Skift Take

Funnelling budget to target these more affluent, longer-stay visitors makes sense. It might even address the labor crunch. But cities probably shouldn't take their eyes off traditional tourists at this delicate time.

Series: Future of Work

Future of Work

As organizations start to embrace distributed work and virtual meetings, the corporate travel and meetings sectors are preparing for change. Read Skift’s ongoing coverage of this shift in business travel behavior through the lens of both brands and consumers.

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Tourist boards across Europe are being urged to consider diverting some of their budget away from attracting traditional tourists towards digital nomads.

The main appeal is they typically stay for longer periods and have more disposable income, argues destination marketing agency Toposophy in a new report it published with European Cities Marketing. That money also tends to get spent over a wider geographic area as nomads prefer to seek out new places.

What’s more, digital nomads may even help alleviate the growing problem of labor crunch and “freshen up” the local jobs market, according to head of insights Peter Jordan. “Some cities may also want to widen their search not just for visitors, but global talent as well,” he said during an online launch event. “Most cities want to increase the pool of flexible skilled workers because it makes for a more attractive business investment environment.”

The hard part is convincing them to visit a city in the first place, and getting the right messages out will be important over the coming months as cities look to recover from the pandemic.

Reeling Them In

As any self-respecting tour operator would agree, a well defined package holds the key. The report outlines free internet, event listings and partnerships with local co-working spaces and accommodation providers, alongside a dedicated tourism office hub to provide the information.

“Link them together to create a whole package. Digital nomads can then consider this when looking at the city,” added Kash Bhattacharya, Toposophy’s blogger outreach specialist and founder of The Budget Traveller, speaking at the same event. “My biggest recommendation is to try and make the whole process as seamless as possible. It’s a competitive market, so have a clear plan of incentives.”

Bhattacharya also said tourist boards could partner with other associations. “On the extreme side, dating website Nomad Soulmates, which organizes conferences, brings over influencers.”

They can also list themselves on the Coworking wiki and use the Telegram messaging platform to create a community for their city.

“Having access to local communities is what nomads like me are looking for when we come to a destination,” he said. “Tourism boards don’t have to host the events themselves, but at least have a list of activities that hostels or co-working spaces are organzing. It’s just a question of joining the dots, and bringing them into one area on your website.”

The report cites Santa Fiora, in Italy’s Tuscany region, as a good example of what a dedicated microsite can look like.

Tracking the Numbers

A second challenge for tourist boards will be how to assess and quantify their success. With Covid still restricting travel, there’s an upheaval in patterns and data due to snap decision border openings and closures. It’s hard to see a clear picture of their contribution.

Croatia, for example, generated more revenue from foreign tourists during the summer months of 2021 than it ever has in the past, according to the Croatian National Bank. In fact the country’s 2021 third quarter saw revenue of $7.7 billion, double that of revenues generated during the same period in 2020. Cities like Zadar also made significant strides in developing remote work programs during the crisis.

“Counting is an important aspect, but it’s something that destination marketing organizations are going to have to work out as well,” said Toposophy’s Jordan.

Croatia was also quick to drop quarantine measures for vaccinated tourists, rendering it more attractive than other European destinations, according to a European Travel Commission Trend and Prospects report.

“In a way, digital nomadism is an interesting trend as it helps regions that were not fitting into leisure travel patterns to become new destinations, because they can offer elements like connectivity, housing, level of education, taxation and social life, which is attractive for this kind of traveler,” said Eric Dresin, secretary general of the The European Travel Agents’ and Tour Operators’ Associations.

The association said it welcomed any initiative that might help resume travel, whatever the form.

“As regards to diverting some of the marketing budgets to digital nomads, we believe indeed that this will happen; the trend is however too recent to say how big the share will be,” Dresin added.

Sidenotes

The future of work was brought up at the unveiling of Skift’s Megatrends 2022 report on Wednesday. It was revealed to be one of the reasons behind private equity group Certares doubling down on the business travel sector, according to its senior managing director.

“We believe that travel management is going to continue to be a valuable service for corporations,” said Tom Klein. “In fact, post pandemic, while the patterns may change, the focus is on people and employees, and getting them together and creating community inside your company is really something CEOs won’t say keeps them up at night, but it’s keeping them up at night.”

Certares is in the process of merging one of its investments, American Express Global Business Travel, with a blank-check company backed by asset manager Apollo to become a publicly traded company.

At the other end of the scale, Kayak’s CEO had a few words to say about larger corporate travel agencies during the Megatrends event, which was broadcast live from New York.

“Unlike a TripActions or TravelPerk or their ilk, we actually have a lot of people using Kayak already who are familiar with our brand,” said CEO Steve Hafner. “All we needed to do was cross-market Kayak for Business on the front door of our website and we get the sign-ups, particularly when we don’t charge people for that.”

Kayak for Business claims it has grown to 10,000 customers, since its official launch in July 2021 when it had 3,000 customers. Last week it integrated Southwest Airlines into its platform.

Speaking about recent fundraising activity, he added: “The valuations are totally divorced from where the market opportunity is. When I see a corporate travel agency like TripActions or TravelPerk raise a ton of dough at a $7 billion valuation, I’m like ‘someone’s gonna lose a lot of money on that.’ And it’s not going to be me.”

Some of those valuations will be proven, or otherwise, in the coming years as CEOs make up their minds on the future of work.

10-Second Corporate Travel Catch-Up

Who and what Skift has covered over the past week: 5G rollout, Airbnb, Diversity Travel, Etihad Airways, Global Business Travel Association, Hawaiian Airlines, Hilton, Norse Atlantic, Oyo, Pfizer, Skift Megatrends 2022, Sonder, Virgin Atlantic.

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