A Global Backlash Against Digital Nomads Is Brewing

The generosity being shown to foreign entrepreneurs and freelancers is irking some people in Croatia.

As Skift reported last week, the country has launched a campaign where 10 “digital nomads” will spend four weeks in Dubrovnik to help its government develop policies to better understand the needs of remote workers.

But one local journalist has described the move as hypocritical to Skift.

“Croatia has had a long-term problem, in terms of being too reliant on tourism. It’s a bad ecosystem for entrepreneurs, so this is seen as a slap in the face,” said Ivan Brezak Brkan, founding editor and CEO of Netokracija — a media company dedicated to digital business, startups, marketing and culture.

He pointed to a recent protest organised by the Voice of Entrepreneurs Association (UGP) in Zagreb, where people voiced concerns over discrimination towards entrepreneurs and the private sector.

In particular, there’s been little in the way of tax breaks during the pandemic for locals. Digital nomads may have an easier time.

Some locals complain that Croatia’s digital nomad visas won’t help businesses in the country. Picture: Unsplash.

“It’s going to be easier for Serbian entrepreneurs or freelancers to work from Croatia as digital nomads than for Croatian entrepreneurs to work from Croatia,” Brkan said.

Croatia’s digital nomad visas hadn’t been planned through, he added. “One of the stipulations is you can’t work with local companies. So we’re bringing in all this talent, all this expertise, and they can’t work with local companies to help them?”

Meanwhile, he argued that the focus was on the coast, not the continent. “Digital nomad visas aren’t seen as an economy growth thing — it’s seen as a way to bring in more tourists.”

A Crossover, or Crossfire, with Tourism?

Estonia was the second country to embrace digital nomad visas, after Barbados.

About 100 digital nomad visas have been granted, but interest is high, with 10,000 people requesting more information. Could it experience a similar backlash to Croatia?

“I’ve not noticed any protesting. Our digital nomad visa was carefully designed to not compete with existing talent migration schemes for Estonians,” Alex John Wellman, head of marketing and communications team, e-residency, Republic of Estonia, told Skift. “The minimum income is quite high, higher than the average salary here. The Ministry of the Interior designed it carefully so domestic companies wouldn’t use it as a loophole around existing visa categories.”

The top countries applying are the U.S., Canada and India. Wellman is American himself. “I work for the government program, that’s a good indicator that they are quite open and welcoming here. It’s a small country, so they can’t afford to be closed off.”

Although small, Estonia has a good track record, with Transferwise founded by two Estonian entrepreneurs. Skype came out of Estonia, while another tech star is marketing platform Pipedrive.

He argues the nomad visa is simply filling a gap, as many tourists have been working in countries without recognition. The intention of these visas are to legalize something that was already happening.

He has his eyes too on working with any larger international organizations that are weighing up these new work-from-anywhere policies.

“We’ve solved the visa legality, which is a concern for large companies. Now we, and other countries, need to solve local registration requirements,” he said, referring to the fact that for stays exceeding 183 days, companies will incur local presence requirements, and so need to pay taxes, while the individual would also incur personal tax residency.

For example, a year-long visa isn’t intended as a single entry visa, but recognizes that people are, well, nomadic and like to move around from country to country.

“It’s not a quick fix,” he added.

However, there are tourism benefits ahead and Wellman said he has been approached by one of the country’s major independent hotel groups, as they see it as a big opportunity.

Saltwater Nomads, organizers of Croatia’s nomad competition, also expects opportunities for hotels, but they’ll need to educate them on new tourism patterns.

For example, hotels can’t expect nomads to come if they block out rooms for traditional peak season tourists. They’ll need to work out longer stay programs. Capacity will be a key consideration in the program, and that may be something the 10 digital nomads will be able to advise on.

When it comes to Croatia’s viewpoint, there’s no official comment on whether the digital nomad visas are biased.

But it’s likely there are many ministries involved in the decision making process, not just tourism departments.

And it’s a country that will need its nomad scheme to be competitive compared with other European countries who are established with digital nomads, including Estonia. If that involves tax breaks, and a lower income threshold, then that’s what it takes.

