Digital Nomads and Expats: Influencing Housing and Hospitality in Latin America

Introduction

In 2024 there were an estimated 35 million people globally who identified as a digital nomad, with an estimated spending power of over $700 billion USD annually. In terms of nationality, US, Canada, UK, and Germany account for 63% of digital nomads. Latin America has emerged as an expatriate (expat) and digital nomad “hub” for people from the Global North, with relocators and remote workers attracted to the sense of adventure, cultural experience, affordable living, and better quality of life relative to Western regions.

This has resulted in a growing demand for different housing and hospitality services in the region, presenting opportunities for brands to adapt and capture new niches. While this has resulted in boosts to local economies, when the growth influx is too rapid (combined with overtourism), it can result in housing shortages and skyrocketing living costs that push out locals. This highlights a challenge for brands (and local communities) to navigate carefully.

Digital Nomads and Expats

With the rise of remote working, the term “digital nomad” has become a common phrase in Western vocabulary. Collins Dictionary defines it as “A person who uses digital technology to work remotely while regularly travelling to different places.” This is a different spin on the expat experience, defined as “a person who is living in a country which is not their own” - but both are living and spending money abroad for extended periods of time.

Several Latin American countries now offer Digital Nomad Visas, such as Mexico, Argentina, Colombia, Costa Rica, and Brazil. With most of these visas valid for a 6 or 12 month stay, with ability to renew, there is a growing number of people relocating to Latin America for mid to longer-term stays.

While tourism is obviously another major injection of foreign money in a location, it’s reported that in some Latin American locations, a digital nomad will typically spend twice the amount as a tourist per month. Additionally, the impact of longer-term expat and digital nomad presence has a more nuanced influence on community dynamic and longer-term services available.

Why is this relevant? The expatriate communities in Latin America, combined with a growing number of digital nomads, are typically digitally-savvy, relatively affluent consumer groups, eager to develop community and experience the location as a resident. This has created an influential (and attractive) consumer group for local and international brands in these locations. We’ll take a deeper look at housing and hospitality trends and implications.

Housing, Hospitality, and Lifestyle Offering Opportunities 

With digital nomads and modern-day expats has come a demand for longer-term housing, co-living, and hybrid workspaces, changing the dynamic of the accommodation, lifestyle services, and hospitality industries in the region. Long-term rentals are up across major cities, for example- more than half of Mexico’s Airbnbs are booked for 30+ night stays, over 60% in Medellin, and over 40% in Lima. Beyond traditional accommodation, a new category has emerged for a flexible, communal living experience.

Examples of brands catering for the growing need include Socialtel (formerly Selina) has 29 locations across Central and South America, offering community and facilities beyond a traditional hotel – some including co-working spaces, movie rooms, daily events and workshops, and even community dinners.

Another co-living brand, Outsite, offers similar facilities and community at 41 locations across the globe – including many in Latin America. When it comes to hospitality, digital nomads and expats have been identified as the driving force behind the opening of boutique cafes, bars, and “wellness hubs”. An example of this is Gringo Cafe in Rio de Janeiro, which is tailored for nomads as a workspace + cafe hybrid.

While not all are so explicitly named, there are many other cafes across Latin American countries that cater for Western tastes, and the need for free, high-speed WiFi. Medellin is another city with high-end dining, art, fashion, and housing, catering for expat and nomad consumers. High-end fashion brand Andrés Pajón is an example of a local brand appealing to the luxury aspirations of the international consumer in Medellin.

Challenges and Ethics to Consider

The flip side to this growth and economic influx of expats and nomads (in combination with tourism) is of course rent inflation for locals, and pressure upon local housing. Not to mention, gentrification. Rents in the most popular nomad and expat hubs - Mexico City, Medellin, Costa Rica, and Brazil - have all seen rent increases that outpace inflation. Rents in Mexico City are reported to have risen by over 50% since October 2021.

Earlier this month, an anti-gentrification protest in Mexico City highlighted local frustration with housing availability and affordability becoming untenable for locals, who can’t compete with expat and digital nomad dollars. Mexico City Mayor has since announced a plan to manage gentrification in the city, including regulations restricting rent increases. It begs the question, though - how to find that balance between economic growth, brand opportunity, and losing the authenticity and soul of a location. Creating meaningful experiences between nomads, expats, and locals will be important, as will establishing regulations and/or protections to ensure local residents can afford housing and services.

Conclusion

Digital nomads and expats are a growing consumer group, increasingly with the demand and buying-power to change the local economies and dynamics of their chosen destinations. Latin America is one of the most popular regions for this group, resulting in changing housing and hospitality offerings in these communities - presenting both opportunities and challenges for brands.