Article by Greg Lindsay
CityLab  |  April 25, 2023

The Line Is Blurring Between Remote Workers and Tourists

Economic development has fundamentally changed. Cities that figure out how to make visitors’ and residents’ lives easier are going to have a major competitive advantage.

By Lev Kushner and Greg Lindsay

For years, cities, states and regions have been competing to lure corporate headquarters and offices, an arms race of ever-higher tax breaks and infrastructure projects cobbled together to benefit corporate executives and their shareholders. The spectacle of hundreds of American communities bidding against each other for Amazon’s now-paused HQ2 was both the pinnacle and nadir of this genre. But the remote revolution is upending this traditional model of economic development. The last two years of pandemic have accelerated previous trends, shining a spotlight on an alternative to the corporate sweepstakes, one in which cities chase the workers themselves.

With many Americans newly willing to relocate and remote work vastly expanding the playing field of potential locations, smaller cities and regions need to be ready to capture their share of this windfall of migratory talent. While some of tomorrow’s destinations patiently wait for their turn in the sun, others have resorted to gimmicks — such as a $10,000 bonus, or $10,000 and a mountain bicycle, or $10,000 in Bitcoin — with less-than-stellar results.

Even the original and most successful of these programs, Tulsa Remote, has settled only 2,000 new arrivals since 2018, or roughly 0.2% of metro Tulsa’s population. That shouldn’t be surprising; these are relatively small-budget affairs. Many of these pandemic-era programs launched by cities ranging from Savannah to Helsinki used little more than mothballed travel budgets to seed their fledgling efforts. And even more mature efforts such as those in Tulsa or Northwest Arkansas (Bentonville and Fayetteville) still rely on philanthropic rather than public funding. Approaches such as these are forward-thinking but not scalable.

Simultaneously, and in parallel, tourism departments are struggling to respond to a changing world of tourism. While tourism agencies’ historic target audience has been three-day weekend visitors, remote work and the rise of digital nomads means that stays are increasingly in the 30-day range. According to Deloitte’s 2023 Travel Outlook, travelers willing to bring work with them take twice as many trips and, of those “laptop luggers,” more than a third are adding three or more days to their vacation to accommodate working remotely while traveling. Airbnb reported in May 2022 that long-term stays of more than 28 days were their fastest-growing category by trip length compared to 2019, more than doubling in size from Q1 2019. And United Airlines CEO Scott Kirby has declared a “permanent structural change” in the industry as business and leisure travel have become indistinguishable.

These two developments — a growing, restless class of remote workers, and a tourism market of people who spend more of their time traveling — are more than related; they’re different facets of the same phenomenon. The line between remote workers and tourists is blurring, and communities big and small need to think strategically about how to position themselves to take advantage of this changing landscape.

The New Talent Attraction Landscape
When cities try to lure or retain companies, they play a B2B game. When they adjust their strategy to try and court a highly mobile class of talented workers, the model shifts to B2C. And that transformation requires a change both in how city agencies are structured and in their culture.

The simplest transformation would be combining economic development and tourism offices into something customer- and resident-focused. Call it the Department of Hospitality. Ohio is already inching in this direction, with a proposal to rename TourismOhio as the State Marketing Office and expand its mission to attract residents, students and workers — in addition to tourists.

Whether it’s renaming agencies or merging them, the transformation entails a new way of doing business. Any new department would shift from the high-upside, low-volume business of luring corporate headquarters to the low-margin, high-volume approach of direct sales. This may entail shifts to the make-up of staff, messaging and strategy. And it will mean broadening the customer-facing programs to transform first-time buyers (visitors) into loyal customers (residents).

Whether this entails connecting newcomers with reliable Wi-Fi and work spaces, familiarizing short-term tourists with housing options and family amenities, or merely keeping track of and welcoming new transplants to help them assimilate and feel supported over time, the work is critical. In a world where there are now hundreds of competing cities chasing the same residents/customers, the cities that figure out how to make their visitors’ and residents’ lives easier are going to have a massive competitive advantage.

To achieve this, cities will have to train their employees for a new era of increasingly important customer service. This would be a sea change for the vast majority of cities, and culture change at municipal agencies is notoriously difficult.

