With each day, more and more people are becoming digital nomads and setting out to travel the world. Not only does it sound cool — it kind of is.
Being a digital nomad means working a job which doesn’t tether you to a fixed location, opening the door for endless travel. Work doesn’t care where you work as long as you do actually… work.
As millions more people find their employers moving to hybrid or fully remote setups, the once niche dream is now mainstream. In some ways it’s glorious but depending on who you ask in countries popular to digital nomads you may hear some less enthused voices.
Digital Nomads Seek Exploration And Value
Digital nomads take different forms, but the freedom to roam is a common thread. Seeking value, or making a paycheck go further is also common.
Some nomads setup a quasi-home base in a given location and travel regularly in search of visiting every country or following the sun. Others set up a more permanent home base abroad, on a half year, year or multi year basis and use the work flexibility to “slow travel” around and really immerse in each destination.
In either form, once someone gets out of the traditional hotel setup, there’s a local impact. Not necessarily a bad one, but not necessarily a good one either.
The First Rub: Lodging
The first rub is housing. Hotels have always been purposed for transient guests, but what happens when apartments which once rented long term and local — are now hotels in everything but name, operating as short term rentals for visitors on Airbnb?
Benefits of services like Airbnb in the world are enumerable but the impacts are too. In even semi desirable tourism and nomad locations, apartment owners are typically able to make more profit than renting annually by operating as an Airbnb, even if the place is only occupied half the time
Consider a rent of €1000 a month in Spain, a medium high end figure which should get a nice apartment and would’ve once rented to locals. If an owner can charge €150 a night averaging just 15 nights per month, they’ve more than doubled the monthly income from that property.
Higher Price Tolerance On Long Term Too
Some places really are paradise and when you factor in lower cost of living — they become even more desirable. If you’ve got the flexibility, why pay $3k a month for a freezing closet sized apartment in Boston when you can pay $1000 a month for a two bedroom stunner in sunny Athens?
No offense, Boston I love you too.
The issue is that many desirable places are cheaper because income levels of locals have historically set the price of rent. The typical salaries or median incomes in these places popular to the digital nomad such as Mexico City, Bogota, Prague, Ho Chi Minh or Bangkok are often lower than visiting digital nomads.
When larger influxes of digital nomads push into a market without price sensitivity, prices go up and many local people who could previously afford a certain way of life in a desired neighborhood find themselves pushed further and further out, or in.
It’s very fair to say that cities are always evolving and this could happen with, or without any digital nomads interfering, but it’s hard to argue with the speed of change digital nomads and remote workers bring.
The Counter Argument: Opportunity For Local Business & Entrepreneurship
Owning a hipster coffee shop in an increasingly digital nomad focused neighborhood could mean being a local who is suddenly less price sensitive too — just like the visiting nomads being served, thanks to increasing profits.
The argument that weighs against the negative impacts of some people being driven out of their historic communities by price, is that nomads bring an influx of cash into the area, with more support for a wide range of local businesses.
From vintage tee’s to mezcal, well plated food and strong coffee, there’s a blueprint to enticing the digital nomad and places which previously just”got by” tend to get a shot in the arm as new wealth trickles in. People also need laundry, cleaning service, food, transport and a myriad of things which aren’t strictly “travel” related.
Think of it like opening a cool boutique in a neighborhood right before it becomes Williamsburg. No, not the one in Virginia. If you’re in a business that benefits, nomads can bring benefit to the community. There’s always work. The thing is, not everyone is in such a flexible role.
If you’re a local on a fixed salary in an industry that doesn’t interact with nomads then life is different and your money doesn’t go as far. Maybe the world is changing on you anyway, but when everyone around is suddenly speaking a different language it’s not how you feel.
Aside from person to person economic opportunities, many countries see nomads as a way to create additional tax revenue while offering attractive rates to lure visitors in.
Many digital nomads are able to take advantage of lower tax rates, though it’s worth noting that nomads on US passports are always subject to US tax rates, even while living abroad.
Even at lower tax rates nomads can bring millions if not billions to country coffers in the sense that it’s all new revenue from new people.
A Push For Respect
As people continually become untethered from fixed locations and desires to branch out grow, there are increased calls to be the “right” type of nomad.
For many interviewed by GSTP, it’s as simple as learning the basics of a language or adhering to local customs in regards to services and traditions. It’s one thing to take someone’s nice apartment, but it’s another thing to start tipping on things that haven’t ever been tipped on, creating awkward crossroads for centuries old processes.
In the end, not being fixed to a location means constant opportunity for change. The positives for many countries greatly outweigh the negatives, particularly in places that stand to benefit from a strong economic influx for local business.
From Croatia to Colombia specific visas for digital nomads are being created every day in hopes of drawing in new tourism, taxation and opportunity.