Somi Kang Associate Research Fellow, Yanolja Research / [email protected]
A 2020 survey in South Korea found that 69.2% of respondents reported changes in their workplace attitudes after COVID-19, with the most significant change being "Work-Life Balance is more important than economic compensation.". This is one example that demonstrates how work-life balance has become a core value for modern individuals.
However, the concept of work-life balance is now seen as outdated. Instead, new terms such as work-life integration, or work-life blending, have started to capture public attention. Work-life balance focuses on creating a clear separation between work and personal life, while work-life integration/blending allows for a more flexible and fluid blurring of the boundaries between the two. The COVID-19 pandemic has accelerated new trend, as more and more people have been able to work remotely and have more control over their work hours and location.
One way to achieve work-life integration/blending is through the rising trend of workation, which allows individuals to perform work tasks while enjoying their vacation in a different location. The term ‘workation’ is a combination of the words ‘work’ and ‘vacation’, and it was first used by VanessaVan Edwards, an author and researcher at the Science of People, in 2013 to describe her own lifestyle.
Although the term became more familiar due to the COVID-19 pandemic,it is not solely a term coined during the pandemic. Rather,the prevailing view is that workcation is the popularization of the concept of ‘Digital Nomad’3, which appeared in the late 1990s. Starting in the 2010s, as IT companies experienced rapid growth, particularly in Silicon Valley, the competition to attract talented developers became intense. As a result, IT companies began to introduce remote work policies as a way to attract top talent. Within this context, workcation, which is a more passive form of digital nomadism, started to spread. In Western countries, the term digital nomad, considered the precursor to workation, is more frequently used. This can be observed by comparing the global interest in both terms using Google Trends, which shows that the interest in digital nomadism is approximately 5.6 times higher compared to workation.
The concept of workation emerged in the early 2010s, but it is undeniable that the spread of workation was greatly influenced by the COVID-19 pandemic. Prior to COVID-19, workation opportunities were limited to certain professions such as developers, freelancers, writers, and a few countries that introduced flexible work environments. However, the COVID-19 pandemic forced many businesses to adopt remote work, which led to a significant increase in the number of people who could work from anywhere. As a result, global interest in workation has rapidly increased since the mid-2020s.
This phenomenon was also observed in South Korea, albeit with a delay of about six months. This can be attributed to factors such as successful infection management policies without full lockdown, rigid corporate culture, and a lack of awareness regarding digital nomadism, which required more time for individuals and companies to increase their understanding of workation.
It is noteworthy that even at the current point in 2023, which has transitioned to an endemic phase, there continues to be a sustained level of interest in workation. This can be attributed to the fact that, following the experience of the COVID-19 pandemic, hybrid work models, flexible work arrangements, and the concept of the ‘new normal’ have become established practices.
The increase in long-term stays can also serve as indirect evidence of the spread of the workation trend. Analyzing reservation data from Yanolja, it can be observed that the proportion of stays lasting six nights or more has steadily increased since 2019. Although the share of stays lasting six nights or more between January and May 2023 is less than 0.1% of the total reservations, this represents a 2.9-fold increase compared to 2019. Additionally, analyzing the reservation data for the period between 2019 and 2022 on a monthly basis reveals that the proportion of stays lasting six nights or more is significantly higher in March, which is considered the off-peak season. These findings from big data analysis indirectly suggest that an increasing number of people are enjoying workation during the off-peak season for travel, when accommodation is more affordable.
As workation is a new trend, it is important to examine how workations are actually being implemented. When we look at workations more closely, we can see that their forms vary depending on the purpose. While there are many different ways, we categorize workations based on the participants and the driving force for program development.
Firstly, the participants of workation can be divided into individuals and groups. Individuals are those who conduct workations according to their own preferences, similar to the concept of digital nomads, without any employer's support. Groups are those in which employers implement workation programs under the purposes of employee welfare, organizational strengthening, etc., and are responsible for most aspects of program planning and financial support.
The main driving forces for the development of workation programs can be classified into government and corporations. Corporations from diverse industries such as hotels, coworking spaces, and travel agencies plan and operate workation programs with the goal of generating revenue. Governments also develop workation programs as part of their policies to revitalize local economies. The former is mainly observed in major cities or famous tourist destinations, while the latter is more common in smaller regional cities facing concerns of depopulation.
