I recently wrote about the saturation of the word overtourism and the many fallacies and misuses involved. It’s gotten so bad, local people are chastising tourists eating in popular restaurants and kinda killing the entire tourism vibe. As you can read in detail, that anger is totally misplaced.
There is, however, an area with huge implications that is worth some debate and that’s the silent war raging between digital nomads and the real conceptual challenges of overtourism. It’s a moving target with huge positives and negatives.
For starters: overtourism and nomadism are not the same thing, but many of the frustrations being expressed through the concept of overtourism have a lot more to do with digital nomads than short term visitors.
Rise Of Digital Nomads
A digital nomad is a simple concept to understand: it’s someone untethered to one location, who is free to work and travel at their own cadence.
Quite often these days digital nomadism is dominated by people with jobs on the internet, be it coding, trading, digital marketing or design work, who can live anywhere because the only bolted on prerequisite of work, is an internet connection.
With so many workplaces going hybrid or fully remote since 2020, there’s been a huge rise in the number of people doing this once very idealized and adventurous thing. It’s become a lot less intimidating, particularly as people see more of their peers giving it a go.
Pushing Neighborhoods And Prices
If you’re in the service industry, digital nomads are fast friends. Anyone that cleans apartments, operates a coffee shop or runs a place that serves avocado toast with a neon sign is glad nomads have arrived. Prices can go up, work is steady and as long as there’s wifi, there’s business.
However, if you’re a long time resident of a certain area, there’s limited housing or rental inventory and you’re suddenly competing on a limited local salary — as many really are in other countries — against top earners from abroad, life can get very very challenging very quickly.
This is my point: many “overtourism” complaints are misplaced. Short term visitors may overrun a touristy area, but there’s nothing new there. That’s why we invented Times Square in New York. It’s really the longer term visitors that bring changes.
The two bedroom you could afford before suddenly goes for a lot more and you’re now looking elsewhere. That’s all fine and dandy for some, but for some with kids its hard to move further away from a school or a daycare.
I’ll stop the violin there because, as I mentioned in the previous overtourism article, neighborhoods change in great cities every day with or without tourism. They change with or without digital nomads and none of us, other than literal royalty, are born with any right or title to any piece of earth anywhere.
Countries Don’t Know What To Do
For countries, there’s a damned if you do, damned if you don’t element to digital nomads.
Digital nomads bring vital money to spend and bolster local business and contribute to GDP but they also bring headaches for evolving communities and countries where salaries are not rising like they are elsewhere.
For the business community in any country, it’s a resounding YES to “do you want a bunch of young, high income skewing people without local price sensitivities coming and spending their money here, rather than in their host country?”
Obviously, yes yes yes.
But for the social impacts that follow, like balancing housing restrictions with fair opportunities for nomadic visitors and protecting health and education systems it’s a hot potato. Part of that is nomads tend to want to be nomadic when there’s arbitrage opportunities for savings or higher levels of personal enjoyment.
The countries where salaries are typically in the low to mid five figures and the costs of living are far lower than the US or UK are the ones people really want to be nomadic in for the most part. You see this also with the huge US nomadic expat to Mexico City.
Why have a one bedroom in New York for $6,000 a month when you can have an entire brownstone in Mexico City for $3500? The issue is, a sudden influx of people who are very comfortable paying $3500 or more makes it very hard for locals who are topping out at $3500 a month.
Naturally, there’s a rub there as locals pay more and get less.
Like I said, neighborhoods change and fall in and out of vogue all the time and that’s just life, but it’s the fuel like accelerant that takes less than a year to have an impact that might traditionally take ten that really creates these local feelings of unease and abandonment.
The same group of people helping businesses grow is pricing many of the people that own them out of the neighborhood. That’s hard. This is why we’ve seen the likes of Spain and Portugal fully embrace nomads, then try to quickly dismantle nomad visas and then do yet another 180° and bring them back.
Solutions & Purposeful Nomadic Opportunities
Digital Nomad Visas are designed to be the fabric that weaves all these conflicting pieces together responsibly. You apply, likely pay taxes & fees and then government controls the numbers of visas issued to create the right balance. No major city is going to change overnight from 1,000 people moving in, but 500,000, certainly.
The problem or good fortune, depending on how you look at borders, is that the sharing economy in travel and loose leisure travel restrictions make it incredibly easy for nomads to setup shop for extended periods of time without being official.
A world without borders is a lovely idea, but we’re not there yet in terms of many details and the changing world of accommodations further complicates that. Sharing economy solutions make it incredibly easy and legal to find accommodations with or without official long term residence visas or digital nomad status.
Enter as a tourist and stay for up to six months is commonplace. Landlords make a lot more money turning a multi-year lease place for locals into an Airbnb or VRBO that rents out to nomads for weeks or months at a time at multiples of the price. Cash is king, so naturally places that were rented long term turn into shorter term optinos.
This in turn creates downward pressure on the overall housing market, with tight inventory further inflating local prices.
What’s The Future?
I’m a big fan of what responsible curation of nomad opportunities can bring. I also love the idea of countries competing for visitors and residents with innovative policy rather than the draconian processes involved in traditional migration.
I applaud people like Gonçalo Hall who have worked with nomads communities and government to create purposeful nomad villages or areas. These have often helped to spread tourism beyond just one major city and into other parts of a country so the positive impacts of tourism and people with money are spent wider.
During the pandemic, Gonçalo created a digital nomad village in the Azores, which were crushed without tourism. Nomads could grab up unoccupied spaces rather than displace locals and also keep core local businesses afloat, all in a mostly outdoor breezy setting. It felt like a win-win for all.
The internet and its improving speeds will continue to disrupt the traditional in office work environment allowing more people to give nomadism a whirl. What governments do to ensure housing markets and local inflation stay in check when they do is another process.
I think TAXATION is the important part of the puzzle here. Depending on the country, and on the visa type, the digital nomad is often paying nil tax, and nil national security contributions. That means they are not only potentially able to undercut a local for the identical oranges-for-oranges comparison job in the same city (because the local will have to pay their income tax) but they are not contributing in the same way to the local infrastructure. (Other than through their local spend – avocado toast and whatnot, which is presumably only a small fraction of their monthly income). In exchange for being legal and ‘above board’ I think most/many digital nomads would happily pay extra for the privilege of a visa.