Home, local, professional and auto services
opened new businesses at higher rates by the end of 2020 compared
to 2019; changes in consumer interest indicate a return to
pre-pandemic activities
Yelp Inc. (NYSE: YELP), the company that connects people with
great local businesses, today released the Annual 2020 Yelp
Economic Average (YEA) report, a benchmark of local economic
strength in the U.S. In 2020, the report was adapted to reveal the
dramatic impact COVID-19 has had on local economies, uncovering the
resilience of local businesses across the country. While the
pandemic continues to drive uncertainty, YEA’s fourth quarter data
demonstrates early evidence of an economic recovery emerging across
the nation.
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the full release here:
https://www.businesswire.com/news/home/20210126005371/en/
Annual 2020 Yelp Economic Average found
that new food and restaurant openings were down in 2020, but had
mostly recovered by the fourth quarter. (Graphic: Business
Wire)
YEA found that reopenings of local businesses increased in the
fourth quarter, with a total of 230,209 businesses reopening
between March 1 and Dec. 31. The report also highlighted how many
industries have persevered through the pandemic by opening new
businesses at comparable or even higher rates than years prior. As
millions of Americans spent more time at home, we saw home and
professional services businesses increase in new openings.
Additionally, YEA uncovered how small tourist towns were heavily
impacted by the loss of seasonal travelers, the behavior of
affianced couples who chose smaller weddings in 2020 or delayed
their nuptials until hearing the promising news of a vaccine, and
how the typical weekend spike in user activity on Yelp waned during
the spring and summer, but quickly came back as people adapted to
the constraints of the pandemic. For the company’s 2020 report, YEA
reflects data from millions of local businesses and tens of
millions of users on Yelp’s platform, measuring U.S. business
openings and reopenings, as well as consumer interest trends via
search data, page views, reviews and photos.
“After a challenging year that’s tested millions of local
businesses, our data shows early signs that local economies may
finally be on the mend,” said Justin Norman, Yelp’s vice president
of data science. “As a testament to their resilience many months
into the pandemic, we saw numerous industries return to
pre-pandemic rates of new openings, as well as restaurants lead in
reopenings during the fourth quarter of 2020. As people spent more
time at home, businesses in the home, local, professional and auto
services, at times, opened more new businesses than prior years,
and all ended the year with a higher number of new openings in
December than years prior.”
New Openings for Restaurant and Food Businesses, as well as
Home, Local, Professional, Local and Auto Services Recover By the
End of the Year
In the third quarter of 2020, YEA observed restaurant and food
businesses open at pre-pandemic levels, due largely to the
innovative ways business owners adapted their operations. Yelp’s
data indicates that the number of restaurant and food business
openings approached and even surpassed 2019 levels in the fourth
quarter. Openings are determined by counting new businesses listed
on Yelp. Restaurant and food business owners opened 18,207
restaurants nationwide in the last quarter of 2020, down only 4%
from the same time period last year – and down only 16% comparing
the full year of 2020 to 2019.
Businesses in the home and professional services space proved to
be the most resilient and poised for growth throughout the
pandemic. In April, openings dropped by only 4% for home services
and 6% for professional services compared to April 2019, the
smallest decreases of major categories on Yelp. Throughout the
remainder of the year (May through December), home services and
professional services had an average increase in openings of 7% and
4%, respectively, from the same periods in 2019.
Local and auto services experienced less severe declines upon
the onset of the pandemic, with their sharpest decline of openings
in April for local services (17% decrease) and May for auto
services (21% decrease). New openings in auto services experienced
an average decrease of 11%, year-over-year, until September (7%
increase year-over-year) followed by decreases in October and
November. Recovery was evident in December, as auto services had
14% more openings than December 2019. Local services experienced
new opening decreases through August, but starting in September
openings increased by 13% year-over-year and continued to show a
strong recovery in the fourth quarter with an 11% average monthly
increase in openings compared to the fourth quarter of 2019.
