#19 "The Coworking value chain will soon integrate 3 different kinds of players" - Andri Rabetanety

Andri Rabetanety is senior lecturer in Real Estate finance at the Glion Institute of Higher Education. Expert in the hotel industry, Andri sees a similar economical value chain taking place in the coworking industry.
In the hotel industry, the economical model is supported by three kinds of different players all focusing one of portion of the value chain.
The property owner is responsible for the financing of the infrastructure, of the building. The operational manager runs the facility, the operations like the laundry services, the A/C, the rooms cleaning, the Food & Beverages, le security, etc. And the brand owner is there to maintain the consistency between different locations, in terms of marketing, positioning, pricing, etc.
It helps understanding how the hotel industry grew and accelerated its expansion during the last decades.
In the 50's, in the beginning, most of the hotels were operated by the same person, who took care of the three dimensions. It changed with management service agreement. The process of expansion could accelerate that way.
The ownership was separated. The property owner just financed the walls.
You leased the whole unit, the operator was given a management fee.
Because they wanted to grow very fast, hotels could not buy building, it required too much
Wildham Hotel Group grew only by
Hotel experience is mainly seeing the brand and knowing what to expect.
Most of the hotels operate that way. The portion between the three players may still vary.
Now, hospitality grows by "asset light strategy", through franchising.
The luxury segment can only be the exception. Hotels will keep owning a specific building because of a location value, a unique kind of property, exclusive, like one you could have on the Champs Elysée or on the 5th Avenue in NYC.
The same model is very likely to embrace the same three layers model, because it is a hospitality business.
You can create special perks related to the brand or franchise, in order to accelerate the flow of new locations opening.
You pick your franchise based on your targeted market segment.
Example : you know in a City that there is a lack of "economy accommodation", then, a landlord will take the brand related to "economy accommodation". Clarity on the segmentation is key. And this is what will most likely happen in the coworking industry.
In the beginning, the hotel came up with the stars system. It was not very satisfactory. They figured out they needed more categorization. And branding was there for that. Every time they see a hole in a market, they created a related brand.
Coworking franchise can now be a model for growth. Otherwise, it will require too much capital, as the WeWork story showed.
We should not forget the independent operators. They are representing a very big slice of the hotel market. And, again, we should not forget the role of the independent players in the coworking market.
The "Soft branding" model can bring another dimension on that. You have no brand book, or pricing, to follow. It is the "by... " experience. They give you access to the marketing platform, the loyalty program, etc. "Soft branding" is another way to integrate the population of independent players.