Foot traffic at malls was declining prior to the coronavirus pandemic. In fact, before the health crisis began, one out of every four shopping malls was expected to close by 2022.
But the pandemic has only exacerbated an already dire situation. Since March, dozens of retailers have filed for bankruptcy, and many more are making plans to permanently close stores. That includes department stores, which malls have long relied on to serve as anchor tenants. Throw in the fact many consumers are nervous to shop in malls during the pandemic, and it's clear foot traffic this holiday season -- a time when malls and retailers see notably boosted revenue -- won't mimic past years' levels.
All told, malls are in a bad spot right now, so to survive the pandemic, they'll need to get creative in drawing in tenants and offering a more unique consumer experience. Malls with vacancies ought to consider a new approach: marketing themselves as conference space.
Will malls become meeting hubs?
These days, business conferences have hit a lull due to the pandemic, since nobody wants to gather in cramped spaces unless it's urgent. But once the pandemic wraps up, conferences and meetings will likely resume on a large scale, which gives malls struggling with vacancies an opportunity to draw in a new kind of tenant. By setting up conference and meeting rooms rentable by the hour, day, week, or month, malls can position themselves to cater to corporate clients -- while salvaging some of the revenue that otherwise would be lost when retailers increasingly move out.
Conference centers serve a strategic purpose outside of rent: They draw in customers, much like the department stores these business hubs may end up replacing. Workers who come into a mall for a meeting may be easily tempted to do some shopping before heading back to the office or home for the night. And the proximity to restaurants makes mall conference rooms an even bigger draw. Since meeting organizers typically need to provide meals or refreshments to attendees, setting up shop in malls gives them easy access to on-site catering.
Furthermore, malls tend to be located in convenient locations -- namely, off major highways and near public transportation. As such, they're a prime spot to hold conferences for out-of-towners who may not know the lay of the land.
Of course, converting to conference centers may be a bit of an unconventional pivot for malls and their commercial landlords, but since stores are likely to keep closing well beyond the pandemic, it's a strategic move shopping center operators ought to consider. If the retail apocalypse gets worse, malls will need to expand to different types of tenants to stay afloat. In light of that, serving as meeting space is actually quite a reasonable stretch.