Retail and shopping businesses averaged approximately 3,118
openings per month in 2020, a 25% decrease from 2019 where the
category averaged 4,175 openings per month. In October, the
industry experienced its highest number of business openings since
February, followed by a slow down of new openings in November and
December.
Fitness and beauty categories experienced a significant drop in
new openings in April (down 64% for fitness and down 66% for beauty
compared to April 2019), but saw new openings begin to recover in
the fourth quarter. Since February 2020, both fitness and beauty
industries experienced their highest number of new openings in
October with 845 and 3,804 new business openings, respectively
(down 26% and 11% year-over-year).
Businesses Reopened Nationwide in the Fourth Quarter, Many
Have Reopened More Than Once Throughout the Year
Data from Yelp’s third quarter YEA report found 210,000
reopenings occurred nationwide, as of Sept. 30. In a show of
continued resiliency, despite increased COVID-19 cases in the
fourth quarter, the total climbed to 230,209 national reopenings
between March 1 and Dec. 31. Reopenings slowed in October, but
increased again in November and especially December, coinciding
with the approval of multiple COVID-19 vaccines by the FDA.
Yelp data tracks all temporary closures of businesses and their
subsequent openings, revealing that many local entrepreneurs were
forced to temporarily close and reopen multiple times throughout
the year. Since March 1, 173,727 businesses reopened once after a
temporary closure, 38,702 businesses reopened twice, and 17,780
businesses reopened three times or more. Businesses in restaurants,
food, shopping, active, health and beauty categories comprised more
than 91% of the businesses that had to reopen twice and 87% of
businesses that reopened three times or more.
In the fourth quarter, Yelp’s reopening data reveals food,
active, professional services and home-related businesses spiked in
reopenings. Despite the ongoing pandemic and surging cases,
restaurant and food categories had 3,512 reopenings and 1,142
reopenings in the fourth quarter, respectively. As the new year
approached, regions with less restrictions showed increased
reopenings in active categories – gyms, health trainers, kids’
activities and parks, had 731 reopenings in the fourth quarter,
with 381 of them in December alone. With lower mortgage interest
rates, Yelp’s data also shows increased reopenings in the fourth
quarter for home and professional services related to home
purchases and/or home improvements including: financial services
(2,035 of reopenings), real estate (256 of reopenings) and home
services (505 of reopenings).
Travel Curbs Hammered Ski and Beach Towns’ Typical Peak
Seasons
Yelp’s consumer interest data shows that the areas most impacted
by the decline in tourism in 2020 were primarily within four
categories: ski towns, beach towns, event locations and Hawaii
destinations.
The report’s data indicates that the cities with the largest
declines in consumer interest, year-over-year, during the first
quarter of 2020 were towns primarily known for their ski mountains,
which have peak seasons through April. Towns hardest hit in the
second quarter were popular spring break destinations, who
experienced decreased volumes of party goers and spring breakers
due to initial efforts to contain the virus. As temperatures rose
in the third quarter, consumer interest in towns with summertime
attractions dipped lower than prior year’s levels, as beachside
communities struggled to sustain consumer interest during their
peak seasons. And in the fourth quarter, Yelp data indicated that
towns hardest hit were primarily in Hawaii, during travel
restrictions from the continental U.S.
Betrothed Couples Are Already Planning Those Delayed 2020
Weddings for 2021
Nationally, Yelp data reveals a decrease in consumer interest in
the wedding planning category compared to 2019. Between September
and November, consumer interest for wedding planning decreased by
an average of 4% compared to the prior year. However, in December,
after two COVID-19 vaccines were FDA approved and distribution
began, consumer interest in wedding planning increased 22% compared
to December 2019.
Throughout 2020, Yelp data shows that many couples continued to
marry, just not the way they initially planned. Consumer interest
in officiants, a category dominated by both officiants and notary
services, was 37% higher in 2020 than in 2019. Conversely, Yelp
searches for “wedding venues” in the event services category
plummeted 22% April through November 2020 compared to the same time
period last year. According to Yelp data, these seemingly
conflicting trends are indicative of consumers gravitating towards
smaller, intimate wedding ceremonies, rather than large-scale
wedding ceremonies and receptions.
