Insights from SCUP 2024: Innovative Higher Education Leaders Increasingly Turning to Space Utilization Technology

Commercial Real Estate, Higher Education

By Brennan Stang, Director of Client Services - InnerSpace

Last week I had the opportunity to attend the Society for University and College Planning’s annual conference in Philadelphia, PA. It was a fantastic opportunity to connect with campus planners and higher education leaders to learn more about how they are planning for the future and looking to technology to solve some of their biggest challenges today and moving forward.

There were a number of informative sessions and I am so appreciative of the insights shared by all of the invited speakers. I learned a great deal about the challenges facing higher education in the coming years and I am excited to share some of the key themes and takeaways from the conference.

Shift From Traditional Thinking to New Approach - Data/Technology

A really exciting takeaway from the conference is that more and more universities and colleges are turning to technology as part of their strategy to take on a rapidly shifting industry. More and more planners and senior leaders are becoming increasingly open to sourcing technology experts and platforms and it is paying off.

Whether it is space utilization or asset management, higher education is looking for new ways to solve new (and existing) challenges.

Students-in-Library

Creating An Exceptional Student Experience- The Enrollment Cliff

One of the biggest challenges on the minds of leadership teams at strategists in higher education is the coming enrollment cliff. This significant demographic shift will mean fewer students will be applying to schools resulting in a drop in enrollment and resulting lower revenues.

This seismic shift means that schools will need to start investing in technology like ours to ensure they are future proofing their enrollment and revenue goals.

Having a dynamic understanding of how your space is being used means you are able to constantly adjust space allocation to enhance your overall student experience. Your utilization data may show that students are finding spaces to study in hallways and passages indicating a need for more quiet learning spaces for students as an example.

Reducing friction wherever possible means an improved student experience overall, retention of currently enrolled students and intentions to pursue grad school programs. It also means that students are far more likely to recommend schools based on their individual experiences.

Here are some of the key aspects of how campus quality creates an improved overall experience that impacts student retention.

Enhanced Learning Environment - Well-designed and maintained academic buildings, libraries, and study areas provide students with a conducive learning environment, boosting their academic performance and satisfaction (HEMS)

Improved Campus Living - Quality of on-campus housing plays a crucial role in overall student experience. Comfortable and safe living conditions help students feel at home, reducing dropout rates due to dissatisfaction with living arrangements (Budget, Plan & Research). These can include the following;

Green and Pleasant Spaces - The presence of green spaces and aesthetically pleasing environments on campus can reduce stress and improve mental well-being, contributing to better academic outcomes and higher retention rates (McKinsey & Company).
Social Integration - Spaces that facilitate social interactions, such as common areas, cafeterias, and recreational facilities, help students build strong peer relationships. This sense of community and belonging is vital for retaining students, especially those in their first year (HEMS).
Institutional Support - High-quality spaces reflect the institution's commitment to providing robust support services, including academic advising and counseling centers. When students feel supported in their academic and personal lives, they are more likely to remain enrolled (HEMS)
Higher Retention Rates - Enhancing the student experience through better space utilization can lead to higher retention rates. When students are satisfied with their living and learning environments, they are more likely to continue their education at the institution. Higher retention means sustained tuition revenue and reduced costs associated with recruiting new students to replace those who leave (HEMS).

Investing in the quality of campus spaces not only enhances the overall student experience but also significantly impacts their decision to stay and succeed in their academic journey.

Infographic on how campus quality enhances student retention

Operational Savings and Efficiency & Potential New Revenue Streams

One of the biggest things on everyone’s mind at the conference was the impact big changes will have on the bottom line. This is the biggest area where I can see InnerSpace having a significant impact on strategic planning. Here are some of the major ways space utilization data can impact your budgeting and revenue streams;

