The coronavirus pandemic is expected to lead to a 10x increase in digital nomads in the next two to three years and Portugal seems to have maintained its appeal for location-independent professionals, says an industry expert.
“We’re expecting like a really big influx, but it’s not happening quite yet,” David Nicol Williams, co-founder, chairman, and CEO of NomadX, told Via News in a recent interview.
NomadX is a month-to-month rental platform with a mission to revolutionize the way digital nomads live, work, and travel.
Here are excerpts of the interview in which Dave talks about the future of digital nomadism, the latest features added to their platform, and life in Portugal.
Q: We are now a few months into the COVID-19 pandemic. What’s your take on the digital nomad industry today?
It’s been a crazy last few months. As you know, everything’s slowed down quite a bit on the travel front, which has obviously had a big impact on the industry, and it seems that things are starting to open back up.
Over the last few months mostly it’s the nomads that were already here that are kind of staying in our apartments so they’re moving to other apartments or kind of moving around the country. But we are starting to see a lot of interest from digital nomads moving to the city and actually spending more time once they get here, whereas before COVID-19 we would rent properties for generally like two to three months on average.
Now we’re seeing the average rental period going up to four to five months. So we’re seeing longer rental periods and more local travel. Given the people’s concerns about traveling, I think a lot of people are really looking to travel within their home countries or by car within reasonable distances.
But to the extent nomads will be traveling for extended periods, we are seeing a lot of interest in Portugal given that it’s been very safe here.
Q: What does it mean for the travel industry and the overall economy?
It’s very critical right now for the economy here in Portugal. I think they quoted a rate that was about 15% of the GDP comes from travel so obviously, that’s taken a big hit on the economy.
So by opening things up with the biggest travel months being July, August, and September, I think it creates a lot of opportunities to try and rebuild the economy.
Obviously, it won’t be nearly what it’s been in the past, but I think it’s a nice opportunity to try and get the economy back on track.
We still expect there to be a second wave because a lot of people are planning to come to Portugal from countries like Brazil, the United States, and the countries that have been infected with the virus more so than others. We hope that’s not going to create issues, but we sort of anticipate a second wave later in the year.
With that said, we also just recently heard that Web Summit is planned to be held here again this year in November so that’s exciting. It’s an opportunity to bring momentum into the startup industry once again here in Portugal.
It probably won’t be as big as before. Probably there will be a lot more restrictions, but we think that’s a big move just to keep the momentum here in Portugal and also to keep the startups going and obviously keeping the investor interest in what’s going on here in the country.
It’s exciting to see the opportunity with events like Web Summit coming back. I was just speaking to one of the leaders of the Lisbon digital nomad community. They’ve started opening up events too. So you’re going to start to see more events happening here in the city.
We’re going to start re-engaging with our community pretty soon, but we’ve been a little bit slow. We didn’t want to push things ahead too quickly because we are still concerned about the pandemic.
Q: In your opinion, what’s the general sentiment of people living in Portugal?
From what we’ve seen, the response has been really good. So we feel that the Portuguese have reacted quickly. We’ve seen everyone’s done a very good job at social distancing, wearing their masks, and getting the rates of infection down a lot.
We see a really positive outlook from the Portuguese. It seems that the Portuguese work well in a crisis. We feel very lucky that we’re here in Portugal at the moment and that the business is based here.
We feel like we’ve got a great foundation, a great country, and a great culture of people that are very accepting of people coming into the country.
But with that said, I think there’s a lot of anxiety at the moment because the country’s done so well in terms of fighting the pandemic that there is concern that by opening the borders up this is going to bring a lot more cases into the country, which I think it probably will. We’re not out of the dark yet, but we’re getting there.
Q: How do you think the coronavirus will change the relationship between talent and location? Do you expect workers to become less location-dependent?
We’re definitely seeing that as a huge part of this. We’ve heard estimates coming out of Silicon Valley and a lot of my friends there think there will be a massive new movement of people that are now remote workers becoming more nomadic.
For the next two to three years, we’re going to see about a 10x increase in digital nomads. We’re expecting like a really big influx, but it’s not happening quite yet. We’re in that part of the industry where we’re still in the early adopter stage.
But as workers have been forced to work remote and now they say they can kind of work from anywhere, that really works to our advantage and we’re seeing a lot of people that want to spend time in Portugal, move to Portugal, work from here as digital nomads, and even migrate within the country itself.
So whereas a lot of people want to go to Lisbon and Porto, which has always been the case, we’re seeing a lot of interest right now in the Algarve and also Ericeira, for example.
So these areas are a little bit more remote to the city but still close to major airports like Lisbon, Porto, and Faro.
Q: Can you tell us about the current status of NomadX, especially in terms of funding and expansion plans?
Some startups got funded before the pandemic hit. So they’re in very good shape. We were a little bit late in our funding. We were supposed to get started at the beginning of the year, but the funding ended up getting pushed back till April, and obviously that timing wasn’t very good.
We were going to do a crowdfunding campaign, but we didn’t feel like it was the right time to reach out to our community of hosts and guests and our broader community to invest in the company. So our investment is actually on hold at the moment and we push that process quite later this year, if not into next year.
