soWith the End of the Pandemic in Sight, the Army of Digital Nomads Is Growing

The surprising resilience of the digital nomad and the coming work-from-abroad boom

Digital nomads offline at Outsite Costa Rica. (Credit: Outsite)

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For more than a year, the travel and hospitality sector has been absolutely wrecked by the Covid-19 pandemic. With many countries’ borders effectively closed, international travel has been especially hard hit. According to the UN World Tourism Organization, in 2020 international tourist arrivals were down 79% compared to 2019. Some 120 million tourism jobs have been put at risk, with the economic damage likely to exceed $1 trillion in 2020 alone. But one niche of the industry has, despite it all, not only held strong but seems poised for a major post-pandemic comeback: the network of Instagram-centric coliving/coworking brands that cater to the “digital nomad” set.

With Europe largely off limits to North American travelers, places like Mexico and Costa Rica, with less-strict entry requirements, are where you’re most likely to see Americans Insta-bragging from.

While some people spent the past year curled up in an overpriced apartment, a Covid-flouting contingent of “location-independent professionals” has been riding out the pandemic on the beach or poolside in countries like Mexico, Costa Rica, Thailand, and Indonesia, enjoying boho-chic accommodations, blazing-fast internet, happy hours with a “pod” of fellow global citizens, and blissful workdays watching palm-tree shadows dance across their laptop screens. All for about $20 a night.

Five-year-old Outsite.co, which operates nine properties in the U.S. and 11 more in Barbados, Costa Rica, Mexico, Indonesia, France, Switzerland, Portugal, and Spain, has seen a dramatic increase in demand in the past year and has had to add capacity. With Europe largely off limits to North American travelers, places like Mexico and Costa Rica, with less-strict entry requirements, are where you’re most likely to see Americans Insta-bragging from. Beach and mountain locations have been especially popular, says Outsite’s head of content Rebecca Males, with many guests booking several months at a time and popular locations at or near capacity. “It’s at another level now,” says Males. “People who’ve been trapped in a city are craving that space.”

In 2020 alone, Outsite launched new locations in the Canary Islands, Los Cabos, San Diego, and New York, and extended its inventory by partnering with boutique hotels in Todos Santos and Mexico City; Santa Teresa, Costa Rica; France’s Basque Country; and Barbados. (It closed a Puerto Rico location and one of its two Hawaiian properties.) It also switched to a members-only model ($149 per year; $249 for lifetime membership), partly in response to concerns about Covid.

“With fewer people and social distancing, we can’t do all the events we like. But still people are still living the lifestyle.”

And Outsite isn’t the only one cashing in on the new generation of digital nomads. The similarly-named Outpost, also founded in 2016, offers boutique hotel-style accommodations with pools, onsite cafes, airy shared workspaces, and private offices in three Bali locations. That includes a jungly outpost just outside of Ubud, which launched in January 2020, right around the time Indonesia was reporting its first Covid cases. (It recently closed an outpost in Cambodia.) Except for a three-month window when you could get visas for “social reasons,” Bali has been effectively locked down since last March. But Outpost’s CEO and cofounder, David Abraham, says that many of the freewheeling foreigners who were already in the country, including “an inordinate number of Russians,” opted to ride it out in paradise instead of rushing back to safety (and the likelihood of long-term confinement) in their home countries when Covid hit.

Abraham says Outpost’s properties, which are larger than Outsite’s, have been doing better than many neighbors, with 50% to 60% occupancy vs. about 20% for Bali overall. “With fewer people and social distancing, we can’t do all the events we like,” he says. “But people are still living the lifestyle.” And a business model that relies on long-term guests rather than regular tourists helps make revenue more predictable, at least. Recently, groups of employees of large Indonesian tech companies have also started using Outpost properties.

Apart from the scenery, surf, and sun, a key attraction of the global-citizen game in places like Southeast Asia or Mexico has always been living for pennies on the dollar compared to North America or Europe. “If you choose to live in Zurich, you’re paying Zurich prices,” says Abraham. “If you choose to live in Indonesia or Vietnam, the prices are significantly less.” Rates have been driven down by the pandemic, too — at Outpost, guests are taking advantage of that and pre-booking future dates at a discount.

