Yelp has released its Q2 2020 Yelp Economic Report that helps put hard numbers against the plight restaurant and bar owners are facing as COVID-19 continues to decimate the industry. Their report in June showed a slowing of closed businesses but that number has started to increase again as state and local mandates from Florida to California have required bars to shut their doors, indoor dining allowances to reverse, or reduction in capacity limits to be reinstated.
Our latest #YelpEconomicAverage shows a correlation between an increase of consumer interest in restaurants, bars and nightlife, and gyms in May and an increase in COVID-19 cases in June, using data from our Local Economic Impact Report. Read more here: https://t.co/GqJJ1AZxq8.— Yelp (@Yelp) July 22, 2020
Yelp found that in states like Florida, Nevada, South Carolina, Texas, and Georgia, there was “statistically significant correlation” between consumer interest increases for bars, nightlife, restaurants, and gyms and increases COVID-19 cases. These states showed aggregate consumer interest increases of over 50% compared to levels in March and late April. For states that have seen a decrease or slowing in coronavirus cases, consumer interest levels had remained flat through May.
2/ In states where consumer interest increased in the month of May, we found a statistically significant uptick in coronavirus cases in June. Texas, Florida, South Carolina, and Georgia, where Yelp activity grew substantially, have become COVID-19 hotspots as of late. pic.twitter.com/M2DmtuOOJj— The DataFace (@TheDataFace) July 23, 2020
Yelp Business Shutdowns
Overall, Yelp reported 140,000 business closures from March 1st to June 15. This number jumped to 147,000 on June 19 before decreasing to 132,500 on July 10th. Putting this number into context, only 24% of businesses have reopened comparing numbers to April. The national permanent closure rate for all businesses on Yelp is at 55% as of July 10th.
3/ The number of businesses closed on Yelp has fallen by 24% since April, but the percent of closures that are permanent continues to climb. Permanent closures now account for 55% of total closures, up from 20% in April. pic.twitter.com/W3bjkFwRih— The DataFace (@TheDataFace) July 23, 2020
Looking at restaurants specifically, there have been 26,160 operations that have shut down that were open on March 1st. Bars and nightlife has seen 5,454 business shut down. As a percentage, 60% of those restaurants and 45% of those bars and nightclubs have indicated they have shut down permanently which are some of the highest numbers on the Yelp platform. Shopping & retail (48%) was recently surpassed by restaurants to take the top spot and beauty & spas (36%) and fitness (39%) operations round up the three industries excluding hospitality.
Using closures per 100k to normalize market size, Honolulu, San Francisco, and Las Vegas are the worst hit markets. Las Vegas' dependence on tourism is highlighted by the fact that they are suffering the worst rate of permanent closures than any other major market.
4/ Businesses in major metro areas have been hit hard, particularly in the West. San Francisco, Las Vegas, San Jose, San Diego, Los Angeles, and Seattle all cracked the top 15 for metros with the most closures per 1,000 businesses. pic.twitter.com/fs9TiEAn2v— The DataFace (@TheDataFace) July 23, 2020
Updated Consumer Interest
While businesses are shuttering, consumer interest continues to increase as the country deals with a phased reopening approach. In the food category, wineries (51%) and street vendors (33%) have had the highest increase since June 1st. In nightlife & entertainment, whiskey bars (12%) and beer gardens (9%) are up the most. Karaoke and dance clubs are down 32% and 48%, respectively.
The full report and summary can be found here.