Operational Savings and Efficiency - Universities can save between 5% to 20% on operational costs by optimizing space usage. This includes savings on utilities, maintenance, and other operational expenses (Budget, Plan & Research) (HEMS).
Increased Enrollment and Retention - Enhanced campus facilities and optimized space usage can lead to increased enrollment and higher retention rates. Retention improvements alone can significantly impact revenue. For example, retaining just 1% more students can lead to substantial revenue gains, given the high cost of recruiting new students to replace those who leave (HEMS).
Higher Tuition Income - Some estimates suggest that improving student retention by 5% can increase revenue by up to 25% over several years, considering the cumulative effect of tuition and fees from retained students (HEMS).
Revenue from Events and Rentals - Universities that optimize their space can potentially increase revenue from renting out facilities for conferences, seminars, and community events. This additional revenue can vary but can represent a 10% to 15% increase in overall revenue from auxiliary services (HEMS).
Improved Academic Performance and Reputation - Better space utilization leading to enhanced academic environments can improve the institution's reputation, attracting more students and allowing for higher tuition fees. The impact on revenue here is harder to quantify but is significant, especially for universities that rely heavily on their reputation to attract international students (HEMS) (Budget, Plan & Research).

Word-of-mouth significantly impacts students' decisions to choose a university, though the extent varies. Research indicates that word-of-mouth can account for a substantial portion of the decision-making process, with some studies suggesting it influences between 20% to 50% of these decisions.

While specific percentages can vary, these estimates provide a general idea of the financial benefits that can be realized through better space utilization. Each institution's context, including its current space usage efficiency, student population, and financial structure, will influence the actual impact. (McKinsey & Company)

Infographic on how space utilization data drives budgeting and revenue

Utilization Surveys VS. Always On Wi-Fi Based Space Utilization Data

Surveys of the faculties and business units are the most traditional way they are doing it but this is self reporting and institutions are realizing this isn’t an effective way of doing space utilization because people aren’t 100% honest in their surveys because they don’t want to lose their space.

Space Studies performed by Architecture and Design firms are also a very traditional way of getting space utilization data. These are becoming an outdated method because they are only snapshots in time and can lead to the wrong decisions being made. They are also very expensive when you look at the amount of time they take to complete and limited data they provide.

More and more higher education institutions are turning to technology and new ways of collecting data and moving away from traditional approaches. This most certainly requires an innovative approach and a willingness to break from what has always been done to embrace newer and more accurate and long term solutions. I am excited to see senior leaders and campus planners showing interest and allocating budget to implementing technology like ours.

Improved Margins and Revenue - The Case for Dynamic Spaces

Universities can save between 5% to 20% on operational costs by optimizing space usage. This includes savings on utilities, maintenance, and other operational expenses (Budget, Plan & Research) (HEMS).

Save 5% to 20% on university operational costs by optimizing space usage, including utilities and maintenance

More and more colleges and universities are looking at space utilization technologies to solve for falling revenues and an innovative approach to creating the campuses of tomorrow. I was really glad to see that some of highest attended sessions were sessions regarding space utilization.

Some of the key comments from attendees I heard from the sessions I attended included the following;

Surveys of the faculties and business units are the most traditional way they are doing it but this is self reporting and institutions are realizing this isn’t an effective way of doing space utilization because people aren’t 100% honest in their surveys because they don’t want to lose their space.
Space Studies performed by Architecture and Design firms are also a very traditional way of getting space utilization data. These are becoming an outdated method because they are only snapshots in time and can lead to the wrong decisions being made. They are also very expensive when you look at the amount of time they take to complete and limited data they provide.
This also only provides a moment in time snapshot of what is actually happening on campus as opposed to our technology which provides an always on and over time look at how your campus is being used, who is using spaces, how long they are staying and the pathways they choose as they navigate throughout the campus which can be integral to informing your space allocation strategy.

Having a constant understanding of how space is being used allows you to be dynamic with how space is being used allowing you to focus on enhancing the student experience and can increase margins. Here are a few examples of how this can happen;

Repurpose Spaces - Understanding how your space is being used allows you to repurposing unused space for more student centered activities avoiding costly construction.
Real Estate Investment Decisions - Determining rent rates or downsizing leases on underperforming buildings making sure all buildings students interact with are the best the institution has to offer.
Proactive Maintenance Planning - With a data based look at how your campus is being used, maintenance teams can proactively create maintenance schedules that prioritize high use spaces. Understanding the usage of buildings with high levels of deferred maintenance allows you to demolish rather than renovate, saving you more money and making sure students aren’t in low quality buildings.

