Post-pandemic paradigm shift in work reshuffles travel destinations and leads people to relocate, but is this trend here to stay?
Fabio Cantile, Javad Maleki, Jakob Ranglin Grissler
“I felt stuck in New York City. Once things were safer, I resolved to give it a shot myself”. After living in NYC for six years, Jordan Goldmeier took his career as a data scientist to a different level and moved to Lisbon in August 2022, after COVID-19 hit. “Since before the pandemic, I had already gotten used to remote work”, he told us. “Over the last few years, I realized I didn’t even need to stay in the same location to get my work done. When I decided to become a digital nomad, it was easy to decide to work abroad”.
Jordan’s story resonates with that of thousands of people. When companies were forced to shift to remote work to minimize the risk of infections, not all their employees simply accepted to stay home. Many decided to change where home was and took advantage of the new possibilities in order to live where they desired and shape their days with new routines.
The pandemic did not start this process, it just accelerated it. Even before 2020, with the steady increase of the availability of remote work, many freelancers and independent workers were taking advantage of the ways that the internet offers to work from anywhere in the world. Some people simply decided to relocate somewhere more convenient, but many took more drastic and adventurous decisions and decided to move abroad.
Some of them embraced a lifestyle that leads them to move from place to place in short periods of time – also called digital nomadism – while others might just have short stays for weeks or a few months and then return back to their homes. Although the reasons behind this choice can vary, a lot can be said by looking at where people decide to go when they are free to move without the office tying them to one place.
Data reveal new travel pattern for remote workers
It is hard to track the movements of remote workers all over the world since there are no official statistics and surveys are not sufficient on a global scale, but some insights are still possible. In order to better understand the trends in the destinations, we analyzed data scraped from nomadlist.com, a platform conceived for digital nomads to connect and share information, and looked at where users were going, a community of more than ten thousand registered users who checked in in more than a thousand different cities in the world over the last eight years.
Destinations at the top of the list are the ones that recorded the most arrivals on nomadlist.com. Some cities have been highlighted to show some common trends like gain of popularity during the pandemic (Playa del Carmen, Gran Canaria), loss of popularity due to restrictions (Chiang Mai), birth of remote working hubs (Lisbon, Istanbul) and decrease of popularity of once appealing metropolis (San Francisco, Melbourne). The arrivals are subject to seasonal fluctuations, mostly due to climate.
The arrival of COVID-19 has played a big role in shaping the preferences of remote workers, and still shows its effects in places that are currently under restrictions. During the worst months of the pandemic, many remote workers have been leaving big cities that traditionally concentrate white-collar and IT jobs for warmer and cheaper places.
This tendency was so strong that, in the beginning of 2021, a small resort city like Playa del Carmen (Mexico) became the first preferred destination for users of the platform (a big jump from the 31st place of 2018), followed by other popular spots in the country, such as Mexico City and Tulum.
A similar trend could also be seen in Europe, where in the same period small islands like Tenerife, Madeira and Gran Canaria (in Northern Africa, but part of Spain), could compete with the most popular European capitals. Since restrictions to contain the pandemic played a big role, some destinations in countries of Southeast Asia, traditionally strongly favored by digital nomads (and backpackers), have gone down in the number of arrivals.
Focusing on the case of Europe, the trends become even clearer. While the number of remote workers grew in this period, not all the destinations recorded the same growth in arrivals. During the first winter of the pandemic, countries like Spain, Portugal and Turkey attracted a lot more remote workers, and this trend consolidated even after the pandemic started to become less of a threat. This is particularly remarkable in the case of Portugal, a small country with a population a little over ten million but capable to compete as the main destination in the continent.
Taking a closer look at how the arrivals increased comparing data from 2018 and 2022, it is visible how countries with a warm climate and – especially for workers from wealthy countries – a low cost of living have become more attractive to remote workers.
Is the trend here to stay?
But now that the pandemic appears to have abated and we have reached the first winter to mark a return to the maskless life we used to know, what is left of this? This rearrangement of work location preferences seems to not be a temporary condition. Some places started offering benefits and money to attract remote workers, as the city of Tulsa (Oklahoma), offering ten thousand dollars in cash to move there, or the state of Vermont, which created a grant program to facilitate relocating already before the pandemic. As some destinations became more popular, communities of workers started to thrive and expand, and a whole new business began to flourish around them.
