The future of shared workspaces and social clubs after COVID-19
This article is part of a Fortune Special Report: Business in the Coronavirus Economy—a look at the impact of the pandemic on more than 50 industries.
As members of one table after the next tucked away their laptops and replaced them with glasses of Champagne, it was business as usual at Soho House New York on March 12. Every seat was filled, with globe-trotters and locals alike, and there was even talk of heading up to the roof to take advantage of the delightful pre-spring weather. But within just a few days, things would come to a complete halt here at the Meatpacking District venue, and Soho House would be forced to close the doors to its 29 locations across North America, Europe, and Asia.
As one of the most exclusive and legendary social clubs in the world, Soho House—and its recently launched coworking space, Soho Works—is far from alone in having to close shop in the wake of COVID-19’s spread and the panic surrounding it. But as many coworking spaces and social clubs shut down and begin rethinking their entire business strategies—including how they will handle member fees, event programming, and staff compensation—some are opting to stay open, even as local governments have asked all nonessential businesses to close.
As Soho House made the tough decision to close its venues—first in North America and Great Britain, and eventually around the world—until further notice, founder Nick Jones sent an email to all members on March 17 in order to shed some light on the situation. “As we all continue to navigate COVID-19 and the uncertainty surrounding our everyday lives, the need for us as a community to look out for and support each other becomes even more important,” he wrote, noting that safety is an absolute priority and that the company has followed local government guidelines in each of its territories and has thus closed all houses for the foreseeable future.
The email further explained that members would be given a credit for the monetary value of their memberships during the closure, which could be used for food, drink, bedrooms, spa treatments, or on Soho Home merchandise in the future, and that Soho House is hoping to offer some of its illustrious event programming digitally so that gym classes, food and drink workshops, and the like could be viewed from home.
The Wing—a women-focused coworking space with 11 locations throughout the United States and London—closed all of its venues on March 14, with plans to remain closed through the end of the month at least. “With over 12,000 members globally and spaces in seven major metropolitan cities, we have a responsibility to do our part in preventing the spread of COVID-19 and keeping our employees and members safe,” says cofounder and COO Lauren Kassan.
During the closure, members will not be billed, and The Wing will continue to compensate its staff, including paying all hourly employees for their scheduled shifts. The club is also making programming available digitally, not just for Wing members but for nonmembers too. Scheduled virtual happenings include a conversation between Fran Drescher and Rosie O’Donnell, a lesson on finance in the age of the coronavirus, a cooking class with Alison Roman, and a panel on working parents with New York Times Parenting. The Wing also announced on March 23 that it would make its offices available for coronavirus relief efforts conducted by nonprofits as well as medical and governmental organizations.
But not all coworking spaces are taking the same approach. Impact Hub, a global entrepreneurial network with more than 100 workspace locations worldwide, is approaching its response to COVID-19 on a case-by-case basis. “All Impact Hubs are following their local governments’ guidelines regarding closings, people’s safety, and hygiene,” says Gabriela Gandel, the company’s global executive director. “And in geographies where governments have been slow to respond, Impact Hubs have taken a strong stance and decided on preventive measures ahead of these restrictions being imposed, in support of the health and safety of their communities.”
As of March 27 it had closed 57 locations across the world, and those that remained open were operating in a reduced capacity. But because Impact Hub’s focus is more on providing a network of like-minded entrepreneurs than on offering coworking and office space, there is no immediate answer about how to handle membership fees. “It depends on local market specificities,” Gandel explains. “Some Impact Hubs are offering current members the Connect Membership, an online membership that allows members to stay in contact with their community and still have access to services, programs, and partnerships, while others offer discounts.” In some cases, members have chosen to continue paying for membership in order to support Impact Hub’s operations within their respective countries, especially where less government support is available.
All Impact Hub employees still have their jobs, with most now working from home, and all continue to be compensated, and the company has applied for local government benefits to guarantee appropriate support for staff members during this time. And despite the tough times, the company thinks there might just be light at the end of the tunnel. “The post-COVID-19 economic recovery period will be a once in a generation opportunity to address two of the most urgent global issues of our time—inequality and climate change—as we rebuild local, national, and global economies,” says Gandel. “We trust that the Impact Hub network’s activities are essential to help economies recovering from this pandemic and its consequences, and shaping a new world that will definitely come.”
Then of course, there’s WeWork, the once-revered coworking giant, which has been shrouded in controversy in recent years. Though the company has continuously cited the health and safety of its members and employees as its top priority, it has kept almost all of its 847 locations open, a decision that’s been met with scrutiny. CEO Sandeep Mathrani wrote in an email to employees on March 17 that “WeWork is in an incredibly unique position,” explaining that as a service provider, the company has an obligation to keep its buildings open: “In the same way we expect certain businesses to remain open for us—whether it be a fulfillment center to send us a package, a bank so we can handle finances, grocery stores and pharmacies who supply us our valued goods—we too have members counting on us to remain open so they can run their companies to generate revenue, pay their people, and continue serving their customers.”
It’s unclear how many of WeWork’s members are deemed “essential” or from which locations those businesses operate. But as of March 30, the only WeWork building closed in North America was in Los Angeles, where someone in the building had tested positive for COVID-19.
As WeWork maintains it is up to its members to determine whether or not they will use the coworking space, no member fees have been paused or waived during this time. And even as the company has offered its own employees the option to work from home with continued compensation, WeWork is also offering daily $100 bonuses to those who come into their respective locations. In the few countries where WeWork has been forced by government order to close—such as in India and Peru—it has maintained key-card access, meaning that any companies deemed essential can still access the space.
It’s difficult to say if the coronavirus pandemic will affect the shared workspace and social club industry in the long term, even as the situation becomes more under control and people return to their normal lives. But some members are remaining loyal—for now. “As soon as they reopen, I will be back,” says Gabriela Lawrence, owner of PushingSix PR and a longtime member of The Wing. “Based on the news, it seems like they—and everything else in New York—may be closed for another month, and by that time, I will have social-distanced enough. I’ll be ready to return, this time with a bottle or two of Purell in hand.”
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