The Case For Space Utilization Technology

Through my discussion with clients and the conferences, I have also noticed a few key areas that schools are looking to optimize their space and make strategic utilization data based decisions around investment and potential divestments in their real estate footprints. Below are some of the important use cases on the minds of higher education professionals;

Optimized Space Utilization - By analyzing space utilization, universities can ensure that classrooms, labs, libraries, and other facilities are used efficiently. This optimization can lead to better scheduling and allocation of resources, reducing the need for additional infrastructure investments. Efficient use of existing spaces can save costs on maintenance and energy, positively impacting profit margins (HEMS) (Budget, Plan & Research).
Efficient Resource Allocation - Knowing how space is used allows for better planning and allocation of resources, such as staff and equipment. This can lead to cost savings and more efficient operations, freeing up funds for other initiatives that can improve the student experience and drive further margin (HEMS).
Supporting Strategic Decisions - Data on space utilization can inform strategic decisions about future campus developments, such as where to build new facilities or which existing ones to renovate. Making informed decisions helps avoid unnecessary expenditures and ensures investments are directed where they will have the most impact (Budget, Plan & Research).
Cost Savings and Efficiency - Efficient use of space can lead to significant cost savings in maintenance, utilities, and other operational expenses. These savings can be reinvested into programs and facilities that further enhance the student experience, creating a positive feedback loop that supports higher revenue (HEMS) (Budget, Plan & Research)

In summary, by understanding and optimizing how campus spaces are used, universities can enhance the student experience, leading to higher retention and enrollment rates, additional revenue streams like event rental spaces, and more efficient operations overall. These improvements contribute to better financial performance and increased profit margins.

Here are some key revenue considerations you should consider when evaluating your need for space utilization technology;

Key Revenue Factors in Evaluating Space Utilization Technology Inforgraphic

Operational Savings and Efficiency - Universities can save between 5% to 20% on operational costs by optimizing space usage. This includes savings on utilities, maintenance, and other operational expenses (Budget, Plan & Research) (HEMS).
Increased Enrollment and Retention - Enhanced campus facilities and optimized space usage can lead to increased enrollment and higher retention rates. Retention improvements alone can significantly impact revenue. For example, retaining just 1% more students can lead to substantial revenue gains, given the high cost of recruiting new students to replace those who leave (HEMS). Some estimates suggest that improving student retention by 5% can increase revenue by up to 25% over several years, considering the cumulative effect of tuition and fees from retained students (HEMS).
Revenue from Events and Rentals - Universities that optimize their space can potentially increase revenue from renting out facilities for conferences, seminars, and community events. This additional revenue can vary but can represent a 10% to 15% increase in overall revenue from auxiliary services (HEMS).
Improved Academic Performance and Reputation - Better space utilization leading to enhanced academic environments can improve the institution's reputation, attracting more students and allowing for higher tuition fees. The impact on revenue here is harder to quantify but is significant, especially for universities that rely heavily on their reputation to attract international students (HEMS) (Budget, Plan & Research).

While specific percentages can vary from institution to institution, these estimates provide a general idea of the financial benefits that can be realized through better space utilization. Each institution's context, including its current space usage efficiency, student population, and financial structure, will influence the actual impact.

Looking Ahead and Planning For The Future of Higher Education

If you are not already looking for new and innovative solutions to solve your existing problems, it is most definitely time to start thinking about. I invite you to reach out directly to learn more about our Wi-Fi based solution and how higher education institutions are embracing technology to ensure they are strategically thinking about the future of their campuses and the impact this will have on student experiences, campus planning, enrollment rates, student satisfaction and perhaps most importantly, the impact on revenue.

Higher education leaders equipped with space utilization data are setting themselves up to ensure they have a reliable and data based approach to fully understanding how their campuses are being used and leveraging this data to make immediate and ongoing strategic decision about their campus.

Let’s Talk!

Brennan Stang
brennan.stang@innerspace.io

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