Behind Brazil’s Plan to Launch South America’s First Digital Nomad Village

The company behind Europe’s first “digital nomad village” in Madeira, an autonomous region of Portugal, is now taking the project to Brazil.

A pilot project first being revealed to Skift will open in Pipa, in the country’s northeastern state of Rio Grande do Norte, on November 1 and run at least until the end of April.

Like most destinations during the pandemic, Madeira faced a slump in tourism. As a result, the regional government backed digital community NomadX’s village concept in the small town of Ponta do Sol.

That project launched in February 2021, and promoted accommodations, workspaces and networking events to digital nomads and remote workers seeking a change of scenery after a year of lockdowns. It was hailed as one of the first public-private sector initiatives of its kind, designed to stimulate economic activity.

Now a similar project has been given the green light by Brazil’s government, and will be the first of its kind in South America, according to Goncalo Hall, founder of NomadX, who said he managed to successfully demonstrate the economic impact such initiatives can have.

Regeneration Goals

NomadX’s Madeira project officially generated $30 million a year for local economy, based on the 6,000 people who registered for the program, Hall said, but he estimates the real amount could be as much double that.

This type of financial injection appealed to Brazil, and Hall predicts this next “village” will generate $36 million a year for Pipa’s community. Roughly 25 percent of digital nomads are entrepreneurs, so there’s more scope for longer-term spending, rather than just tourists and backpackers hitting the bars and beaches.

NomadX helps prepares locals to deal with an influx of remote workers and digital nomads, ensuring the infrastructure like accommodation and Wifi is suitable. The beach town of Pipa was also selected as it’s 90 minutes from Natal International airport, and has a good bus network. The initial focus will be on setting up co-living accommodation, and if successful, NomadX will continue with the program in partnership with the local municipality and state tourism board.

“The pandemic opened up the government to new solutions,” Hall said. “If tourism had been at full power, I don’t think the government would have had the bandwidth to even think about digital nomads.”

In fact, the village idea wasn’t originally designed for pandemic-weary digital nomads. Hall, who will be speaking at the inaugural Skift Global Forum East in December, said he first wrote a proposal for the Italian government five years ago, as a way to help it repopulate its smaller villages.

“Nomads appear at the top of the funnel, but the end goal is to create an ecosystem,” Hall said. “Yes, the shiny object is digital nomads, that’s how to attract people …. (but) there’s always a long-term vision to what we build.”

Building Them Isn’t Easy

It took two years to kickstart the Brazil project, Hall said. As well as dealing with coronavirus, the country is gearing up for general elections, scheduled to be held in October.

The government is a logistics and marketing partner, but not currently directly investing. That could change, however. “It’s the local tourist board, rather than national government for now, until we know who wins in October,” he added.

As well as at a state level, NomadX’s work can face other logistical challenges. Its project in Cape Verde, a series of islands off the west coast of Africa, struggled with airlift until a partnership was formed with TAP Air Portugal to bring down airfares. It also paired nomads with non-governmental organization to boost awareness.

However, its main mission is to work with hospitality and tourism companies already on the ground, including local guesthouses, hotels and Airbnbs. It collates the accommodation, employs community managers and connects its own digital nomad community with those local businesses.

The concept reflects Skift’s 2022 Megatrend: Communities Are No Longer Spectators in Travel.

“Tourism boards embracing a ‘locals first’ approach post-pandemic is here to stay, as is the imperative of having residents’ input on tourism management to ensure the industry’s future success,” Skift reported in 2021.

“The idea is when the government contract ends, you have all the space there. The government won’t give you money forever,” Hall said.

Central and South America are set to become hotspots for remote workers.

Speaking at Skift’s Future of Lodging Forum earlier this year, Sam Khazary, senior vice president of global corporate development at Panama-headquartered Selina, said the company was in the process of mapping out popular travel routes across the region.

French hotel group Accor, meanwhile, is seeing success in Brazil with its co-work space brand Wojo. Accor has 150 hotels that offer Wojo spaces located in South America, with about 100 in Brazil. There are also 40 participating properties in Peru, Argentina, Colombia and Chile.

Across the 150 hotels, one third offer private offices, and Accor said it was seeing an average of 10 to 20 clients each day in its co-working spaces, while several businesses have signed contracts to use private offices.

A spokesperson told Skift 50 more hotels in the region would begin offering Wojo by the end of 2022.

Sidenotes

The corporate travel industry should view WeWork’s latest set of results in a positive light.

