Yelp: Local economies across US showing ‘strong’ signs of recovery as new businesses spike

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BERLIN, GERMANY – NOVEMBER 27: The Logo of Yelp is displayed on a smartphone on November 27, 2019 in Berlin, Germany. (Photo by Thomas Trutschel/Photothek via Getty Images)

(NEXSTAR) – Local economies across the nation are showing “strong signals” of recovery, according to Yelp.

Using data obtained from its crowd-sourced review site, Yelp’s Economic Average report for the first quarter of 2021 indicates a spike in new business openings — as well as the reopening of existing businesses — across the country. Not surprisingly, the data coincides with a dip in nationwide coronavirus cases and rising vaccination rates, as well as increased interest in services more popular prior to the pandemic.

In its Q1 report released Wednesday, Yelp’s data showed new businesses boomed in Q1, with 146,486 total new listings shared to Yelp — a number which represents only a 2% drop from the same quarter in 2020 and a 4% increase over the same quarter in 2019. These new businesses also account for the “highest level” of brand-new establishments listed to Yelp in a year.

Popular new establishments included restaurants, specialty markets and other food businesses, and especially those that offer takeout or outdoor dining. Bakeries and dessert shops were quite popular as well, “as people continue to turn their baking hobbies into new ventures during the pandemic,” according to the report. Businesses specializing in home services also experienced a surge in openings and interest in Q1, as homeowners continued to embark on renovation projects or seek out real estate agents for help selling or buying a new place.

When it comes to existing businesses that were shuttered earlier during the pandemic, Yelp recorded more than half a million of these businesses reopening in the last year, with reopenings in each month of the first quarter exceeding those of every month since July 2020. Businesses with the highest national reopening rates in Q1 included tax services, massage services and specialty restaurant or food-service establishments (coffee shops, bars, breakfast- or brunch-only restaurants), among other strong categories such as salons, gyms and traditional restaurants.

New business openings, however, increased at a higher rate in states with eased coronavirus restrictions, such as Mississippi (979 openings, or a 39% increase over Q4 2020), Alabama (1,921 openings, up 35%), Maine (450 openings, up 32%), South Carolina (2,493 openings, up 31%), and Michigan (3,557 openings, up 30%).

“Each of these states experienced easing of pandemic restrictions, such as allowing indoor dining at 50% or more capacity, and reducing limits on mass gatherings throughout March,” notes Yelp in its Q1 report.

Only one state in the entire country was observed to have experienced a decrease in new business openings over Q4 in 2020: North Dakota had 206 new business listings on Yelp as compared to 210 in the previous quarter — a 1.9% drop.

Yelp’s Economic Average report, while indicative of a possible rebound for local economies nationwide, is based on data provided solely to Yelp by the platform’s users on new or reopened businesses. Trends on consumer interest or demand for particular services or goods is based on a particular businesses views on the website, or any reviews or photos left on its Yelp page.

More information on each state’s rate of new and reopened businesses can be found at Yelp.

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