A lot of it will depend on the results that we’re seeing at the moment. So we want to still be able to demonstrate that we’re able to generate revenue, ideally get to a stage of profitability, start showing some more growth in the business and start showing some healthier metrics to be able to share with investors and ideally be able to fetch a higher evaluation.
I think a lot of the companies that are still trying to raise money at the moment are suffering from their valuations taken down maybe by half or more. So it’s not the greatest time to be out trying to raise money, especially from professional investors and especially in the travel sector.
We’re hearing from a lot of the more sophisticated investors, more the venture capitalists and even the angels, that they have put things on hold for the next three to six months where it relates to the travel sector.
But I still think they are making investments in areas where there are opportunities with businesses that have demonstrated a lot of success previously or in new areas they’re kind of emerging as a result of the pandemic.
So things are a little bit tough for us at the moment. We’ve had to go into what we’re calling kind of slow mode, which isn’t a complete hibernation. We’re keeping our operational resources in place. Our technology resources are focused on finishing some critical tasks this month and then we’re going to be going into more of a maintenance mode.
We had planned to do some expansion to Bali, Spain, the UK, and Germany over the next couple of months, but we put the expansion plans on hold. So, at the moment, we’re just really focusing here on Portugal.
We’ve been able to add a lot of new listings. We have now over 2,000 listings on the platform. We finished off almost all of our features. We can now pay hosts directly. We have a lot of new features that the hosts and guests have been asking for.
It’s a pretty exciting time for us, but it’s also nerve-wracking because we didn’t get the funding that we were expecting.
So we’re really forcing the business into what is called “ramen profitable” and what that means is forcing the business to kind of survive on its own in terms of revenue and profits and having more of a bootstrapping kind of mentality.
I feel like for the companies that will survive that’s the approach that they’re taking. We are seeing some companies that haven’t slowed down enough so we’re going to see is a lot of startups running out of cash and going under.
For us, we’re making sure we have a minimum of 12 to 24 months of cash on hand for the business so we don’t have any issues like that.
But the industry is definitely at a stage where we’re still early in the pandemic and we’ve yet to see the results of all the fallout from the loss of jobs.
So for us, the adjustments are pretty easy because almost all of our people are contractors. We’ve been able to reduce their hours effectively, which gives us the ability to easily scale up and scale down resources as we need. So as we start to see things picking up or we get investment, we can scale back up very quickly.
Q: Could you please tell us more about the new features that you are adding to your platform?
We’re mostly just kind of finishing off things that the hosts have been requesting like calendar syncs. Half of our hosts have listings on other third-party platforms like Airbnb and Booking.com and possibly others like Uniplaces or Spotahome. We’re making it very easy for them to sync calendars. That was a missing feature.
We’ve also implemented what’s called Stripe Connect, which is essentially a third-party payment system for marketplaces. It’s one of the leaders in the industry. We’re getting all the hosts on board.
We have a couple few big partners that we’re adding. That’s gonna be very strategic for us as we head into the rest of the summer.
Q: How is NomadX promoting Portugal as an ideal destination for digital nomads?
I think Portugal should have me on retainer because I’m such a big advocate of the country. We run a very big global Facebook group for NomadX. My business partner Oli Nold runs the group. We’re seeing just huge engagement in the group at the moment, and the group is growing extremely fast.
I think we’ve almost doubled in size in the last three or four months. So that’s really exciting. In the group, we’re seeing a lot of interest in Portugal so one of our main objectives with the group is not only to educate and offer value but also to use it to attract more and more people to Portugal.
We have a VIP list we’re creating from our NomadX group that Oli is maintaining, and we’re coming up with an amazing promotion for people that want to come to Portugal through NomadX.
So we’re using that as a global channel to funnel people here to Portugal and then, as we expand, obviously we’ll be funneling them to these other locations as well.
We were using a really heavy social influencer strategy using our own assets and resources. To date we don’t have any active media running so we cut back on all advertising but even with the advertising cut back, we’re still seeing a lot of demand and a lot of searches and a lot of requests on the platform.
For the month of May, we did €940,000 in new booking requests. Year-to-date, we have 4.3 million in booking requests and that’s without any advertising.
The next step for us is to start launching a more aggressive advertising campaign. The majority of our traffic at the moment is coming from social sites so we’re getting a lot of referrals from Facebook groups, Facebook pages, Instagram, and few other social networks. But we want to start driving more engagement, especially across search and more acquisition-based strategies.
Q: Would you please tell us about your partnership agreement with Selina and what it means for both companies?
We’re actually in the early stages. We’ve signed a partnership with them, but we’re not in this situation to actually announce the partnership officially yet. But we are very excited. We think they’re an amazing brand. We complement each other really really well.
Then we have some other partnerships we’re working on too. People who are interested in coming to Portugal and have any tax questions, visa questions, or residency questions, we have some partners that will help out with that stuff as well as partnerships with co-working spaces and other sorts of strategic alliances we have here locally within Portugal.