasable desks compared with the start of 2020, with capacity falling particularly sharply in megacities. For spaces mainly providing private offices prior to Corona, this loss was limited.
25% less members
Overall, membership numbers at the end of 2020 were about a quarter lower than at the beginning of 2020, dropping from roughly 65 to 50 members per coworking space on (the trimmed) average*. Those in big cities have lost relatively more members - even small spaces - due to the elimination of workstations alone.
Providers relying more on private offices in the past have also been able to retain relatively more memberships, at least contractually, with their lower capacity losses. In practice, however, during the second lockdown, their remaining members were still far less likely to work in their offices than members in other coworking spaces.
This leads us to two conclusions: Either the companies retained the spaces to return, but they are more likely to allow their employees to work from home. Alternatively, these companies did not (yet) leave their rented premises due to longer running contracts. In the latter case, a loss of members would occur after a delay for providers of private offices. At the very least, these coworking spaces could adjust to changes with greater advance notice.
Coworking spaces are used half as often as in the old normality
During the pandemic, the number of daily users on weekdays declined much more significantly. In January, 60% of all members used their coworking space on a daily basis; in November, the remaining number was down to 40%. As previously mentioned, the daily utilization rate dropped most significantly in coworking spaces with a particularly large number of private offices beforehand. Coworking spaces in small cities were able to decouple themselves from this trend, based on generally lower membership numbers.
Before the pandemic, the rule was that individual members choosing and paying for coworking spaces themselves were less likely to use them every day than members whose companies opted for a coworking space. Today, the latter attend less frequently and presumably work more in their home offices.
Occupancy: 100% is the old 80%
The average contractual occupancy rate for all coworking spaces remained stable compared to the beginning of 2020. In January 2020, it was around 100%, as it was at the end of 2020.
How does this compare to declining member numbers? If capacity is shrinking, fewer members are enough for full occupancy. However, compared to pre-Corona capacity without distance rules, the rate dropped to an average of 77% in real terms in November, excluding new spaces that opened in 2020.
Coworking spaces with occupancy rates of well over 100% continue to accommodate 'hot desks', because all members rarely work at the same time, allowing the renting of tables to multiple members.
▶︎ Next page: How the revenue has developed and the business models have changed