It was May 2020, a time when Mallorca and Spain were passing through their phases of coronavirus de-escalation. Remember those phases? All in the past, but it was a past that started to make people think - especially those with tourism thoughts. Devastation by pandemic, and so innovative solutions were required not just in the short term but in the longer. Remember what was being said? Tourism would never be same again.
Hotel owners stopped for a moment and thought that this might be so, but not so seriously that they bit at the legislative wherewithal offered by the Balearic government under its emergency economic measures (passed in May 2020). Hotel conversion into residential accommodation, and there was not a single taker. On the face of it a decent proposal, the pandemic not only didn’t change tourism, it also failed to provide benefit to islands in the midst of a different crisis - that of housing. For a while, it’s true that this crisis was alleviated to a degree. People weren’t travelling in number; not tourist nor seasonal worker. But because tourism didn’t change, the crisis just returned stronger.
From the strictness of lockdowns came a “great discovery”. Thus said Martin Varsavsky, a serial telecommunications entrepreneur who, among other things, had founded Jazztel in 1998. The great discovery was teleworking, which represented “a huge opportunity for Spain to grow its economy”. This was allied to the phenomenon of the digital nomad, someone who moves around, typically spending only a few months in one location.
I quoted Varsavsky in an article at the time. It was, I think, the first real consideration given to digital nomads in the Bulletin, partly because of proposals that were being made by the former president of the Balearics, José Ramón Bauzá, and because of a strategy that was being outlined in the Canaries.
Bauzá wanted the Spanish government to introduce an incentive plan to encourage companies and teleworkers to establish permanent or second residence in Spain so that the country could benefit from what he called a new form of tourism. This has subsequently morphed into the nomad visa and a different beast of ‘tourism’ - up to five years isn’t exactly nomadic. In the Canaries, the tourism minister, Yaiza Castilla, was working on a promotional strategy for this new-type of “long-stay client”, a long stay of months, not years.
Castilla has been successful. Gran Canaria and Fuerteventura were, as of October last year, in the top 25 digital nomad destinations in the world (according to the Nomad List); 5,000 teleworkers were now arriving per month in the Canaries.
What Bauzá and Castilla were saying sounded interesting and like a potentially good idea. It was reminiscent to my reaction to Airbnb in the early days. Before, that is, there was time to fully digest and appreciate what this good idea might actually lead to.
In October last year, the digital newspaper Público published an article headlined (in translation) ‘The Canaries: Paradise of poverty, digital nomads and housing problems’. That article stated that the Canaries tourism ministry was celebrating having met a 5,000 teleworker per month target “as an achievement, while access to housing for residents becomes impossible”. “Low wages (the average is slightly lower than in the Balearics), high poverty rates and exorbitant prices. This is the x-ray of access to housing in paradise.”
Teleworkers aren’t the sole reason for this, of course not, but they are exacerbating a situation in paradise islands in the Atlantic. So, what of a Canaries experience for paradise in the Med? In Inca last weekend, a forum for tourist rental was held, an aspect of which was the digital nomad. The company Palma Coliving outlined its experiences with a property in the Son Armadans district. It has eleven bedrooms, nine bathrooms and a pool. It is being rented out to nomads. The company says that it has a waiting list of people who want to come to Mallorca.
This property is quite obviously something a bit special. It doesn’t really have much to do with the general housing problem, but what about other properties? The company explains that people stay for a minimum of one month - they usually come for two to three months. “They are professionals, not tourists who come to drink.” And in one way, defined by length of stay, they aren’t tourists. Any letting of less than one month is automatically deemed to be touristic and therefore subject to Balearic government holiday rental regulations; more than a month, and it is not.
The Armadans property strikes me as a reasonable model for a digital nomad influx. A property dedicated to a particular niche and need that doesn’t impact the wider housing situation. Also borrowing from experience during the pandemic and when hotels started to make a bid for teleworkers, there are establishments which could, with some remodelling and the right promotion, conceivably become nomad centres. Otherwise, there has to be a fear that individual apartments, say, are offered as nomad residences and that their number just grows and grows.
Digital nomads and indeed the nomad visa are being presented in certain quarters as some sort of panacea when they do raise legitimate worries. In the Canaries, they are already confronting them.
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I am struggling to see what benefit such people bring to the economy. They pay no taxes locally, but occupy scarce rental accommodation that is already in chronic short supply - surely this version of tourism just drives the cost of renting even higher. We have had so much noise lately about non-resident homeowners, but frankly this seems just as bad - so why are the Spanish government promoting this nomad concept??? At least second homeowners spend significant money locally refurbishing and improving their properties and employing local people to look after their properties whilst unattended.
I would dearly like to know how this nomadic lifestyle is a benefit. It competes for services and drives up prices by introducing unconnected but well paid consumers. I've 1st hand experience of a US 'employed' worker (withholding tax deducted from salary in the US), a national a 3rd country (tax difference paid by reciprocal agreement there, and with off-shore health insurance) living for under 3 months in Spain (so no tax paid here). Meanwhile they are enjoying the environment and infrastructure paid for from the salaries of the low paid waiters and staff of the bars, restaurants, sports facilities, public transport and shops they frequent, driving up the price for locals via their purchasing power.