The courtyard at Outpost’s location in Ubud Penestanan, Bali. (Credit: Outpost)

Rates for extended stays at Outpost’s Bali digs — your home, office, and private club combined — start at about $800 a month. Outsite’s accommodations, which range from 5 to 25 rooms, are on the luxe end of the nomad spectrum — the member cost for a monthlong stay in Los Cabos, Mexico, is a little over $1,300. “When you say ‘digital nomad,’ people imagine backpackers,” says Males at Outsite. “But in our community, the average age is around 35, and we have members in their 60s. Our locations tend to be a little calmer, and we deliver for the price we’re at.” Other brands that cater to a younger demographic, like Selina (now accepting applications for influencers), which operates over 60 locations worldwide with a focus on Latin America and Mexico, offer members lower rates and somewhat more bare-bones accommodations.

For North Americans traveling to someplace like Mexico, “having fewer [Covid-related] restrictions than at home is another attractive element,” says Males. Or, as one U.S. graphic artist who has been in Tulum since last fall says of the lively beach and party scene around town: “It’s like the virus never happened.”

In fact, Mexico has had 2.2 million cases and over 200,000 reported deaths (the actual number is thought to be much higher). And although Mexico and Costa Rica have been welcoming travelers coming from the U.S., the Centers for Disease Control has put both countries at Level 4 (avoid travel) for Covid risk.

Fortunately, Males says, major outbreaks have been avoided at Outsite’s properties — thanks to the usual array of protocols, the elimination of shared dorm-room-style accommodations, and common consideration. “Everyone realizes there’s a different level of risk in a shared space,” she says. People tend to agree on “house rules” about, say, interacting with people from outside the pod.

As vaccinations pick up and active cases tick down in North America and Europe, these new hospitality brands are betting on — and preparing for — a surge of visitors.

Many countries in Southeast Asia are much safer — once you get in. Thailand enforces a strict 14-day quarantine for foreign travelers (soon to go down to 10 days), and with a population of nearly 70 million people has recorded just 28,000 cases and 92 deaths from Covid-19. “People who decided to stay in Thailand or Vietnam have been very fortunate,” says Outpost’s Abraham. “Bangkok is relatively normal. People are very cautious, but I was at a conference the other day with 300 people. And in Singapore they also seem to do a better job, just following what people say to do — wear a mask.”

But Bali also offers a cautionary tale for broader reopening. When the island started allowing domestic tourism to resume in August 2020, some 4,000 tourists started arriving every day, deaths from Covid-19 rose five-fold, and infection rates more than doubled. The government recently announced plans to let a few major holiday spots start receiving foreign travelers in mid-June or July, under strict health protocols, and only after some 2 million Bali residents can get vaccinated.

As vaccinations pick up and active cases tick down in North America and Europe, these new hospitality brands are betting on — and preparing for — a surge of visitors. Untethered by the great pandemic work-from-home experiment, it’s not crazy to assume that a small but significant fraction of the tech-world refugees who are already propelling a population boom in places like Austin — will jump, or fly, at the chance to place their bodies and their laptops in even more exotic surroundings as soon as they’ve got their shots and/or traveling gets easier. “If any time is our time, it should be now,” says Outsite’s Males. “Remote work has become mainstream, and the market is ready to explode. We just need more space.”

Adds Abraham: “It’s been a tough year, but in some sense, this has never been a better year, because the actual lifestyle has been aided on by the fact that people don’t have to be in the office.” A recent Booking.com survey found that 37% of people looking to book a trip also wanted a place they can work from. “That’s a fundamentally huge difference,” Abraham, “and there’s not a lot of businesses really catering to that. We know the rebound is there.”

For a while it seemed that the end of the pandemic might kill off the digital nomads — to the relief of not a few non-partakers. In the end, it’s seems like it will only make them stronger.