Last year, digital nomad Hayley Knight travelled to Lisbon to spend a month in the city — but when she arrived, her AirBnb booking was cancelled out of the blue, leaving her to find accommodation elsewhere.
“The cheapest thing we could find was about €3,000-5,000 for a month, which was just completely out of our budget,” says Knight, who has travelled to Lisbon several times in the last few years.
“Accommodation last year was much more expensive than previous years, and you can’t book Lisbon last minute anymore… as it’s too expensive,” she says. “I went again this year for a week, and even booking in advance the only accommodation I could afford was a dormitory bed in a hostel, and even that was expensive for what it was.”
The Portuguese capital — with its beautiful streets, year-round sunshine and cosmopolitan vibe — has received record tourism in recent years and frequently tops leaderboards as the world’s top digital nomad destination.
But rising prices, a lack of available housing and backlash from locals weary of remote workers is leading many digital nomads to go elsewhere.
According to data from Nomad List, which tracks numbers of remote workers based on trips booked on its platform, Lisbon’s visitor numbers peaked in October 2021 — as lockdowns eased across Europe —with an estimated 20.8k people arriving per month. In May this year, there were an estimated 3,000 new arrivals; an 86% decline.
Anti-digital nomad sentiment grows
Portugal has lured wealthy foreigners with its Golden Visa programme, digital nomad visa and other tax advantages, but souring attitudes towards tourists and remote workers have caused the government to U-turn on some of its policies.
The Golden Visa programme, which started in 2017, allowed foreigners to move to Portugal if they bought real estate, giving many people a fast-track ticket to EU residency — but this aspect of the programme was scrapped as of October 2023.
Also, the non-habitual tax residency (NHR) — which allowed individuals to have a flat income tax rate of 20% on most types of income earned in Portugal and was a pull for digital nomads — came to an end in January 2024. Some consider this to be a particularly bad move.
“Portugal was attracting some of the brightest minds in the world with the NHR. Ending this talent attraction tool was the biggest mistake our previous government did,” Gonçalo Hall, CEO of NomadX, which created the world’s first digital nomad village in Madeira, wrote on LinkedIn last week.
Portugal isn’t the only EU country to try to curb an influx of foreign visitors. Spain has also cracked down this year, abolishing golden visas for those who invest in real estate; last week, the mayor of Barcelona — which is also creaking under the weight of high numbers of visitors — announced a citywide ban on short-term rentals by 2029. (Both Portugal and Spain’s digital nomad visas are still available.)
In Lisbon, a lot of the “hate” for digital nomads comes as a result of Portuguese people feeling “pushed out” of the rental market and unable to pay prices for apartments, restaurant meals and other services that are “adjusted for tourists,” says Anna Maria Kochanska, founder of The Remote Impact, a remote work consultant helping the Spanish government attract and manage digital nomads.
Santa Maria — a district in Lisbon’s historic quarter with cobblestone streets and washing draped from the windows — is now filled with tourist shops, luxury hotels and tuk tuks, she says, and small shops run by locals have “disappeared”.
“When I lived in Lisbon in 2017, there wasn’t this negative feeling towards nomads that there is now,” says Kochanska. “On the walls, people have written, ‘digital nomads, go home.”
Nomads make up a smaller proportion of residents in Lisbon, so they’re not solely to blame for rising prices and the poor state of the housing market, adds Kochanska. Lisbon’s population is an estimated 505k people. In 2023, 16k nomads were living in Lisbon, according to Nomad List data, and 6.5m tourists visited the coastal city over the course of the year.
“Nomads are not expats, neither traditional tourists, but most local people don’t understand the difference and put everybody in the same box as foreigners,” she says. “But what is an impact of 16k compared to… 6.5m tourists?”
Portugal: still a hot destination?
As Lisbon’s popularity among digital nomads wanes, other destinations in Europe are on the rise — from Valencia and the Canary Islands to Albania, Bulgaria and Montenegro, which are keen to attract remote workers and offer digital nomad visas.
The equation is simple, says Kochanska. If accommodation is cheaper in those places and the welcome is warmer, you’d choose to go there instead.
“If the world is open and you have countries literally asking you to come to their country, you’d go, right?”, she says.
Others aren’t so ready to write off Lisbon — or Portugal.
Short to mid-term rental platform Flatio — which is active in 300 destinations globally, but predominantly in Europe — says that reservations in Lisbon by digital nomads on its platform are up 50% per year; reservations for Portugal broadly are up 37.92%.
And while Flatio acknowledges that rental costs and house prices — the latter of which increased by 10% in 2023 — are “generally going up in Portugal”, it’s noticed that rental prices on its platform have decreased over the last year.
The average monthly rental price for a one-bedroom apartment in Lisbon on its platform has reduced 16.5% from €1,556 to €1,299 in the last 12 months; the average price for a two-bedroom apartment has reduced from €1,900 to €1,600 per month.
“This would indicate that housing providers, landlords and hosts are beginning to adjust to changes in the market, which will hopefully have a positive impact on housing in the long run,” says Henrique Santana, head of housing and growth at Flatio.
A long-term solution?
Many remote work experts tend to argue that digital nomads can be good for local economies — especially those suffering from depopulation — if they are managed well. Digital nomads typically stay longer than tourists, providing a longer term income source for local businesses.
The problem Lisbon, like Bali, has now is really difficult to solve
To manage nomads effectively, governments need to prepare in advance for them to come, rather than acting when they start to arrive in droves, says Kochanska.
“The problem Lisbon, like Bali, has now is really difficult to solve,” she says.
One solution is to create and promote several digital nomad destinations in a country to remove some of the pressure from major metropolises. Organisations like NomadX are building digital nomad communities outside of Lisbon, in places like Peniche, Caparica and Porto.
Governments can lean in to build the necessary infrastructure to support nomads, be it coworking spaces or extra accommodation. They also need to think of ways to integrate nomads into the local community.
“To launch projects in rural destinations, you need budget,” says Kochanska, who is setting up a nomad project in a coastal town an hour from Barcelona, subject to approval. “So the way local governments can support is to collaborate with nomad leaders, organise events… invite guests for free so they can promote the destination.
“It helps spread the idea that we don’t need to have everyone in one place.”
There are signs that this is already starting to happen. Some regions in Portugal, like Caparica — a 30 minute drive from Lisbon — are seeing rising numbers of nomads who want a more relaxed lifestyle, while still remaining close to the city, says Kochanska. Digital nomad projects have also popped up in Sardinia and in rural regions in Italy.
The future of Lisbon
For nomads still living in Lisbon, the city is a melting pot of “doers and creators,” as Inja Schneider, who set up her business Impactribe in Lisbon last year, puts it — made better by the ocean views and easygoing lifestyle. But many are concerned about the effect the influx of visitors is having on Portuguese residents.
Lisbon locals tell Sifted they haven’t yet noticed a drop in nomad visitors.
“The city still feels as busy as it was before,” says Tiago Rodrigues Jorge, cofounder of Mila cafe in Lisbon. He adds that the housing situation remains “out of control” and the city’s rising cost of living is incompatible with one of the lowest minimum wage rates in Western Europe.
“Not many (locals) can afford to live in Lisbon right now. So those who can, they have to share or they have to lower their expectations in terms of what type of accommodation they can get,” he says.
“I don’t know what will become of Lisbon,” he adds. “I always worry we will become the next Venice or Barcelona. It all still feels a bit unregulated right now.”
Read the orginal article: https://sifted.eu/articles/digital-nomad-dream-lisbon/
