Top 10 Coworking Space Trends 2023—Experts’ Predictions on the Future of Flexible Workspace
It has become a wonderful December tradition to guess what the future of coworking spaces will look like. The desire to pull out my crystal ball🔮was strong, but I suppressed it for the sake of accuracy and turned to industry experts. Here are their predictions on the top coworking space trends for 2023.
Some of these trends started in 2022, and some are brand new.
"We have been observing is that the large suppliers are continuing with their expansion projects and will continue to open large spaces as Loom, Utopicus or Spaces. On the other hand, there are some medium-sized suppliers that are acquiring smaller suppliers, and some suppliers are joining forces to grow in size and locations."
— Manuel Zea Barral, Coworking Spain
Whether you’re a space owner or just thinking about starting one, you won’t want to miss this!
1. Hotel-style Coworking Space Brands Become Paramount
According to The Global Live-Work-Shop Report by CBRE, an overwhelming majority of people attach greater importance to the quality of their working environment and related criteria such as flexibility, location, space design, technology, services/amenities, and health/wellness.
On the other hand, the number of digital nomads in the US alone has more than tripled over the past few years.
People are craving adventure and remote work in comfortable conditions, which makes hotel-style coworking spaces such as Zoku and hotels such as Virgin that provide all required amenities in one building really attractive.
It won’t come as a big surprise if a star rating system from the hotel industry⭐ will be introduced to the coworking niche in the nearest future.
“HQ venues become smaller but better and will leverage the landlord’s amenities and service, encapsulated by the brand of the building. The brand alignment will become key.”
— John Preece, Hub Australia
“I believe 2023 will be the year Commercial Real Estate once again fails to fully embrace flex space and coworking. As an industry, CRE has been eyeing coworking for years. Rising vacancy rates and a glut of sub-leases are making the need for them to take up coworking more urgent. However, lingering economic uncertainty, the high price of capital, and an industry that has historically been slow to innovate will continue to prevent CRE from fully optimizing the opportunity in 2023.
What does this mean for our industry? We’ll see innovation and expansion in other areas. Already the hospitality industry is taking the bit. The Hoxton has launched their brand “working from,” Ace Hotels have migrated from simply welcoming workers into their lobbies to designing lobbies to act as community gathering spaces, Link in Tel Aviv, the Ryse Hotel in Seoul, and Ruby in Amsterdam jumped on the bandwagon, and even the Marriot has started to develop a brand with larger, more dynamic common spaces and smaller guest rooms.”
— Christine Andrews, Deco Group
“I see 2023’s flex space trends largely continuing on the trajectory we can already see in the market. That means a push towards extreme flexibility from employees, with more people choosing jobs based on the working model than the job description. It also means the lines between flex space and hospitality business models blurring further, with coworking spaces integrating kitchens, refreshments, concierges, and more to improve customer service. Finally, I think we’ll see workspace design continue to grow closer to that of ‘third spaces.’ Less a sea of desks, more a home away from home.”
— Zoe Ellis-Moore, Spaces to Places
“As remote work is becoming a norm, the concepts of the office and the home are merging. The needs have changed, companies are adapting to flexible work, whilst people want to work from everywhere. As a result, coliving and coworking models are satisfying new needs producing a positive impact on society, economics, and the environment by optimizing available space, giving affordability, providing a meaningful community, and reducing emissions and waste (avoiding commuting), amongst many other benefits. It is the natural direction we are heading towards.”
— Vanessa Sans, Happy Working Labs
2. Salary Packaged Workspace
Recruitment is no longer bound by geography but rather by the time zones required for particular roles. This opens up a far greater pool of talent for employers and reveals excellent job opportunities for employees.
Fortune 500 companies like Facebook, Bank of America, Salesforce, IBM, UBS, and many others have paved the way to the trend, and now more and more businesses are ready to cover coworking space expenses should their employees decide to work away from home.
“Company cars were once a perk and were then salary packaged. Mobile phones went the same way. In some organizations, computer hardware is treated the same and is salary packaged. Extreme personalization of the employee experience is leading to employees being provided with choices on more and more aspects of their work, and there is no reason why employees cannot select their own network of spaces to do their work and no reason why that cannot be salary packaged.”
— John Preece, Hub Australia
"Occupancy will continue to grow as more and more companies see the flexible office as a solution for their employees. Suppliers will offer their customers more and better services to build customer loyalty."
— Manuel Zea Barral, Coworking Spain
3. Coworking Spaces Become More Technology-Driven
Customer experience overtook price and product as key brand differentiators back in 2020, which made almost 50% of businesses make the customer experience their top priority for the next five years.