There are also regional preferences for different types of workations.In Europe and the United States, there is a work culture that facilitates remote work or extended vacations of around a month. As a result, a culture of individuals leaving for workations based on their own work styles has become established. Driven by the self-generated demand from individuals, the workation market is growing, with the emergence of new workation operators in popular travel destinations or quiet small towns.
In Japan, the government promotes workation to attract a ‘relational population’5 to areas facing depopulation. The Japan Tourism Agency began discussions on promoting ‘new styles of travel’ such as workation and bleisure as early as 20196, even before the COVID-19 pandemic. From March 2021, they have been investing 500 million yen in workation programs. One notable successful example of workation in Japan is Wakayama. Wakayama was the first local government in Japan to initiate workation programs in 2017, focusing on attracting remote offices of IT companies. As of 2022, the efforts have paid off, with 13 companies, including Mitsubishi Jisho, NEC Solution Innovators, and Salesforce, operating remote offices in Wakayama.
So, how is Korea doing? The current situation in Korea can be seen as similar to the early stages of the workation market in Japan. In Korea, it was large companies that led the spread of workation. Starting from the end of 2021, major companies such as Naver, LG U+, Hyundai Department Store, Lotte Members, Toss, Yanolja, CJ ENM, and others have begun to introduce workation as employee benefits. They offer workation programs where employees can work and relax simultaneously, ranging from short stays of three nights and four days to longer stays of up to a month, utilizing remote offices or accommodations provided by the company. The companies are actively promoting their workation programs through various channels, and it is clear that they are using workation not only to boost employee morale, but also to improve corporate brand and attract talented employees.
However, at the current stage, local governments are showing the most proactive steps. Gangwon was the first to start, collaborating with private enterprises to develop and sell individual and group workation packages since 2021. In a short period of time, Gangwon has achieved remarkable results. The sales of individual packages increased by 15.6%, from 19,727 stays in 2021 to 22,801 stays in 2022. The group packages showed an even higher growth rate of 168%, with stays increasing from 1,119 in 2021 to 2,994 in 2022.
The year 2023 can be regarded as the inaugural year of workation expansion driven by local governments, as various programs are being introduced by each local government. However, there are differences in approaches among local governments. While some, like Gangwon, directly develop and sell workation packages, others, like Busan, provide shared offices for free to individual/business applicants and encourage them to stay in affiliated accommodations. Jeju focuses on supporting private workation companies within the province.
The decrease in local tourists due to COVID-19 has led local governments to actively promote workation. In response, local governments are converting budgets previously used for traditional tourism into new workation projects. The reason local governments are paying attention to workation is due to the significant social impact it can bring compared to traditional tourism. The activation of the workation market within regions can help alleviate the difficulty in securing tourism industry personnel caused by fluctuations in the scale of weekday and weekend visitors, as well as increase the relational population and mitigate financial burdens and social conflicts faced by local governments.
As overall societal interest in workation increases, the companies that specialize in workation have also emerged. Desker, a brand specializing in office furniture, was one of the first to move into this industry In 2021, they opened a pop-up office in Yangyang, and they now operate two office spaces and one accommodation space in the area. Other startups, such as Dear Monday and O-Peace, have also entered the market, opening shared offices in tourist destinations and providing workation packages in collaboration with nearby accommodations. Additionally, B2B business models are emerging, such as The Hyoosik, which provides consulting services for implementing internal workation programs within enterprises.
Yanolja, a South Korean travel platform company, introduced its workation policy in October 2021. As of June 2023, the company has held four workation periods, each lasting six nights and seven days. Participants are selected through a lottery system, and accommodation and meal expenses are provided.
Despite the fact that previous participants were ineligible to apply, the competition ratio for the 4th workation exceeded 4:1. Furthermore, considering the high satisfaction rate of workation participants, which has remained above 90%, it can be inferred that Yanolja's workation policy is being successfully implemented. Notably, the 3rd workation held in Busan had a satisfaction rate approaching 98%.
So, what aspects of the workation made participants satisfied? We asked open- ended questions to participants from the 3rd and 4th periods about what they liked about the workation, and analyzed the results using a word cloud. The most frequently mentioned words were "refresh," "healing," and "experience," which expressed the happiness derived from getting away from everyday life. The most noticeable point is that the word "work" was mentioned most frequently. This is because there were many positive responses about improving work efficiency, such as "My concentration increased while working in a new place" and "I focused on work to enjoy the evening." This also indirectly shows that participants perceive workation as a way to enhance work efficiency rather than simply considering it as a vacation.
