As the pandemic progressed, 80% of all coworking spaces that were open before 2020 experienced a drop in revenue by the end of the survey. On average, they lost about 40% of their revenue. Locations in large cities were hit the hardest.
Smaller coworking spaces reported declines less frequently. When they did occur, however, the percentage declines were more severe.
Approximately one in ten coworking spaces managed to increase their revenue. Most of them can be found in small towns. They also increased in coworking spaces that opened in 2020. A different result might have been surprising, as they mostly started from scratch. For this reason, they were not considered further in the detailed analysis.
Business models: 'online' up, 'community' down
Overall, business models changed less drastically than the revenue. As expected, online services were offered more often.
About one-third of all coworking spaces increased their private office offerings, while 40% had to reduce the number of hot desks simply because of distancing regulations. After the first wave, however, demand for hot desks recovered more strongly than demand for private offices.
Community-oriented activities were hit the hardest by the pandemic, although some of them were able to take place online. There were most frequently driven down by coworking spaces that generated most pre-Covid revenue from renting out private offices. Possibly because "community-oriented activities" were more part of the decoration than the core of the business model here.
One third of all small coworking spaces reduced working hours for their employees, while larger coworking spaces consisting of more than 500 square meters additionally lowered the number of employees more often. But the latter also employed more people prior to Corona.
The general bid prices remained unchanged only in villages and small towns. In megacities, every third coworking space reduced their rates. Here, they were also even more likely to offer temporary discounts, especially large providers.
Important: The results for business models indicate only how frequently and not how much the offerings in individual coworking spaces changed. They also do not allow conclusions to be drawn about demand, since government anti-corona measures often disconnected supply and demand.
Coworking spaces have stuck to minor conversions
Many apocalyptic reports from early 2020 gave the impression that individual offices located in bunkers, each having their private restrooms and annual pantries, would be the future. But things turned out differently.
Most coworking spaces (about 70%) responded to the pandemic situation with temporary conversions that could be easily dismantled again. 15% added partially major conversions that will remain in place for the long term. About the same percentage maintained their spaces in their original condition, i.e., they did not change anything. A full 3% implemented predominantly severe structural measures.
What the conversions looked like in concrete terms was not recorded. Examples of simple, easily reversible measures include newly installed disinfection stations or furniture rearrangements, while new air-conditioning systems are more likely to be a more severe solution.
Coworking spaces renting their locations responded with the same degree of conversion as those that owned the properties themselves or managed them for the owners.
In the case of rented locations, coworking spaces pay half of their expenses to their landlords. Accordingly, they take on a high significance when the revenues and, with them, the reserves decline sharply.
40% of all coworking spaces were able to temporarily reduce their rental payments, and about 30% could postpone them at least partially to a later date. Negotiations did not lead to a result for every fifth space. Their landlords rejected such inquiries. One in ten coworking spaces did not request any support from them at all. In contrast, long-term rent reductions, new contract models or releases from leases were not granted, at least not by the end of the survey.
The governments helped... a bit.
About 60% of all coworking spaces also applied for government aid. We have not asked for the reasons of those who did not apply. However, brand new coworking spaces have not used or could not utilize this option the most.
Of those who received government assistance, one in two coworking spaces rated the assistance as somewhat helpful. About one-quarter believed it was not helpful, and the same number described it as very helpful.
What does the current work situation look like for people who work for coworking spaces?
Altogether, around 40% are as confident as they are concerned about their current working lives.
At first glance, the perceptions differ, in some cases significantly, according to their positions. Owners of coworking spaces were generally more optimistic than employed space managers. The latter are also feeling more stressed, more exhausted - and lonelier!
However, the differences are more likely influenced by the region since employed managers work more frequently in large cities which had been hit harder.
During the survey, distancing rules were in place in almost all interviewed coworking spaces. Larger events were prohibited in 80% of them. Such a ban was less often reported in smaller cities and spaces, however, they usually also held fewer 'big events' in pre-Corona times. That can maybe explain why it was less perceived as a ban. Masks in walking areas were required in 70% of all spaces and in around 20% while sitting at a desk.
Download the complete report with all results of the Coworking Survey Europe. A shorter but less detailed version can be found here.
2021 Coworking Forecast: The 'Next Normal' Scenario
2021 Coworking Forecast: The 'Moderate Lockdown' Scenario
The survey was supported by Coworking Europe, Coworking Ireland, Coworking Library, Coworking Switzerland, Coworkies, CoworkLand, European Coworking Assembly, German Coworking Federation, GCUC UK & Included.co.
The Coworking Survey Europe was conducted online from November 12th to 24th, 2020. 195 participants completed the questionnaire. 150 of them replied from Europe. 129 participants represented active coworking spaces, 101 of them were from Europe. 17 participants responded for future coworking spaces, and 3 respondents worked for coworking spaces in the past, all from Europe. The remaining respondents did not belong to any of the groups above or responded from outside Europe.
The results shown in this article are based on the responses from 101 active coworking spaces in Europe. More information about the survey's background can be found in the PDF report with the detailed results.
*5% trimmed mean of coworking spaces that opened before 2020 (arithmetic mean: 106 members in January and 81 in November 2020)