New Business Openings Surpass Pre-pandemic Levels in Q1 2022
Yelp Inc., the company that connects people with great local businesses, released first quarter 2022 data for the Yelp Economic Average (YEA) report, a benchmark of local economic strength in the U.S. The Q1 2022 YEA report reveals consumers described more inflationary experiences within their reviews on Yelp in 2022 than ever before. New business growth surpassed pre-pandemic levels with nightlife, beauty, and hotels and travel businesses driving new business openings. As gas prices climbed, review mentions related to electric vehicles increased 67% year-over-year in Q1 2022.
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“As inflation rises, Yelp users are mentioning higher prices in their reviews more than ever before”
In Q1, reviewers reporting increasing prices at local businesses grew rapidly in 2021 and reached a new peak in Q1 of 2022, rising by 3% from last quarter (Q4 2021), and 29% from Q1 of 2021. Even as consumer concerns about inflation reached a record high, Yelp data also revealed an increase in people searching for higher cost businesses.
“As inflation rises, Yelp users are mentioning higher prices in their reviews more than ever before,” said Pria Mudan, data science leader at Yelp. “Still, Yelp data shows consumers continuing to search for high-priced restaurants as mask mandates and restrictions lift and restaurants welcome more diners. This pent up demand is also evident in the surge of new business openings in nightlife, beauty, and travel and hotels, which all increased from 2021 levels in Q1. Consumer behavior and business activity suggested favorable economic conditions for local businesses in the first quarter.”
Concerns About Inflation Reached Record High on Yelp, yet Consumers Continued to Search for Higher Cost Businesses
According to Yelp data, reviewers have consistently reported increasing prices at local businesses since 2015, rapidly increasing in 2021 and reaching a new peak in Q1 of 2022 (up 3% from Q4 2021, and 29% from Q1 of 2021). Yet, nearly half (43%) of all restaurant searches using the dollar filter on Yelp in Q1 2022 were looking for higher-priced restaurants with the “$$$” and “$$$$” designation. Searches for low price point restaurants ($) decreased by 13% in Q1 2022 (compared to Q1 2019).
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New Business Openings Increased Nationally in Q1
In Q1 2022, business openings increased by 5% to 152,859 from 145,189 in Q1 2021. Hotels and travel (3,637) nightlife (2,346) and beauty (12,744) categories on Yelp had the largest percentage increases, rising 31%, 23%, and 22% respectively in Q1 year-over-year. Restaurant and food new business openings fell slightly to 17,690, a 2% decrease from Q1 2021 (18,090), but still 5% above Q1 2020 (pre-pandemic) with 17,301 openings.
Consumers Increasingly Mention Electric Vehicles Amidst Surge in Gas Prices
Yelp data shows a national increase of 67% in mentions related to electric vehicle charging in Q1 2022 compared to the same period in 2021. For some states this increase grows when they are examined individually, most notably a 352% increase in Maryland and a 107% increase in New York. EV Charging stations experienced a 27% increase in business openings in Q1 2022 compared to Q1 2021
Read the full report, as well as previous YEA reports, at yelpeconomicaverage.com. Assets and images from the Q1 2022 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