The same statistic is true for coworking spaces. Since, according to SuperOffice, 86% of buyers are willing to pay more for a great customer experience, proper investments in this area can easily double flex space income.
However, it’s challenging to provide excellent service to customers and measure and increase their happiness without technology. That’s why in 2023, we will observe more user-centric technologies at coworking spaces. They will take different forms, from self-service coworking space apps to apply for services on the go to gauges measuring occupancy and air quality to AI, VR, and the metaverse.
“Technology lets us respond to the current challenges of the working world. People spend a lot of time commuting and waiting for their trains. They try to work on trains and train stations to avoid losing this precious time. It’s not always easy to concentrate or receive an online call when you are at a crowded train station. And this is exactly the reason why we chose to put flex workspaces that are easily available via apps on train stations. We want to allow people to continue their efficient work at the station in comfortable, professional, and quiet environments. They just book the amenities they require and pay conveniently per minute. This level of service is possible only with the help of technology.”
— Bastian Boss, everyworks
“Maybe a bit of "wishful thinking" here, but we also hope that topics like blockchain, NFTs, the metaverse, or even artificial intelligence will start entering more and more coworking spaces. Either as space concepts or as part of the experience offered to members. Besides everything blockchain, we also expect more data to enter the coworking world, allowing operators to understand their businesses better and improve accordingly.”
— Pauline Roussel, Coworkies
"There will be a big leap of smaller suppliers towards digitalization in order to save on processes and resources."
— Manuel Zea Barral, Coworking Spain
4. Continued Switch of Corporates to Flex Space
According to JLL, physical office occupancy remains well below pre-pandemic levels overall, with average weekly attendance down 50%, while the occupancy at coworking facilities is significantly higher than for traditional offices. With such low occupancy, there is no sense for corporate companies to prolong expensive office leases, so their switch to coworking and flex space is expected to continue through 2023.
“In 2023, even more companies will switch to flex office space because of the uncertainty of the markets. Flex gives companies the opportunity to move with their markets without having long-term commitments.”
— Karin Poel - van der Lans, IWG
“Coworking spaces are in a rising trend for sure. Now the future will tell to which extent companies and corporate integrate coworking as part of their recruitment strategy and as part of their office offering, letting employees work closer to home. The future will tell.”
— Mélanie Burnier, The Work Hub
“After Covid, coworking has been growing as an alternative for traditional offices, offering the flexibility and added value that flexible models provide. 2023 would be the consolidation of Flexible Workspaces as the most interesting office model for the future of work.”
— Naiara Chaler, Aticco Workspaces
“Coworking locations will be discovered by corporates as the ideal 3rd space: physical spaces between the office and home, while coworkers are virtually connected with their organization.”
— Ronald Van Den Hoff, Seats2meet
“The Covid-19 pandemic led to drastic changes in the way and where people work. Physical office occupancy in major cities worldwide fell considerably from 2020 and has remained depressed for standard leases, on the other hand, we see growing demand for flex office solutions.”
— Bruno Rebille, Choose and Work
“I think more people, both individuals, and organizations, will try coworking. They might be small, corporate companies of 20-50 people that are getting rid of their offices and allowing their staff to be more flexible and remote or hybrid in how they work. They will try an experience at a variety of coworking hubs or flex workspaces and find the flavor that suits their needs because, as we know, not all cups of tea taste the same, and not all coworking hubs are the same thing. So I'd encourage people to try different places.”
— Claire Carpenter, The Melting Pot
“I foresee an increase in the number of corporate satellite offices, both inside and outside the cities, as a way to ensure that geographically dispersed work teams have quick access to the workplace. The concept of the '15-minute city' will increasingly become a reality.”
— Carlos Gonçalves, Avila Spaces
5. Energy Crisis, the War in Ukraine: Ripple Effect
As the war in Ukraine drags on, it is not only having a devastating impact on the country's economy but also causing a ripple effect throughout the world economy. According to the Organization for Economic Co-operation and Development, Russia's war in Ukraine will cost the global economy $2.8 trillion in economic output by the end of 2023.
Sanctions against Russia have led to a decline in exports and investment. This has slowed economic growth in European countries and contributed to volatility in global markets. The war has also led to higher oil prices which harm economies all over the world, as it increases the cost of everything that relies on oil, such as transportation and food.
High energy prices make a significant impact on managers’ workspace choices playing to the favor of coworking spaces. Since more and more companies choose flexible workspaces, industry growth is unstoppable. According to Statista, the number of coworking spaces worldwide is going to increase from 18,700 in 2022 to 41,975 by the end of 2024.
