Since the world’s first coworking spaces were launched in the early 2000s, the amount of flexible office space has expanded yearly, with an estimated 22,400 coworking spaces now available globally. What began as merely an alternative to the traditional office has become a worldwide phenomenon; today, there’s hardly a major city in the world that isn’t home to at least one coworking space.
While WeWork turbulence has left some critics questioning whether or not coworking is still lucrative, the industry continues to show its resilience and ability to shape-shift based on market demands.
In fact, projections through 2022 expect the number of flexible office spaces to grow annually by six percent in the U.S. and 13 percent elsewhere.
But it’s not just the number of spaces that underscores the industry’s continued accession. Going forward, coworking will see a number of innovations that will not only fuel additional growth, but transform the traditional membership model entirely.
After all, when coworking encourages near-constant innovation from its entrepreneurial members, it only makes sense for the industry itself to usher in new opportunities for remote workers that align with the maturing market.
Making more of vacant space
A hybrid model of coworking has made its mark as part of the millennial-driven “sharing economy.” To utilize space at non-operable times, large hotel chains, vacant retail stores, restaurants and even bars are offering their real estate as “drop-in” coworking spaces.
While this trend is actually nothing new, the increasing number of malls, street-front stores and other retail properties taking part in hybrid coworking is indeed a more recent development.
Real estate research firm JLL confirmed in a 2018 study that these retail-coworking spaces will grow at an annual rate of 25 percent through 2023, reaching a total of 3.4 million square feet.
Already, companies like WorkChew in Washington D.C. and Spacious in New York City have converted dozens of restaurants into flexible workspaces. For entrepreneurs, these workspaces are both amenable and practical, costing close to the price of lunch for a day pass. This negates expensive month-to-month coworking memberships, which can reach up to $950 a month in startup hubs like downtown San Francisco.
Even WeWork took notice of the opportune nature of this hybrid model, acquiring Spacious earlier this year. And it’s not just U.S. cities that are recognizing the value in this model; startups in Sydney, Tel Aviv and Melbourne have similarly found success in converting restaurants into daytime coworking spaces.
Many of these temporary spaces offer remote workers discounts and perks as they work, including lunch specials and unlimited coffee. Plus, these affordable spaces present a hard stop to the workday once it’s time for the restaurant to open for business hours—an added bonus for workaholic entrepreneurs to either call it quits for the day or arrange off-site meetings.
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Shifting from solo to multi-location operations
While it’s true that larger coworking players have dominated the market for years and continue to broaden their global reach, an increasing number of privately-owned, independent spaces are making moves to expand in 2020.
On an international scale, spaces that began as a single, small community of 25 to 50 members are facing a greater demand for additional legroom. With IWG claiming that 1.87 billion people globally will work remotely by 2022, the opportunity is ripe for coworking spaces to lay claim to this vast demographic and open multiple locations to accommodate them.
In a recent survey of 7,500 international coworking spaces, Coworker found that 71.14 percent have plans to expand to new locations, with 37.76 percent of respondents on track to open two to three locations in 2020 alone.
What’s perhaps most surprising is that a significant number of young spaces — open for only a year or two at most — are forging plans for rapid expansion into multi-location operations. For instance, Cleveland-based space Limelight founded its first space in 2017 and will open two new spaces (totaling over 8,000 square feet) in 2020.
This fast-paced expansion, which is occurring in independent spaces around the globe, is the best evidence of the industry’s continued popularity among remote workers, who are demanding access to more space than ever before.
Increasing accessibility with new global passes
Moreover, with this demand for greater access comes the rising trend of global coworking memberships, which are set to gain widespread popularity in 2020.
Annual spending for global business travel is expected to reach $1.6 trillion by 2023, presenting a new opportunity for coworking spaces to attract digital nomads who spend most of their time on the road. This opportunity is materializing in the form of global coworking memberships, or passes, which link spaces all around the world into a single, accessible network.
What this means for business travelers is that the traditional membership model is no longer the only option for securing productive workspace. Rather than paying between $200 and $400 a month for a membership to a single space or coworking conglomerate, remote entrepreneurs can pay a more affordable fee and access hundreds if not thousands of spaces — no matter where they are in the world.
Already, key players like DeskPass and Croissant offer coworking passes with access to spaces in a handful of big cities like Paris, London and San Francisco. Other options will join the competition in 2020, including Global Pass and Desana, which will focus their efforts on granting access to spaces in both large and small cities on a more global scale.
For coworking spaces, these memberships will entice an international pool of new leads as well as fill empty desks and maximize earning potential. And for entrepreneurs who are merely passing through a city, coworking passes simplify the process of locating workspace in order to have a productive workday.
Coworking in 2020 and beyond
The future of coworking is bright, especially as more coworking spaces adapt to new demands for hybrid models, multiple location offerings and increased accessibility. As market innovators create value for property developers, space operators and remote workers alike, the coworking industry will continue to thrive in 2020 and beyond.
