Looking to Boost Economic Development? Open a Hospitality Department

Economic development departments are about to be scrambled. Remote work was the last straw, but two other forces contributed as well.

The first cause is the change in thinking about corporate incentive packages. Increasingly, over the last decade, cities have become increasingly aware that they’re a fool’s game. Smart, forward-thinking cities and regions like Tulsa, Northwest Arkansas, Vermont and West Virginia have realized that successful coastal enclaves like New York and San Francisco lure companies primarily due to their substantial talent. Instead of throwing tax breaks at companies, cities and regions across the country have begun chasing the workers that corporations covet by building out their amenities.

The second cause is the evolution of the travel industry, which now blurs the boundary between residential relocation and tourism. This “long form tourism” (a term coined by Greg Lindsay of NewCities) is enabled by services like Sonder or Landing. They allow long-term stays, supplant traditional mortgages and leases, and free workers to move wherever they like, whenever they like. 

Are they tourists? Are they temporary locals? Whatever you call them, if cities want to lure companies, they need to pursue them. And to do it well, they need to rejigger their tourism marketing platforms to attract visitors who measure their stay in months or years, not days.

The final straw, of course, was the pandemic, which supersized the mobile talent market. With offices closed and video communication platforms flourishing, the pandemic made it clear that remote work was feasible. Current estimates predict that 22% of American workers will work remotely by 2025. The change is so pervasive that even the usually risk-averse federal government has jumped on board, with the Biden administration recently announcing new expansive guidance on remote work for federal agencies. 

In this new landscape, talent is the new currency, remote workers’ options for long-term temporary housing are growing, and the platforms for remote work are now widely used. To reap rewards, economic development offices need to retool themselves to market the city not just to a limited group of corporate executives but to a much broader market of global talent. It turns the old model on its head: Instead of pursuing companies, those companies now pursue the community for the talent they’ve banked.

The Hospitality Department 

To pull this off, governments need to rejigger their economic development departments away from a business-to-business-focused organization to a business-to-consumer model. Gone are the days of exclusively focusing on corporate sales—say hello to hospitality departments.

Many of the core required services to pull this off exist scattered across government; they just need to be reoriented and restructured. Economic development departments need to offer four services: talent attraction, newcomer logistical support, newcomer social support and civic branding. 

Talent attraction is the easiest to envision, not least because it’s similar to the marketing arm of a travel bureau. Instead of telling a story about all the adventures a visitor could enjoy in a two-to-seven-day trip, talent attraction narratives describe fundamental community values. When considering where to relocate, decision-making is driven not just by the sparkly baubles of ski resorts and beaches, but by longer-term criteria, like schools, taxes, year-round weather and culture. 

The second facet is logistical support. Estonia’s online offerings are a prime example of how this can be done, simplifying the nightmarish logistical work that a move entails. A hospitality department would provide a user-friendly, one-stop online resource center for everything from business licenses to school enrollment to parking permits. You want to live here? Come spend an afternoon online and we’ll set you up.

Meeting people and the city are part of the introduction as well. A hospitality department needs to provide social networking infrastructure. San Francisco has a ready-made network of community emergency leaders, the Neighborhood Emergency Response Team, who step up during earthquakes. It shouldn’t be too hard to replicate or re-orient programs like this for a different purpose. 

Instead of telling you where to go in an earthquake, they could welcome you to the neighborhood with cookies and a dinner invite. The department could also offer networking events with other newcomers, newcomers from previous years from the same place and long-term residents willing to show them around. A cultural and historical walking tour of the city would also go a long way.

Having attracted new residents and helped them to get settled, it’s important to make sure they (and existing residents) stay, because the remote work knife cuts both ways. Hospitality departments will have to work to stitch the social fabric back together and strengthen it across the board through civic pride. 

Tulsa Remote draws so many applicants not because of its $10,000 grant to newcomers, but because it makes them feel a part of something larger than themselves. Identifying a city or region’s core values and expressing them through unique channels to fortify the civic brand will be a key piece of retaining talent.

The good news is that, for cities that choose to adapt to the new reality and create a hospitality department, this remote-work-driven shift produces a series of second-order benefits that will bolster cities and communities for years to come. It will:

• Arm host cities and regions with improved data on their remote workforce, allowing them to find and create talent clusters.
• Launch an army of proselytizers; newcomers are always proud converts.
• Seed startup ecosystems that are deeply tied to and identified by their region.

The trick is wrangling existing agencies and helping them apply their existing talents to play the new game of talent attraction. It will require internal rearrangement, but there’s not much choice. The era of remote work has started.