“The real estate market in the Czech Republic is slowing down. The war in Ukraine is having a major impact on the Czech economy. Companies are therefore being more prudent and are waiting to see what the next few months will bring. High energy prices are fundamentally influencing how company managers select suitable office space. This situation favors shared offices and coworking options. Flexibility is what clients are increasingly looking for, even those working for multinational corporations. Owners of large office buildings are slowly accepting the fact that shared offices and coworking should be an integral part of the services their buildings offer, just as it is automatic to provide an onsite cafeteria. They provide flexible workspaces for their existing tenants and are enhancing the facilities and image of the building, while also being an incubator for tenant company growth.”
— Marie Kantorová, Offices Unlimited
“Early 2023 should be interesting. Europe and the UK will likely be suffering the effects of war and economic instability and possibly a long hard winter with rising fuel costs. In the US, we have a stabilizing economy, but we have yet to see the full effects of the tripledemic. Globally we’ll be off to a slow start, but then…. People will continue to choose where they work, and they will choose coworking spaces because they feel welcome, community, and a sense of belonging. 2023 will see spaces at capacity and people overflowing into space they don’t love because all the good spaces will be full.”
— Liz Elam, GCUC
“I believe 2023 will be a challenging year for the global economy markets. I don’t find a significant effect on the ongoing activity of the Coworking Industry. Still, I believe the high interest rates will make it more complex for operators to expand. I believe the demand will keep growing for this kind of workspace solutions. More revenues will come from instant bookers compared to 2022. More and more companies will adopt a “work from anywhere “ strategy, rather than “working from home (as we see during the last 2-3 years). Events will boost up, I believe. We are social creatures, virtual events cannot replace f2f meetings. It can be on top. Generally, looking forward to the upcoming 5 years, I believe the industry will be between X2 to X3 size.”
— Nir Kelner, Adgar Investments & Development
“The world of coworking is likely to remain as difficult to predict as ever, as energy costs, economic pressures, and more keep piling on. But I'm an optimist. All of this is set against a backdrop of a developing picture when it comes to the changing way of work. There will be companies who signed leases in 2018 coming up to break this year, so there's still a lot more of the new market to emerge, and recession is the best time for entrepreneurship.
I think in 2023, we will see unpredictable requests from teams looking to work flexibly that we will need to work out how to (and if we want to!) accommodate. For those struggling spaces, I hope we see more innovative ownership structures, like mergers, franchises, community buy-outs and other, at this stage unimaginable, interventions.”
— Gareth I. Jones, TownSq
“While the topic gained popularity in 2022, we expect to see even more openings in 2023, supported by a few economic factors: the upcoming financial crisis / the energy crisis and the growing feeling of the solitude felt by people who balance their hybrid work between the office and home.”
— Pauline Roussel, Coworkies
6. Coworking Is About Shared Sustainability Values
The protection of our environment is a growing concern for many people, and it will continue to gain momentum in 2023.
Big brands, such as FedEx, Walmart, and Amazon, are switching to electric vehicles, drones, and cargo bikes to avoid fossil-fueled cars. Fast-fashion brands, such as Zara, implemented a demand planning approach to fight waste. Ikea pledged to become fully circular by 2030. McDonald’s and Starbucks joined the trend.
According to SAP research, 75% of businesses see a strong or moderate positive relationship
between sustainability and long-term profitability, so making your workplace more environmentally friendly is not only good for the planet, but it's also good for your bottom line. Customers want to be involved in eco-friendly initiatives and make an impact, so knowing that they will join like-minded individuals that share similar values gives them a solid argument to choose your space against the competitor.
“Already on April 12 of this year, it was 'Earth Overshoot day' in The Netherlands, and that is disturbing. From coworking spaces and from our customers, it is becoming more and more of a necessity to do something about this. Each country now has 1 or 2 frontrunners working on impact certificates such as GRI, WELL, and B corp (for renting coworking concepts) or BREEAM and LEED (for building owners). We are also working on making our business operations more sustainable. For example, together with Move to Impact, we are working on obtaining the B Corp certificate, and we are doing everything we can to reduce our CO2 footprint.”
— Thom Wernke, StartDock
“Larger flex and coworking brands already engaged somewhat in ESG will double down and be more public about their commitments, through marketing and reporting. And for the laggards that have yet to commit to ESG, they will begin to take it seriously and weave into their 2-5 year plans, or they will be left behind.”