The arrival of tens of thousands of remote workers has created accommodation and coworking spaces specifically designed for them, partly to create the ideal conditions for work (a quiet environment and most of all a stable internet connection) but also to satisfy the social and networking aspects that would take a long time to recreate when moving to a new city for a brief time. Not only hostels, co-living and co-working spaces: some popular destinations have seen the rise of small resorts marketed exclusively to remote workers.
“I think before COVID, it was just a small elite hippie movement. Everyone knew each other and the people were being framed as – let’s say – Paradise Birds,” Daniel Goebel, founder of CoCoHub, a coliving and coworking community for digital nomads in Malta, tells us.
He says that it used to be expensive for some companies to recruit labor from abroad. But this changed with the pandemic.
“They were forced to recruit remotely and this was a huge success for them. Huge. So now they are just recruiting remotely. And once a year or half a year, they all meet in Malta at the companies’ headquarters. And that’s a new way of operating, I think.”
An analysis by recruitment company The Adecco Group shows that between May 2020 and April 2021, the number of job ads that offer remote work opportunities increased by 123% compared with the previous year, before the pandemic. In May 2021, the share of remote employment was 11.8%, more than twice the share of May 2020 at 5.2%.
The vast impact of the remote work trend is illustrated by how it has come to reshape demographics of major cities. The OECD reports that the increase of new residents in metropolitan areas in the U.S. slowed down during the pandemic.
What’s more, purchasing prices of houses outside of large metropolitan areas went up as a result of the pandemic, as remote work allowed people to leave the expensive housing markets in the cities. Since buying a house is a long-term investment, the rising housing prices indicate that the trend toward remote work is also long-term.
However, judging by a more recent report published in November by LinkedIn, these numbers might be more a reflection of people’s wishes than a realistic prognosis.
According to the report, the share of remote work opportunities has “cooled down” significantly in comparison to non-remote positions since its record-high level of 20% in February to 14% in October.
Yet, it is still triple the number of October 2021, and five times higher than in January 2020 (at 2.8%), before the pandemic. The technology, information and media sectors remain remote-friendly, at 42%, and the education, professional service, and administrative and support services sectors all remain well above 20%.
But the strongest sign that remote work will continue are the job applicants’ wishes. For despite the decreasing number of remote work openings, it has not held back the popular movement toward remote work. Although remote work openings decreased to 14% in October, the LinkedIn report finds that more than 50% of the applications went to those openings.
Daniel Goebel believes this will lead to more remote work opportunities: “You see people quitting their jobs the moment the company asks them to come back to the office. You have huge job-listing websites that just list remote jobs. I honestly think the best jobs pay-wise are just remote, because the companies know that in order to attract the greatest talent in the world [they should offer remote jobs].”
However, as a working paper from the London School of Economics reports, remote work appears to be strongly oriented toward what the authors refer to as the “metropolitan elite”, as poorer regions and small- and middle-sized enterprises (SMEs) are lagging behind in digitalization.
While 70% of companies with at least 250 employees had at least one person working remotely during the pandemic, only one percent did so in companies with less than ten employees, the working paper finds. Further digitalization, where applicable, might therefore be needed for SMEs to attract skilled manpower and stay competitive in the new working trend.
With digital adjustments, the share of remote workers could increase further. Already some 35% of American employees are reportedly able to work from home, should it be allowed by their employers.
Bosses are saying “no”
But not many company executives seem to approve of the new trend. Though many employers appear to be positive about keeping a hybrid working approach, more employers than employees prefer the office to the home, the countryside or the beach.
A study by the professional services firm PricewaterhouseCoopers (PwC) showed that 55% of employees want to work remotely at least three days a week, while only 24% of employers expected their employees to work remotely for a “significant time”.
The ideological juxtaposition in the approach to remote work can be exemplified with the changes taking place after the acquisition of Twitter by Elon Musk, who in November 2022 warned his employees that they will have to go back to the offices full time, while former Twitter CEO Jack Dorsey had promised in a company-wide email in May 2020 that employees would have been allowed to work from home “forever” (Musk announced in December that he would step down as CEO for Twitter).
Raj Choudhury, an economist from Harvard Business School, tells Wired that historically, it has been the most wanted job candidates that have reshaped the working culture. A strong demand for remote work will likely result in more such opportunities.
As Daniel Goebel puts it: “The greatest talent will not be forced to move somewhere and pay a lot of taxes and live in a city where they don’t want to live. So of course they have to open up in order to win the battle for the best talents. I think there is no way back. It doesn’t make sense to go to an office.”
Thus, the tension between the newfound freedom of many workers and the interests of companies will decide the direction of the concept of work in the future, which will not only influence workers, but also reshape cities and communities.