Every Day Felt Like a Wednesday in May, but Consumers Are
Reclaiming Their Weekends
In previous years, Yelp data has revealed a weekly pattern of
how users interact with the local economy on weekends, as Fridays,
Saturdays and Sundays are historically the days of the week where
users are most active on the platform. Yelp data shows that
weekends became less active and eventful with less variation in
consumer interest compared to weekdays' during the uncertainty and
confusion surrounding the initial outbreak. March through August,
the typical increase in consumer interest relative to the weekly
average decreased 40% from 2019, with consumer interest beginning
to rebound in August. Beginning in September and continuing through
the end of the year, consumer interest on weekends increased back
to pre-pandemic levels, with the weekend bump in consumer interest
increasing by 50% relative to the weekly average experienced in
March through August.
Read the full report at yelpeconomicaverage.com, as well as find
previous YEA reports and other resources. Assets and images from
the Annual 2020 YEA report can be found here. For more information
and Yelp’s latest company metrics, visit:
https://www.yelp-press.com/company/fast-facts/default.aspx
Methodology
Business Openings
Openings are determined by counting new businesses listed on
Yelp, which are added by either business owners or Yelp users.
Openings are adjusted year-over-year, meaning openings in 2020 are
relative to the same period of time in 2019 for the same category
and geographic location. This adjustment corrects for both
seasonality and the baseline level of Yelp coverage in any given
category and geography.
Business Reopenings
On each date, starting with March 1, we count U.S. businesses
that were temporarily closed and reopened through Dec. 31. A
reopening is of a temporary closure, whether by using Yelp’s
temporary closure feature or by editing hours, excluding closures
due to holidays. Each reopened business is counted at most once, on
the date of its most recent reopening.
To examine the adaptability of local businesses during this
year, we compared the number of businesses that reopened only once
in 2020 to those that reopened twice, and those that reopened three
times or more.
Openings and reopenings are based on when they're indicated on
Yelp, as such, the data may lag slightly from the true opening or
reopening date due to a delay in reporting from consumers and
business owners.
Consumer Interest
We measure consumer interest, in terms of U.S. counts of a few
of the many actions people take to connect with businesses on Yelp:
viewing business pages, or posting photos or reviews.
Consumer interest for each category is based on the 2020
year-over-year change in the category’s share of all consumer
actions in its root category.
Additionally, we measured consumer interest for each category
based on the monthly year-over-year change in the category’s share
of all consumer actions in its root category.
Search Query Text
Search data is used to understand what consumers are searching
for throughout the year. To gather this data, we looked at all
search query text entries for the event planning category in 2019
and 2020. To compare the change in volume of a specific search
query, we evaluated the number of times per million searches the
query was entered. We evaluated this for each week of 2020 and 2019
to determine the year-over-year relative change in search share
over time.
Consumer Action Day of Week
Yelp’s consumer action measure counts page views, reviews, and
photos.
By totalling the number of consumer actions for each day of the
year and comparing the total to the week’s average, you arrive at
the day’s share of the weekly total. Specifically, we evaluated
each day’s actions relative to the weekly average to compare the
changes in consumer interest on weekdays versus weekends (Friday
through Sunday) throughout the year. We additionally measured, by
category, the weekend’s change in weekly action share during three
periods of 2020: Jan. 1 through March 7, March 8 through Aug. 22
and Aug. 23 through Dec. 31.
About Yelp Inc.
Yelp Inc. (www.yelp.com) connects people with great local
businesses. With unmatched local business information, photos and
review content, Yelp provides a one-stop local platform for
consumers to discover, connect and transact with local businesses
of all sizes by making it easy to request a quote, join a waitlist,
and make a reservation, appointment or purchase. Yelp was founded
in San Francisco in July 2004. Since then, Yelp has taken root in
major metros in more than 30 countries.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210126005371/en/
Yelp Inc. Julianne Rowe press@yelp.com
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