“Coworking will increasingly be about shared values. Plastic-free, eco-conscious spaces will have an advantage and attract the most vibrant and talented individuals.”
— Manuel Maqueda, SUPER
“Organisations lease 50% less space. It is inconceivable that, with utilization rates of circa 20% to 40%, organizations won't completely re-consider their leased CRE footprint. It would be negligent not to.”
— John Preece, Hub Australia
7. Coworking Spaces Close to Homes
According to CBRE research, 45,5% of people name 15-30 minutes as the ideal time taken to travel to work, and 38,3% of people already enjoy this proximity. The pandemic made a deep impact on the way we live and work. Once people experienced the benefits of working from home, they are not ready to commute anymore. 2023 won’t change this habit, and customers will continue to choose coworking spaces within the walk or bike ride distance, moreover that it is advantageous for health and the environment.
“In North America, we’ll see more coworking as part of mixed-use developments with retail, restaurants, businesses, entertainment, and residential wrapped around workspaces. This trend will be more prevalent outside of major urban areas in midsized and suburban cities. Covid took the edge off the desire to commute and increasingly young families moving to the suburbs or smaller markets now expect all the amenities of downtown neighborhoods, including workspaces.”
— Christine Andrews, Deco Group
“In small towns and rural areas, we will need to see new models and innovations to address the challenges of remote working, as coworking in the post-covid times has definitely opened up the door to accommodate more and more employees in the future, and not limiting itself anymore to the freelancers and entrepreneurs historical audience.”
— Jean-Yves Huwart, SocialWorkplaces
“There will be a growth of coworking spaces in the suburbs of cities, as people look to reduce the "commute" time between home and work.”
— Carlos Gonçalves, Avila Spaces
“If people actually commute to business neighborhoods less and less, coworking spaces located in those areas will surely find new ways to monetize the space on emptier days. New kind of events, educational spaces, we are curious to see what kind of new usage 2023 will bring.”
— Pauline Roussel, Coworkies
8. Customer Acquisition Through Booking Platforms
Over the next two years, 48% of the total workforce will work in a mobile or hybrid fashion. All these people need a workspace to be productive. But how will they or their employers find suitable hubs? The answer is — with the help of booking platforms that provide Airbnb kind of experience.
2023 will become a year of partnerships of coworking spaces and booking platforms such as Coworker, Connected Hubs, Desana, Upflex, and Croissant. These partnerships will ensure that corporate employees can work from any coworking space in the world.
“More initiatives such as Connected Hubs, which is a one-stop-shop for hubs throughout Ireland, will appear in 2023. These resources will provide a vehicle for individual hubs to come together under a shared identity to maximize the economic opportunity for remote working, entrepreneurs, local businesses, and the community the hub serves. A key goal of this network is to facilitate more people working closer to their communities.”
— Stephen Carolan, Connected Hubs
“All the platforms exist to recruit bigger companies and their employees onto their platforms. They seek to facilitate getting these employees easily into a variety of coworking hubs that they list.
I think it will be interesting to see the impact of that this new type of customer / user has on existing coworking hub communities, as well as on the business model of coworking hubs.
Because from the ‘Coworking Hub provider’ side, it creates even more unpredictable flows of customers and a new type of customer.
*For instance, if I join up with a dozen platforms that all want to ‘feed me’ customers, I don't know who will become a customer of mine on any day, month, or week. How do I predict our capacity? That will be interesting... And how do these new types of customers and user change the dynamics in our coworking community?*
Employees of organizations might not have their personal preferences listed as an option for where they are ‘allowed to work from’. So how does this lack of choice and autonomy affect their engagement with the community they walk into and become a part of?
*At the end of the day, there are still a lot of changes coming in who we see as customers and how committed and loyal they become to any one particular facility or to multiple facilities.*
What is clear is Coworking hubs have a race on now for customer acquisition. Over these next few years there’s going to be more and more options and choices of where people can work from. This will come from genuine coworking hubs which focus on creating a professional community and sense of belonging. But also, from flex spaces and other public and private sector organisations who’ve got vacant property they wish to ‘reimagine and utilise. All guns are blazing now, it’s the wild west out there.”
— Claire Carpenter, The Melting Pot
9. Fractionalization of the Coworking Demographics
In 2023, we'll be able to break down the coworking demographics into two large groups. They are:
- start-ups and enterprise brands,
- digital nomads, entrepreneurs, solopreneurs, travelers, remote workers, and bootstrapping start-ups.
The first coworking demographics will be continued to serve by bigger operators like WeWork. Smaller coworking operators will compete for the second demographics. Read Christine Andrews’ explanations on the requirements of both coworking demographics to take an edge over competitors in attracting customers.
