Revenue per Occupied Desk (RevPOD, TrevPOD)

Revenue per Occupied Desk (RevPOD) is a key performance metric in the coworking space industry that measures the average income generated by each occupied desk within a coworking facility.

It provides insight into the space’s financial efficiency and profitability by quantifying the revenue each occupied desk contributes over a specific period.

How do you properly calculate your Revenue per Occupied Desk?

RevPOD is calculated using the following formula:

Revenue per Occupied Desk = Revenue / Number of Occupied Desks

Where:

• Revenue: There are two different metrics, depending on whether you take the Total Revenue or just the Membership Revenue:
  • Membership Revenue => RevPOD: if you take the membership revenue, you will calculate the pure Revenue per Occupied Desk.
  • Total Revenue => TrevPOD: if you take the total revenue, you will calculate the Total Revenue per Available Desk.
• Number of Occupied Desks: The total number of desks occupied for a specific period. It’s important to note that if you allow your memberships to start mid-month (using Pro-Rata), you may have partially occupied desks, which should also be included in the prorated amounts.

Why is Revenue per Occupied Desk a crucial metric for flex spaces?

1. Financial Performance Indicator: RevPOD is a key performance indicator of a coworking space’s financial health and efficiency. A higher RevPOD suggests that you are not offering too many discounts.
2. Pricing Strategy Evaluation: Helps assess current pricing strategies’ effectiveness and can guide adjustments to optimize revenue.
3. Benchmarking: Allows comparison with industry standards or competitor spaces to evaluate relative performance and identify opportunities for improvement.
4. Investment and Growth Decisions: RevPOD helps decide whether to expand, downsize, or reconfigure the coworking space based on how effectively current desks generate revenue.

How can you increase your Revenue per Occupied Desk?

• Optimize Pricing: Regularly review and adjust pricing strategies to reflect demand, ensuring that each desk’s potential revenue is maximized.
• Enhance Amenities and Services: Additional value-added services can justify higher membership fees, attract more members, and increase overall revenue.
• Invest in your Community: Every dollar invested in building a strong community will pay off. Coworking spaces with very strong communities are usually more likely to maintain higher prices.

In summary, Revenue per Occupied Desk (RevPOD) for coworking spaces measures the average revenue generated by each occupied desk within the facility. It is calculated by dividing the revenue (desk or total) by the number of occupied desks.

RevPOD is crucial for assessing financial performance, evaluating pricing strategies, benchmarking against competitors, and guiding investment and growth decisions.

Coworking space operators can improve their RevPOD and profitability by optimizing pricing, investing in the community, and enhancing amenities.