A Conundrum for Coworking Spaces
Demand for Coworking Space Could Spike
Coworking space providers have been battered by the pandemic for the past year. Demand for their services tumbled as people across the country shifted to working from home in a matter of weeks. WeWork’s international occupancy rate was down 47% at the end of 2020 and the company lost $3.2 billion over the course of the year.
However, in the upcoming months, coworking companies may need to deal with the opposite problem they faced a year ago: demand for flexible office space is likely to jump at a time when supply is limited.
Companies Face Uncertainty About Leases
This summer and fall, many companies will likely be reluctant to sign leases on office space before they settle on norms for remote work in the long term. In the meantime, people who have received vaccines may be eager to return to working in an office setting after a year of working from their couches and kitchen counters. Coworking spaces could provide a solution for these people.
During the pandemic, most coworking space companies have shed their leases whenever possible. Coworking companies accounted for about 7% of all space which returned to the Manhattan office real estate market between March 2020 and last month. This means that the supply of flexible office space is low and companies may need to scramble to keep up with demand in the coming months.
Though it is difficult to predict the pandemic’s full impact on long term patterns in the workplace, remote work will likely be more common. People have grown accustomed to Zoom (ZM) meetings and other ways of collaborating remotely. Though remote work has caused headaches for some employees, others feel positively about the flexibility and focus that remote work can provide. Some companies may also shift to remote work in order to cut out the cost of office space.
Because of these and other trends, analysts expect that flexible leases, which currently account for 2% of office space in the US, will account for 10% of office space by the end of the decade.
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Refinancing is the process of paying off a mortgage loan with new financing, ideally at a lower rate or with some other, more favorable, set of terms.Often, homeowners look to refinance when it could benefit them in some way, like with a lower monthly payment or less in interest payments overall.
For some homeowners, a mortgage refinance can be a worthwhile move; one that could potentially save money off the monthly bill, or over the life of the loan.
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TikTok’s Parent Company Enters the Gaming Industry
ByteDance Acquires Moonton
ByteDance has purchased mobile gaming studio Mooton as it works to gain ground in the $86 billion mobile gaming market. ByteDance is the Chinese parent company of TikTok and its Chinese counterpart, Douyin.
The Moonton deal was reportedly valued at $4 billion. Analysts expect that ByteDance will be on the lookout for other mobile gaming studios to purchase in the near future.
Competing With Tencent
ByteDance’s acquisition puts it in competition with the Chinese technology giant, Tencent (TCEHY). Tencent has acquired a number of gaming companies in recent years. It has also taken stakes in small gaming startups and has developed other games in-house.
Tencent owns a 40% stake in Epic Games, which makes the popular game Fortnite. Tencent’s gaming business has allowed it to rake in revenue from around the world. ByteDance will likely pursue a similar strategy.
One of Moonton’s most popular games is called Mobile Legends. This is a multiplayer battle game similar to several of Tencent’s big titles including Honor of Kings and League of Legends.
Leveraging TikTok and Douyin
The video game industry has seen surging growth during the pandemic as people have looked for ways to entertain themselves at home. It has also become intensely competitive as companies rush to fill this growing demand.
ByteDance will face stiff competition as it enters the gaming market, but it will have a significant advantage over many other game developers because of its social media platforms. TikTok has 700 million monthly active users and Douyin has 600 million daily active users. ByteDance will work to leverage these platforms to encourage users to engage with its games.
Glimmers of Hope for Airport Retailers
Drop in Travel Causes Crisis for Airport Stores
The sharp drop in air travel during the pandemic has battered airport stores and restaurants. Last year, global revenue for airports contracted by more than half.
For years, airport stores have enjoyed a unique position in the challenging brick-and-mortar retail industry. Travelers in airports often have time to wander through stores and are willing to buy souvenirs, snacks, and other items at high prices. But as many stores were able to shift their operations online, many airport retailers were left in a difficult situation.
Sinking Revenue Around the World
It is estimated that US airport shops and restaurants will lose $3.4 billion between July 2020 and December 2021. One of the world’s largest airport retailers, Dubai Duty Free, shared that its 2020 revenue tumbled 65% to $67 million after earning a record $2 billion the year prior.
Now these airport businesses are beginning to see glimmers of hope. Though passenger volumes in airports are still low, they recently hit the highest levels seen in a year. Airport shops and restaurants will also be receiving $800 million in assistance as part of the $1.9 trillion COVID-19 stimulus bill.
An important name in the airport retail industry is Dufry. The Swiss company operates over 2,300 duty free stores in airports and other locations around the world. It also owns the ubiquitous Hudson News airport stores.
During 2020, the company’s revenue from its airport stores sank 72%. But Dufry’s leadership believes that passenger volumes will increase in the coming months as more people receive COVID-19 vaccinations, and that airport retail will continue to recover.