“I believe we will see more fractionalization of the coworking demographic. The bigger operators like Industrious, Spaces, WeWork, and IQ Offices will continue to effectively service highly capitalized start-ups and enterprise brands. These are companies re-creating the traditional HQ experience, just with smaller floorplates as they move toward hybrid work models. They’re seeking shorter “lease” terms but are still willing to commit to 20-30,000 square feet over two, three, or even five years.
At the other end of the scale are the digital nomads, entrepreneurs, solopreneurs, travelers, remote workers, and bootstrapping start-ups. Head Office is not paying for their coworking memberships. They’re paying with their own credit cards. As a result, they are seeking even greater flexibility, smaller, less expensive packages, more touch-down and collaborative spaces, and a heavy emphasis on community and amenities. With this demographic, coworking is competing directly with a home office, and it must be substantially better.
Operators targeting the second demographic must embrace design that is focused on an enriching work experience that transforms the workspace into a destination of choice. Successful operators will learn from the hospitality industry and re-create user experiences reminiscent of boutique hotels with welcoming, amenity-rich interiors featuring concierge-style staffing, locally sourced food and bev, partnerships with local businesses, and seamless, simple online booking and buying capabilities. This represents a tremendous opportunity for smaller, local and regional operators.”
— Christine Andrews, Deco Group/Acme Works
10. More Landlords Entering the Coworking Market
Occupancy rates for offices have been recovering since April 2020 but still remain far below pre-pandemic metrics (nearly 44%). What’s more, big companies like Yelp, Korn Ferry, and others are planning to shrink their huge office locations due to economic slowdown and low worker attendance.
Such low demand for traditional office space forces landlords to continue their intervention in the coworking space sector in 2023.
“If the upcoming crisis pushes companies to rethink their office portfolio, landlords might end up with a lot of sqm on their hands to deal with. Coworking will come as a great solution to (1) generate revenue from their building instead of having empty floors and (2) bring more life to the buildings they own as coworking spaces generally have a higher number of daily visitors.”
— Pauline Roussel, Coworkies
“I think, in cities, we will keep seeing a strengthening of the model seeing Office Corporate Real Estate owners bringing together their traditional office business in their buildings (in the Class A category) along with a growing hospitality layer on the first floors, including coworking hot-desking, meeting rooms, chill areas, event parts, smaller offices, F&B services, etc, available for all tenants.”
— Jean-Yves Huwart, Coworking Europe
To Take Away
Instead of a conclusion, I would love to quote Michael Hannigan from Coworkinn. I believe his prediction excellently summarizes the processes that will take place in the coworking industry in 2023 and beyond.
“Whether we like it or not, the future of coworking, flex offices, and office property in general, is linked to Hybrid Working.
Several dynamics are interacting to shape the future:
- The Hybrid workforce is stabilizing. Some say that it will plateau at about 40% of the 44% of jobs that can be done remotely. That’s about 18% of the total workforce.
- Many of these will choose to work from home, and the remainder will opt for a coworking/flex space where available.
- The number of coworking/flex seats is increasing, often subsidized by the government or business.
- Many businesses are carrying the cost of underutilized office space. This is an overhead that must be borne until leases expire or office space is sold.
So, we see an increased amount of empty office space. In parallel, we see an increased number of coworking/flex seats. As a result:
- Supply and demand could drive office property prices down, given the amount of unused office space that may become available.
- An increased supply of coworking/flex space, often subsidized, will facilitate hybrid workers who have difficulty working from home.
- Start-ups will be able to reduce costs, giving them a competitive advantage over established businesses carrying legacy property portfolios.
So, there are three interacting forces:
- the new hybrid workforce,
- under-utilized property,
- availability of coworking/flex seats.
However, these forces are following different time-lines:
- Right now - the new hybrid workforce exists and is increasing
- Short to Medium term - coworking/flex seat availability will increase as new suppliers enter the market.
- Medium to Long term - employers will carry underutilized property until their leases terminate, or they can sell the property, a five to twenty-year time scale.
These forces will interact to force down the value of the commercial property with knock-on effects in the pensions and investment market in the coming decades.
The critical variables that will decide our future are:
- How many hybrid workers will choose to work from home rather than a coworking, flex, or employer space.
- How involved will the government, local authorities, or other sponsors want to be.
- When are current lease agreements set to expire.
- These variables will be exaggerated, or tempered, by the size of the workforce i.e., employment levels which are directly related to the state of the economy.”
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