Work vacations see a dip in demand in 2022, but the trend is here to stay

Representative image.

The trend of working from a beachfront resort, homestay in the hills, or even traveling between cities while working, often referred to as Workations, is seeing a dip in demand in 2022.

Workations combine work with vacation. Thanks to the buzz it has created, it is gaining popularity around the world.

Tourism-related businesses, countries and even companies are responding to the new trend with their existing offers.

But as companies start calling employees back to office, the global economic situation worsens, and inflation starts taking a toll, customers, even those with remote jobs, are becoming more conservative and spending less on travel, local travel agents, hotels, resorts online travel agents and online hotel booking companies told Moneycontrol.

However, despite a dip in popularity, most travel and tourism partners expect the trend to continue once the global economy recovers and travel gets back in vogue.

Demand for workation

"Though 2021 saw extremely strong demand for workations as a large number of offices were closed, but with the pandemic situation improving in 2022, there has been a 20-30 percent drop in demand compared to last year," Sarbendra Sarkar, Founder & MD, Cygnett Hotels & Resorts, told Moneycontrol.

Similarly, a senior official from ITC Hotels said that customers have got used to not using their PTO (paid-time-off) to take a vacation and are instead working remotely.

He added that most people are looking to preserve their paid leaves and are instead working out of remote locations or resorts in order to make the best of both worlds.

According to Federation of Associations in Indian Tourism & Hospitality (FAITH), the tourism industry in India witnessed a growth of around 80 percent in 2022, compared to 2019.

However, the growth from the homestays, hostels and private properties segment, was limited to only 20 percent, compared to 2019, indicating that the segment has seen a slowdown in growth since last year. In 2021, the homestays, hostels and private properties segment was the fastest-growing segment in tourism.

“The hospitality industry has witnessed about 125 percent growth, compared to pre-pandemic levels, and is all set to ring in Christmas and New Year festivities,” said Pradeep Shetty, Executive Committee Member, Federation of Hotel & Restaurant Associations of India (FHRAI).

He added that travellers have returned to hotels after turning to homestays and private properties for the last two years due to concerns surrounding COVID-19-related safety issues.

Workation was considered a great option when people had the alternative of working from home, but the scenario has changed, said Deven Parulekar, Founder, SaffronStays, a private vacation homes network.

"With the work-from-home (WFH) option, people could stay in locations like Alibaug or the hills in the north and work from there. However, the scenario has changed now with a number of organisations resuming working from office,” he added.

Similarly, a senior official from Pune-based travel agency which specialises in personalised trips and workations, WanderTrust, said that in 2021 his company was seeing all kinds of working professionals ― from businessmen, to stockbrokers, journalists, and techies ― while the demand in 2022 has been limited to just techies.

"Some of our regular customers who had stayed with us for months in 2021 have not returned in 2022 as their jobs are no longer remote," he added. He added that most businessmen and stockbrokers were no longer returning as their firms had re-opened.

"Homestays used to be the first choice for travellers when making plans in 2020 and 2021, but since COVID-19 cases have been on a decline, the demand for homestays has fallen significantly, especially in bigger towns," according to a senior official from Anarock Property Consultants.

"We were seeing property owners modify their farmhouses and homestays to accommodate travellers on workations. This trend has fallen and owners are no longer renting out properties on shorter leases of less than a year," he added.

However, despite the fall in demand and overall shrinkage of the industry in 2022, some travel operators have noted a contrarian trend ― they have seen growth in demand for their workation properties versus last year.

"We saw a significant surge in 2020-2021. We continue to witness a 20-30 percent rise in demand for workations compared to the previous year from young professionals and millennials as well as families with one or more members attending to their work. These workations range from a week to about 15 days on an average," said Rajeev Kale - President & Country Head, Holidays, MICE, Visa - Thomas Cook (India) Limited.

People can now live anywhere and work from anywhere, and this has been reflected in a rise in long-term stays on Airbnb, said Amanpreet Bajaj, General Manager, Airbnb – India, Southeast Asia, Hong Kong and Taiwan.

"Even with more companies requiring employees to return to office, nights booked on Airbnb in Q3 2022 for long-term stays remained stable from a year ago at 20 percent of total gross nights booked,” he said.

Daniel D’Souza, President & Country Head - Holidays, SOTC Travel, said they have seen a 1.5x growth versus last year in demand for workations and this is expected to increase in the coming year.

"In 2022, we observed around 10-15 percent YoY spike in booking enquiries for workations, and destinations such as Manali, Shimla, Kasauli, Ooty, Pondicherry and Goa emerged as travellers’ favourites,” said Aditya Gupta, Senior Vice President, Hotels and Holidays, Yatra.com.