The flexible workspace industry is undergoing a fundamental transformation. While the pandemic initially threatened to decimate co-working spaces, market data now reveals a robust recovery with surprising new directions. At the forefront of this evolution is JustCo, whose CEO Kong Wan Sin believes the industry’s future lies in adopting hospitality principles traditionally associated with luxury hotels.
“We’re not just selling desks anymore,” Kong explained during our interview at JustCo’s flagship New York location. “We’re creating experiences that blend work, social connection, and lifestyle benefits that professionals increasingly demand.” This shift represents more than mere semantics—it’s reshaping the entire business model of flexible workspaces.
According to CBRE’s latest Commercial Real Estate Outlook, flexible workspace inventory has grown 21% year-over-year, with premium offerings showing the strongest performance. The report highlights that amenity-rich spaces command 30% higher rates than traditional co-working environments, suggesting Kong’s hospitality-focused strategy is well-timed.
The parallels with the hotel industry are striking. Just as hotel brands evolved from selling rooms to offering lifestyle experiences, co-working operators now emphasize community programming, wellness amenities, and personalized service over simple square footage. JustCo has invested heavily in developing proprietary technology that tracks member preferences and usage patterns, much like major hotel chains do with their loyalty programs.
“Our occupancy metrics show that members who participate in our community events renew at rates 40% higher than those who don’t,” Kong noted. “That’s comparable to what you see in the hospitality sector, where guest satisfaction directly correlates with return visits.”
Financial data supports this strategic pivot. Morgan Stanley’s 2025 Commercial Real Estate Forecast indicates that traditional office vacancy rates remain stubbornly high at 18.2% nationwide, while premium flexible workspace providers report occupancy rates exceeding 85%. The market is clearly differentiating between commodity office space and experience-driven environments.
The economic rationale becomes clearer when examining the numbers. JustCo reports that its revenue per square foot has increased 32% since implementing its hospitality-focused model. Approximately 40% of this growth comes from ancillary services beyond desk rentals – including event spaces, premium food and beverage offerings, and technology services.
Federal Reserve economic data indicates that business formation rates continue to outpace pre-pandemic levels by 12%, creating sustained demand for flexible workspaces. However, these new businesses demonstrate more sophisticated preferences than previous generations of startups.
“Today’s entrepreneurs expect workspaces that reflect their brand values and enhance their ability to attract talent,” Kong explained. “They’re willing to pay premium rates for environments that do both.”
The hotel-inspired approach extends to location strategy as well. Like hotel chains that carefully select properties based on neighborhood dynamics, JustCo and similar operators now analyze factors beyond basic foot traffic and transportation access. They consider the cultural fabric of neighborhoods, proximity to complementary lifestyle businesses, and even Instagram-worthiness of surroundings.
A Cornell University study published in the Journal of Real Estate Finance confirms this trend, finding that co-working spaces in culturally vibrant neighborhoods command rates 22% higher than comparable spaces in conventional business districts. The premium increases to 35% when the spaces themselves incorporate design elements reflective of local culture.
This evolution doesn’t come without challenges. The capital requirements for building and maintaining premium spaces are substantially higher than for traditional co-working models. JustCo has secured over $200 million in financing to support its expansion, betting that the higher margins justify the increased investment.
Skeptics question whether this approach is scalable beyond major metropolitan markets. Cushman & Wakefield’s latest industry analysis suggests that while premium co-working performs exceptionally well in cities like New York, San Francisco, and Miami, the model faces headwinds in secondary markets where willingness to pay for experiential features remains unproven.
Kong acknowledges these concerns but remains confident. “We’ve found that when properly executed, the hospitality model works across diverse markets. The specifics may vary – what constitutes premium in Austin differs from Manhattan – but the fundamental desire for workspace experiences that enhance productivity and wellbeing is universal.”
The data increasingly supports his position. Even in smaller markets, co-working spaces that incorporate hospitality elements outperform traditional models by 18% on revenue metrics, according to the Global Workspace Association’s 2025 Industry Report.
For investors and real estate owners, the implications are significant. The most successful flex space operators now require partners who understand both commercial real estate and hospitality principles. Several major hotel chains, including Marriott and Accor, have launched their own workspace brands, leveraging existing expertise in experience management.
As we look toward the latter half of the decade, the convergence between hospitality and workspace industries appears likely to accelerate. The winners will be those who successfully balance the operational efficiency needed in real estate with the service excellence expected in hospitality.
For JustCo and Kong, the future is clear: “Five years from now, the distinction between premium co-working spaces and boutique business hotels will be increasingly blurred. We’re not just reinventing the office – we’re redefining what it means to create spaces where people do their best work.“
Given current market trajectories and consumer preferences, that vision seems less like wishful thinking and more like a prescient glimpse of the workspace landscape to come.
