Aug 29, 2023 - Economy

Inside the business boom of 2023

Note: Openings measured by new business listings on Yelp, added by businesses or Yelp users. New business data may lag due to time taken to report and verify new openings from the community. Data: Yelp; Chart: Axios Visuals
Note: Openings measured by new business listings on Yelp, added by businesses or Yelp users. New business data may lag due to time taken to report and verify new openings from the community. Data: Yelp; Chart: Axios Visuals

Business openings in the U.S. have exceeded 2019 levels every month this year, thanks to a surge in travel, events and get-togethers.

Driving the news: New listings of shops and services on Yelp are on track to beat 2022's all-time high, according to a new report from the company, published Tuesday.

  • Nearly 484,000 new businesses popped up on the platform from January through the end of July this year — compared to about 389,000 over the same time period last year. That's a roughly 25% increase year over year, and a 46% increase from the same period in 2019.
  • Openings increased across every category and were driven across the country by hotels and travel (up 39% over 2022), home services (up 37%), auto (up 27%), event services (up 27%), and local services businesses (up 23%).
  • Within travel, the biggest growth compared to last year has come from RV rentals (up 84%), travel agents (up 76%), vacation rentals (up 54%), airport shuttles (up 30%), and walking tours (up 15%).

Zoom out: Geographically, California, Florida, Texas, New York, and Georgia saw the largest total number of new business openings. (Florida overtook Texas this year, moving to second after landing third in 2022.)

  • And overall, while every state saw an increase in new business openings, East Coast states saw the most significant percentage growth in new businesses compared to the same time period last year. Rhode Island (up 46%), West Virginia (up 46%), Delaware (up 45%), and Vermont (up 38%) topped the list.

What they're saying: "As reasons for economic optimism grow, it’s promising to see new business growth approach a new all-time high, with the uptick being reflected in minority-owned businesses as well," Yelp says.

Zoom in: So far this year, every month has also seen more business openings from underrepresented communities compared to its respective month last year.

  • LGBTQ-owned businesses (up 33%), Black-owned (up 28%), and Latin-owned (up 28%) business openings grew above the national average (up 25%) when comparing January through July 2023 to the same time period last year.
  • Women-owned businesses saw an increase of 19% in openings and Asian-owned businesses saw an increase of 13%.

What to watch: How long economic optimism lasts and whether momentum continues as banking conditions tighten for small businesses.

Of note: Yelp business openings refer to new business listings on the platform in a given timeframe.

  • Business owners or Yelp users can add listings. And new business data may lag due to time taken to report and verify openings, Yelp says.

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