Over the course of the year, many countries that are heavily dependent on tourism will need to find their feet, explore their migration policies, and any skills shortages, and evolve their digital nomad visas accordingly.

The lines between tourism and work are blurring, but it shouldn’t be to the detriment of citizens. Countries will find that many of their government departments will have a view. Finding common ground will be difficult, but the rewards worthwhile.

“There is no pleasing everyone,” one government source told Skift.

Sidenotes

The Skift Live Business Travel and Future of Work Summit took place on Wednesday, covering the themes that are likely to stem from decentralized workplaces. You can catch up with some of the highlights here, but if there’s one takeaway I personally felt, it’s that the travel industry isn’t shying away from the fact that things are looking different.

Our speakers showed a genuine desire to tackle the new shape of corporate travel. The transition isn’t going to be comfortable, nothing about the pandemic is. But on all sides, from buyers to suppliers, to the technology companies in between, everyone seems willing to give it a go. Part of that honesty is probably down to the fact that within their own organizations, they’re also trying to work out travel’s role for their employees. Living the experience counts for a lot.

One subject broached was metrics. Admittedly this is a word that will put off a lot of people, but what’s increasingly clear is that not only is a new language needed to describe the “future of work,” but also new metrics and KPIs.

Rafael Museri, CEO and co-founder of hotel group Selina, said he measured success based on the number of friendships formed at its locations. It was the hotel company’s most important metric, and possibly a useful one for companies to look at when selecting properties.

Rafael Museri, CEO and co-founder of Selina, talked to Skift president Carolyn Kremins at the Skift Business Travel and Future of Work Summit on Wednesday.

Skift took part in a Zoom call with analysts at a well known investment company recently. Metrics dominated our conversation, or rather how hoteliers will need a new set of metrics to measure the potential of distributed companies.

What data do hoteliers have, so they can assess which city has a lot of remote workers? How do they gauge if those employees need a hotel to work in, or have meetings in?

Is it possible to gather information around the amounts of corporate office rent being paid in a city, as a leading indicator of how much demand there will be for new types of meeting spaces?

Can savvy hoteliers figure out the cities where company CEOs are relocating to, as a barometer of where their employees will also have to trek in for regular team meetings?

“If all the big NYC execs really live in the suburbs of Connecticut, well maybe that’s where offsets and demand for office space will be?” noted Skift senior research analyst Seth Borko. Skift Research will be watching this space carefully.

10-Second Corporate Travel Catch-Up

Who and what Skift has covered over the past couple of weeks: American Express Global Business Travel, Concur, Coupa and Emburse, Hopin, CommonPass, Selina, TripActions.

In Brief

FCM Travel’s Technology Tie-Up 

Flight Centre Travel Group’s corporate travel division FCM Travel has teamed up with travel management platform Deem, after working together for a shared customer, Toyota. The car manufacturer used Deem’s new Travel SafetyCheck feature, which provides Covid-19 and other safety information for flights and hotels within the booking flow. Last year, rival American Express Global Business Travel bought chatbot 30SecondsToFly, which is used by FCM Travel, so this latest partnership with Deem could prove longstanding.

The Mobility Platform Going Places

UK mobility company Fleetondemand has expanded, taking on a new chief financial officer, technology officer and a product officer. The company has also grown its software development team with the recruitment of a new full stack, Android, senior iOS and backend developer. New chief technology officer will Simon Lamkin will focus on growing Fleetondemand’s mobility-as-a-service platform Mobilleo. The seven additions bring the company’s headcount to 68 employees.

Sabre Steps Up NDC Bookings

Sabre is now piloting NDC capabilities in its online booking solution GetThere. Business travelers will be able to select policy-compliant NDC offers in addition to traditional content, and the company said its support of NDC offers encourages them to stick to their company’s travel policies. Sabre has also been certified as NDC Level 4 Capable by the International Air Transport Association, meaning it can support amendments that need to be made to airline tickets.

BCD Targets Clinical Trial Travel 

As part of its new Life Sciences Center of Excellence division, BCD Travel has added more solutions to focus on patients, to help reduce trial attrition. The travel management company said patient travel and logistics fulfilment was an overlooked area that tends to rely on agencies with varying competencies to manage.