The co-working space provider and platform highlighted ongoing growth in its flexible passes, which companies are increasingly offering to staff. The upshot is a potential boost in team and employee travel over the coming years, as permanent offices give way to ad-hoc meetings and gatherings in different locations.

As one of the largest operators of co-working spaces, it’s a sort of bellwether for future work and business travel trends. And in its second-quarter results, WeWork revealed that its All Access memberships grew to 62,000, which is an increase of 13 percent quarter-over-quarter.

This relatively new membership scheme offers a monthly pass to any WeWork location, and it makes about $180-190 million a year from them. However, its CEO sees this climbing to 100,000 passes — despite the current capacity cap of 75,000-80,000 passes.

“I’ve challenged the team to figure out ways to increase capacity, so we can take that to 100,000 or so members and we can increase revenue on All Access to over $300 million,” said Sandeep Mathrani during an earnings call Thursday. “So we’re very bullish on that product.”

Mathrani said one customer, Xerox, was now a fully remote company and had said its distributed workforce wanted workspace hubs set up across different cities in order for sales teams to come together, host events and meet with customers.

Another outdoor gear and apparel retail client recently snapped up 2,600 All Access passes to deliver “optionality” to employees while minimizing fixed costs.

However, one development that should be on the radar of travel agencies and travel tech firms is WeWork’s new Workplace platform, an all-in-one tool that helps companies manage their people, as well as spaces and assets. And those spaces include non-WeWork locations.

Workplace was built with real estate software firm Yardi, and only launched in July.

It’s designed to empower employees “to more purposefully engage with the spaces they choose and create more meaningful physical connections” according to the company. And there’s that word “purposeful” — a popular term today among the travel management community as the need to justify business trips intensifies.

WeWork aims to radically expand Workplace in the future. It has signed up 11 companies to the platform so far, providing them with 7,400 licenses, but has a pipeline of more than 100 companies, comprising 35,000 licenses.

Despite posting a net loss of $635 million, which was worse than its first-quarter $504 million loss, the hybrid work trend will probably help the brand cut some of those losses in its next quarter.

10-Second Corporate Travel Catch-Up

Who and what Skift has covered over the past week: Accor, Airbnb, Air France, Amadeus, HRS, IAG, IHG, JetBlue Airways, Marriott, Sabre, Southwest Airlines, Uber Travel, United Airlines, Yotel.

In Brief

Corp Travel Deals Pick Up Pace

It’s been a busy week for mergers and acquisitions in Europe. The UK’s Gray Dawes Group bought travel management company Ventur Travel, which was formerly known as Traveleads. The acquisition also sees Venture Travel’s specialist leisure division, Ventur Luxury, join the Gray Dawes family. Meanwhile, Israel’s Talma Shlomo travel group has acquired a 51 percent stake in corporate hotel booking platform Arbitrip. On Thursday, corporate hotel booking platform HRS said it had bought PayPense, as it pushes further into expense management. The deal is expected to close at the end of the month.

Business Travel Agency Atlas Claims First B Corp Rating

Atlas Travel & Technology Group claims it has become the first travel management company in the U.S. to achieve B Corporation certification. The accreditation measures a company’s social and environmental impact by redefining success through purposeful positive impacts for its stakeholders, including customers, employees, local and global communities and the environment.

“The rigorous certification process made us a better company, highlighting our superlatives and pointing out a few areas that needed more attention. Our priority has always been to do the right thing for our employees, community and the environment, knowing that a positive bottom line would result,” said CEO Elaine Osgood.

The agency joins 2,500 other B Corps in 160 industries around the world, and Atlas will share more about it at the Global Business Travel Association Convention, taking place in San Diego from Aug. 14-17.

Airbus Division Skytra Shakes Up Its Senior Leadership

Airfare and hedging platform Skytra has shaken up its management team, with new roles for its two co-founders. Elise Weber has become CEO, while Matthew Tringham is now managing director. They were previously chief sales and marketing officer, and chief strategy and product officer, respectively. Weber replaces Mark Howarth. Jeremy Norwood has meanwhile been appointed chief operating officer, and Lee Brown promoted to chief financial officer.

The company said the reshuffle was due to its pivot during the pandemic, where it moved its immediate focus to aviation related data and risk management products in response to market and customer demand, as well as “organic changes” due to family commitments and natural progression. “The changes are fundamentally centered on ensuring we are in the strongest position possible to service our customers,” a spokesperson said.

Airbus launched Skytra in 2019 because airline customers voiced concerns about buying its planes. After making such a large capital investment, there wasn’t really a way to protect themselves against drops in ticket prices.