Workcations, where travellers combine work and leisure at their destinations to prolong holidays, have exploded in popularity since hybrid working became the de facto working model for many. Thanks to advances in technology and the proliferation of flexible and hybrid working models, employees can now work wherever and whenever is most productive, whether that’s around the corner or thousands of miles away on vacation. Adopting flexible workspaces as part of a hybrid approach could boost productivity by up to 11% over the next five years, according to the new IWG Hybrid Working Productivity Report produced in partnership with global consultancy Arup. Companies across the world are benefitting significantly from increased productivity, seeing tangible benefits in the retention and attraction of top global talent.

New research from IWG, the world’s largest platform for work and provider of flexible workspace, has revealed the rising popularity of workcations among white-collar office workers, with 78% of workers viewing a ‘work from anywhere policy’ as a significant factor when considering a new job. 87% of hybrid workers say the freedom to work from anywhere boosts their productivity. Similar numbers report reduced burnout (85%) and improved work-life balance (87%). Workplace flexibility is also proving essential for employee retention. Flexible arrangements can reduce voluntary turnover rates by up to 20%, with employees three times more likely to stay in roles where they can choose from a number of working options. With over 4,000 flexible workspace locations in more than 120 countries, including an additional 899 new centres signed to its network in 2024 alone, IWG’s network includes the world’s leading ‘workcation’ cities. Each location was awarded a mark out of 10 across: climate, accommodation, transport, food, drink, happiness, broadband speed, sustainability, culture, and availability of flexible workspaces, alongside the new digital nomad visa and nature proximity categories.

2025 top 10 workcation cities

1. Tokyo
2. Rio de Janeiro
3. Budapest
4. Seoul
5. Barcelona
6. Beijing
7. Lisbon
8. Rome
9. Paris
10. Valletta

Tokyo takes the crown (91/120)

Tokyo scored highly for its exceptional broadband speeds, transport infrastructure, safety, culture, and new digital nomad visa launched in April 2024, which grants stays up to 12 months at a competitive cost. The city also benefits from proximity to mountains, coastal regions, and national parks – ideal for hybrid workers seeking an exciting urban atmosphere alongside natural escapes.

Rio cements second place (90/100)

Previously joint second, Rio de Janeiro cements its place near the top thanks to its citywide 5G rollout, improved coworking availability, and affordable living costs. Home to the world-famous carnival, Rio is filled with nightclubs, restaurants, and extensive green spaces. Hybrid workers will benefit from a thriving digital nomad community, bolstered by local government investments to make the city more attractive for remote workers, alongside famous beaches like Copacabana and Ipanema, and rainforest trails through Tijuca National Park.

Budapest a strong third (89.5/100)

Budapest remains a workcation favourite with its affordable accommodation, strong transport links, and broad cultural offering, although new visa policies have shifted the top ranks.

New entrants in the top 10

• Seoul (4th): strong scores for broadband, transport, and the newly streamlined digital nomad visa scheme
• Rome (8th): excellent food, historic surroundings, and Italy’s national digital nomad visa launched in January 2025
• Paris (9th): scores highly for culture, transport, and co-working options despite higher general costs
• Valletta (10th): enters top-10 status thanks to its Mediterranean climate, historic charm, and accessible size

Emerging workcation destinations for 2025

This year’s barometer welcomed 10 new cities: Tokyo, Seoul, Rome, Cairo, Mexico City, Cape Town, Prague, Melbourne, Orlando, and Reykjavik. Each scored well on newly introduced criteria assessing the availability and cost of digital nomad visas, alongside proximity to beaches, mountains, and national parks, reflecting hybrid workers’ growing preference for access to outdoor recreation, with 75% stating access to natural surroundings is a major factor in their destination choice.

Mark Dixon, Founder and CEO of IWG, said: “We’re seeing more workers than ever extending their trips to work remotely or choosing to spend longer periods abroad as digital nomads. Thanks to hybrid working and cloud technology, employees now have the freedom to work wherever and whenever suits them best – whether that’s a local flexible workspace or a co-working centre on the other side of the world. For many, the days of long daily commutes are over, and there is more freedom to work in new locations.

“This trend is here to stay with many companies adopting flexible working and WFA policies, particularly over the summer months for the long-term, which not only improves work-life balance and reduces burnout but also delivers significant productivity gains. In fact, our recent report in partnership with Arup has revealed that businesses empowering employees to use local workspaces and offices as part of their work location strategy could boost productivity by 11% over the next five years, making it a clear win-win for both employees and employers in the global battle for talent.”

Xavier Anderson, 27, a marketing professional who works remotely while traveling across Europe, said: “I feel so grateful to be able to work-from-anywhere – it’s improved my wellbeing hugely, and my productivity has actually increased. The flexibility has been life-changing, and I feel more committed to my work.

“Usually, I split my time working between a local flexible workspace, company HQ, and home, but being able to work from a destination I would usually have to take annual leave to visit has been an incredible experience. I might start my mornings with a swim before logging on from my accommodation or a co-working space. The flexible workspace I use here has fast Wi-Fi, quiet areas for calls, and a great community feeling, which means I can stay productive and connected with my team back home while also getting the most out of the local area.”

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