What you need to know about pricing strategies for coworking spaces

In the past, coworking spaces have used a fixed or static pricing structure. But as coworking spaces have expanded to offerings beyond memberships, whether it’s on-demand day passes, meeting rooms, or private offices, the ability to tap into other pricing strategies that are common in other industries, like entertainment, travel, and hotels, can be implemented with great success to help increase revenue and fill capacity. 

Let’s take a closer look at the various pricing strategies that can help coworking spaces grow their business and gain an understanding of how they work. 

READ MORE: How does dynamic pricing for coworking spaces work?

Dynamic pricing for coworking spaces

If you’ve purchased airline tickets or concert tickets, or reserved a hotel room online, then you’ve probably experienced dynamic pricing. Those industries have pioneered dynamic pricing, however, with Flexspace.ai’s Dynamic Pricing ®, it has expanded to coworking spaces. 

Dynamic pricing is an essential revenue management strategy that involves adjusting prices in real-time based on various factors such as demand, historical sales data, market conditions, competition, and customer behavior. It aims to optimize revenue and enhance market responsiveness. 

Within dynamic pricing, there are two specific strategies to consider:

Surge pricing

Surge pricing is a specific type of dynamic pricing where prices increase during high-demand periods. It’s typically used to capitalize on peak times when customers are willing to pay more.

Example: A coworking space might raise rates during peak day or hours to reflect increased demand.

Discounted pricing

Discounted pricing is another facet of dynamic pricing, where prices are lowered during known off-peak periods to stimulate demand. This can include promotional offers, seasonal discounts, or incentives for early bookings.

Example: A coworking space might offer discounted rates during off-peak days or hours to attract more customers.

Both surge pricing and discounted pricing are tools within the dynamic pricing framework. Surge pricing focuses on increasing prices during high demand, while discounted pricing aims to lower prices to stimulate demand. Both strategies allow operators to adapt to market conditions and optimize revenue effectively.

READ MORE: How Flexspace.ai helped Werqwise increase revenue and capacity

The 2 different types of surge pricing strategies for coworking spaces

Now that we have an understanding of these strategies, let’s dive into surge pricing and take a look at two approaches coworking spaces can take.

Surge pricing based on search date

In this approach, prices are set according to when a customer searches for a workspace rather than the actual date of use. Prices increase based on demand at the time of the search. 

If multiple users search for the same date, the price reflects this high interest, even if the usage date is still in the future. This allows operators to capture early demand and potentially boost revenue from proactive bookings. It also helps them manage availability and set customer expectations for future dates. 

Surge pricing based on usage date

This model adjusts prices based on the actual date when the workspace is used. Prices are determined by real-time demand for specific usage dates. If a particular day sees an increase in bookings, prices for that date increase accordingly.

This approach aligns pricing closely with actual demand, enabling businesses to maximize revenue during peak times while increasing occupancy by offering discounted prices during off-peak periods.

Both approaches can be successful when implemented based on specific data points. However, maintaining a balance between surge and discounted pricing is crucial; surge pricing must be applied thoughtfully, with a focus on enhancing customer value rather than exploiting demand spikes, as excessive price increases could drive customers away. With access to real-time data and robust pricing tools from Flexspace.ai, coworking spaces can implement a balanced pricing strategy to drive growth, respond to market trends, and build long-term financial stability in a competitive landscape.

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