We also checked the negative feedback of workation using a word cloud analysis. Negative opinions were mainly about the dissatisfaction with the space, specifically accommodation, hotels, shared offices, and monitors, instead of emotional words. And words related to meals, such as breakfast, dinner, restaurant, and lunch time, are also frequently mentioned. It seems that there is a considerable burden in having three meals a day in an unfamiliar place.
The successful operation of Yanolja's workation policy is likely the result of endless efforts and dedication from the team responsible for planning and managing the program. After meeting with the members of that team and learning from their experiences and insights, I have summarized the following "Four Considerations for Successful Workation Operation" based on their input.
First, it is crucial to clearly define the purpose of the workation. Different companies may have different objectives for implementing workation policy. For some, the primary goal may be stress management for employees, while for others, it could be strengthening the organization. The workation offered by a company may also vary, ranging from providing employees with time to relax in nature to offering opportunities for diverse experiences. Therefore, it is important to establish a clear purpose from the early stages of workation preparation, as the choice of location and accommodation criteria will depend on these objectives.
Second, it is important to prioritize the practicality of daily life when choosing a location for a workation. Work is a significant part of a workation, so minimizing the inconvenience of daily life is essential. As Brian Chesky, the co-founder of Airbnb, said, “the longer you’re away, the more you want to be in a home with amenities and the comfort of your office or your house.”9 Not only is transportation from home to the workation site important, but having easy access to nearby facilities during the workation period is also crucial. This includes securing parking spaces for those who use their own vehicles. If local transportation options are limited, it can be challenging to have meals during lunch time or enjoy leisure activities after work hours.
Third, networking channels among participants should be provided. Yanolja discovered that many participants felt lonely during their workations. In response, they organized dinner parties for networking during the 4th workation program, which was met with positive feedback. Operating online communication channels also helps participants to connect with each other and facilitates spontaneous networking events. Yanolja created a private Slack channel10 for communication between organizers and participants, which evolved into a platform where participants could share useful information such as good cafes for work, tourist attractions, and find colleagues to have meals or engage in activities together.
Fourth, it is important to remember that everyone has different preferences and desires. Since individuals have different purposes for participating in workation, preferred leisure activities, and personal preferences, it is impossible to accommodate everyone's needs perfectly. For example, the room type desired by someone who enjoys workation as a solo traveler may differ from that of someone who is doing it with their family. Additionally, there are countless factors that may arise in terms of individual-specific requirements. From the perspective of the organizers, it is essential to clearly define the scope of accommodating individual requirements from the planning stage to minimize operational confusion.
During a workation, both travel and daily life occur simultaneously, requiring consideration of more aspects than ordinary travel. This means that operating a workation program requires a significant allocation of resources for the company. Additionally, it is challenging to measure the quantitative impact of workation compared to the resources invested. Therefore, in order for workation to become a common welfare system, social awareness that workation is an effective method for manpower management and management's willingness to introduce it should be further expanded.
The pandemic that brought about the rise of workation trends has come to and end. So, what does the future hold for workations? It is difficult to make definitive conclusions about the future, but I would like to explore both the factors that could diminish the popularity of workations and the possibilities of their continued spread.
The fact that many companies are scaling back remote work could hinder the growth of workations. Not only global tech giants like Google and Apple, but also many domestic companies require their employees to return to the office. This could be a significant barrier to the growth of workations, as workations require a significant amount of remote work.
It is also concerning that there is still a considerable number of people in Korea who do not view workations in a favorable light. As mentioned earlier, the benefits of workations are not easily quantifiable. Therefore, many executives hesitate to introduce workations. From the perspective of workers, there are negative views such as reluctance to work even in vacation and dissatisfaction with the perceived inequality of workation opportunities. Recently, there has been a heated competition as various local governments jump into the workation business. If there are numerous cases of failure in workation programs, it could amplify the negative perception of workations.
However, if we shift our perspective, the widespread adoption of hybrid work could also create opportunities in the workation market. Even with a hybrid work system, it is entirely possible to have shorter workations lasting around 3 nights and 4 days, including weekends. Therefore, there is still untapped potential for growth, particularly in the short-term workation sector. Additionally, there is a likelihood of more companies expanding the utilization of workation programs as compensation for ending or canceling remote work. In fact, it has been reported that Hyundai Department Store will double the number of participants in its existing workation program when it terminates remote work policy in early 2023.
*To reference this article, please use the below citation: “Somi Kang (2023). What Lies Ahead for the Future of Workcation?, Yanolja Research Insights Vol. 4.”
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