In its third annual Work from Anywhere Barometer, International Workplace Group (IWG) has named Tokyo as the world’s leading workcation city for 2025, overtaking strong competition from the likes of Rio de Janeiro and last year’s winner, Budapest.
Cape Town features strongly in the study at 19th place globally as a workcation destination, with 60% of hybrid workers are more likely to extend a holiday to work remotely than this time last year.
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 reveals 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.
Eighty-seven percent 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.
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 secures its top spot with a citywide 5G rollout, better coworking options, and affordable living.
Famous for its carnival, Rio offers nightclubs, restaurants, green spaces, beaches like Copacabana and Ipanema, and rainforest trails in Tijuca Park.
Its growing digital nomad scene is supported by government efforts to attract remote workers.
Cape Town, nineteenth place (81/100)
Cape Town boasts unparalleled natural beauty with its iconic Table Mountain, pristine beaches, and lush vineyards. It offers the perfect work-life balance amidst stunning landscapes that inspire productivity and creativity.
A workation in Cape Town provides the ideal mix of work and leisure. With its breathtaking scenery, vibrant culture, and conducive work environment, the city is a prime destination for remote workers and hybrid ‘workcationers’.
Its reliable connectivity and varied accommodations make Cape Town an easy choice for a workation.
Emerging workcation destinations for 2025
This year’s barometer welcomed 10 new cities: Tokyo, Seoul, Rome, Cairo, Mexico City, Cape Town, South Africa, 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, comments: “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.”