Co-Working Spaces in Tourist Areas Lure Family Travelers

With the summer season now over, the coastal city of Zadar in Croatia is taking stock of the emerging post-pandemic trends.

Croatians and overseas visitors arrived as usual to enjoy the beaches this year, but what was different this time was that many people stayed for longer periods, and often with their families, as they took full advantage of being able to work from anywhere.

To some extent the local municipality has been ahead of the curve in accommodating them, providing free or affordable co-working spaces, thanks in part to an active IT community and digital nomad visas, and this type of government intervention is set to spread throughout Europe. The problem is summer hotspots don’t really have the right type of accommodation.

Zadar had a headstart due to a well established coworking space called Coin, set up several years ago with backing from European funds, while another hub was developed as part of a cross-border project with nearby Bosnia and Herzegovina, and Montenegro. In fact, most coworking spaces in Croatia are publicly run.

“This summer, a lot of people came from abroad. They were heavy users of the coworking spaces,” said Franjo Pehar, assistant professor at the University of Zadar. “They want to to get rid of the children and the noise of the beach, so they use the facilities as a quiet place,” he added.

Pehar is currently involved with developing another co-working space, which will be privately funded but operated by the university alongside the municipality. It’s larger than Coin, at 2,500 square meters, and will include a business incubator. Students will benefit from mixing with entrepreneurs from around the world.

Mid-Term Trends

Several Croatian towns along the coast now offer government-run coworking spaces, and three real estate companies have approached Pehar with a view to building accommodation, including one from Bulgaria that was on a fact-finding mission.

“They’ve recognised it as a potential market,” he said.

That’s because hotels and apartment-owners tend to focus on shorter stays, typically maximizing yield from tourists looking for a fortnight break.

The problem was highlighted by two fellow professors from Switzerland visiting Pehar. They struggled to find accommodation for their stay. “What we miss are mid-term arrangements which are suitable for these types of people,” he said. “It’s hard to find accommodation for three months.”

That could be about to change. Airbnb’s CEO Brian Chesky told Skift that one-fifth of its stays are for 30 days or longer, while other accommodation providers are targeting mid-term durations.

Property technology company Blueground recently raised $180 million in financing. It offers 5,000 apartments across 15 cities globally. “As the digital nomad category continues to expand and it becomes more standardized for employees to work from anywhere, the need for flexible, long-term accommodation is rising,” the company said.

Meanwhile, Barcelona-based real estate technology startup Ukio, founded by a former Airbnb executive, announced a $9 million fundraise yesterday. Minimum stays for both Blueground and Ukio start at one month.

For smaller cities, Pehar said governments should consider subsidising accommodation companies wanting to move in to offer mid-term stays.

Finding the Third Space

Coworking spaces tend to be dominated by a handful of big players, such as WeWork and IWG, and at the other end of the scale thousands of niche providers.

However, publicly funded spaces could soon fill the middle ground, particularly with reports of a European Union-wide digital nomad visa scheme in the making.

The French government announced a $150 million investment into what it calls “third spaces.” Prime minister Jean Castex is expected to announce several measures to support their development, according to reports, incorporating research from France’s Third Space Association which has identified how “local factories” can foster innovation, training and creativity.

In three years the number of these hybrid spaces in France has grown from 1,800 in 2018 to 2,500, and could reach between 3,000 and 3,500 by the end of next year.

Ireland, meanwhile, is developing a wide network of rural hubs with high-speed internet access.

Venue and workspace booking platform Hubli already offers many venues that are government owned or subsidized. Typically it sees 52 percent of on-demand meeting reservations going to non-hotels and 48 percent to hotels.

“It’s likely these newer regional hub spaces will compete on price but more importantly location. Like every new provider, they will probably lead with competitive meeting and workspace pricing to gain market share and will certainly be an attractive regional option,” said CEO and founder Ciaran Delaney. “The Irish and French government projects are very positive, and I can see more countries launching similar programs in the future.”

Platform Drivers

While governments help fund the schemes, success comes down to local communities according to Pehar. In and around Zadar, local IT communities drove the demand for coworking spaces, often using the Meetup platform. Meetup was acquired by WeWork in 2017, but later sold it in March 2020.

“When people visit a town, they check what’s going on in that (Meetup) community, and where can they regularly meet to introduce themselves. We had 10 meetups in the summer season,” he said.

Considering this coastal town as a microcosm of future trends, another takeaway is that maybe tourism boards should be engaging with local IT communities. Tech workers tend to roam more freely, so are likely to be drivers of any demand for co-working spaces — which then have the potential to attract new markets, and those people looking for longer holidays but with a need to work remotely.

Sidenotes

Rather than power to the people, it’s power to the employees. That’s according to Airbnb CEO Brian Chesky, who was one of the opening speakers at Skift Global Forum on Tuesday.

During a live interview — Chesky’s first on-stage conference appearance since the pandemic began — he described how a “revolution” was coming.

“Before the pandemic, we used to live in one place. We called that our house,” he said. “We went to another place to work, we called that our office. And we traveled to a third place. The pandemic forced us to do all three activities in one place.”

That place, he said, with Zoom could suddenly be anywhere. “This revolution really is about flexibility. Suddenly you can live anywhere, and you can work anywhere,” he added.

With that, every summer then becomes an opportunity to go away. And when it comes to future work patterns, he believes that if a CEO forces people to go back to the office five days a week, they would struggle to keep hold of staff.

“The key is, I don’t think companies will dictate this,” he said. “I think the employees will dictate this.”

Meanwhile, strategist Parag Khanna earlier discussed how a younger workforce would now become much more mobile, operating with a “sixth sense” when it comes to choosing where they live, with climate issues also playing a part.

“They’re concerned about investing their savings and going into debt to live in what could be the wrong place, so they’d rather move. Or rather they would be mobile,” he said.

This represents a great tailwind for the travel industry, he argued, with multiple moves in a year that would benefit the economy. Corporate travel may be declining, but these two observations at least offer some good news for suppliers.

10-Second Corporate Travel Catch-Up

Who and what Skift has covered over the past week: Airbnb, Airbus, Fora, London City Airport, Marriott, Plusgrade, Uber.

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