Whether these new offerings are gathered under the umbrella of merged economic development and tourism agencies or, less effectively but more feasibly, a well-choreographed coordination between the two as standalone agencies, this culture change will have to infuse their programs, combining economic development agencies’ ability to expedite city processes and tourism departments’ expertise in marketing.

This effort will require employees of a sort not normally associated with the public sector: people who act as point-of-contact assistance for new and recent arrivals. Imagine one part hotel concierge, one part HR onboarding expert, and one part university student life expert who has experience welcoming and orienting a constant wave of new residents.

A smattering of examples exist in the field.

Evan Hock launched MakeMyMove as a one-stop shop for Indiana communities, but today his site boasts more than 150 destinations across the US. One is Greater Lafayette, Indiana, which offers arrivals a $10,000 incentives package, including relocation costs and work space on campus at Purdue University — the first partnership of its kind. “A lot of what we’re doing now is helping communities set up this kind of infrastructure and then obtain funding to keep it going,” Hock says. To that end, Indiana’s legislature amended the state’s tax credit toolkit last year authorizing municipalities to use government funds on these kinds of programs.

A few states away, the Greater Topeka Partnership has lured 99 workers from over 25 states to date with its own $10,000 incentives program. But the small program has contended with the challenges of connecting participants to the right amenities, according to Bob Ross, the partnership’s senior vice president of marketing and communications. One participant dropped out due to a lack of coworking spaces; another ended up in a broadband dead zone and had to relocate — unforced errors that might have been avoided by a more comprehensive citywide strategy. “We’ve ended up doing a lot of that lift ourselves, which is probably a little beyond our bandwidth,” Ross says. “Cities are going to have to find ways to answer those questions more efficiently.”

Incremental Change
For most city agencies, change will come slowly. A more practical question may then be, what do incremental steps look like and how can they be achieved?

Cassandra Costello, executive vice president and chief policy and external affairs officer at the San Francisco Travel Association, has operated in this interstitial space for years. Her position was designed specifically to liaise between economic development and tourism — a rarity in the industry — but it provides her a wide-angle view on how the changing landscape affects the day-to-day operation of government.

Pre-pandemic, tourism was solidly San Francisco’s number one industry, growing for ten straight years and drawing nearly 26 million visitors who spent over $10 billion annually. After Covid brought this growth to an immediate halt, “tourism was no longer taken for granted, but instead, proved to be an industry that you had to work for to be able to compete on a global scale for visitation,” says Costello.

This challenging environment puts it on par with other corporate attraction efforts. And with Costello’s perch on committees within the planning, parks, and economic development agencies, she is increasingly able to give a voice to tourists within the city’s economic development machinery. Having someone from SF Travel add their voice to land use and economic development issues gives more context to complex political decisions, often bringing a broader, even global perspective to issues that can feel hyper-local.

Costello’s work shows that, as the line between short-stay tourists and residents blurs, improved resident amenities are going to be even more important to economic development than they were in the past — to the benefit of both new residents and old. “What is good for the visitor is great for the employee, resident and for business attraction,” she says. “Tourism can also help to bring people to downtown core areas seeing less foot traffic due to work from home policies.”

As an economic development strategy, talent attraction is not going away. And neither, clearly, is remote work. Small and midsize American cities, traditionally muscled out of the business attraction game, have been quick to seize on this transformation. Larger cities, even the heavyweights with legacy business clusters and resilient brands, are slowly pivoting their attention to this new way of doing business. A more consumer-oriented approach will improve the quality of service for all residents, regardless of how often they move, by making them feel more taken care of and more welcome. What’s good for the guest is good for the host, especially when the guest might never leave.

Lev Kushner is the founder of Department of Here, a strategic communications and economic development consultancy.

Greg Lindsay is an urban tech fellow at the Jacobs Urban Tech Hub at Cornell Tech.

About Greg Lindsay

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Greg Lindsay is a generalist, urbanist, futurist, and speaker. He is a non-resident senior fellow of the Arizona State University Threatcasting Lab, a non-resident senior fellow of MIT’s Future Urban Collectives Lab, and a non-resident senior fellow of the Atlantic Council’s Scowcroft Strategy Initiative. He was the founding chief communications officer of Climate Alpha and remains a senior advisor. Previously, he was an urban tech fellow at Cornell Tech’s Jacobs Institute, where he explored the implications of AI and augmented reality at urban scale.

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