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The fitness industry has experienced steady growth in recent years, propelled by consumers’ prioritization of health and wellness – and gyms across the country are benefiting.
So with 2024 underway, we dove into the data to examine the segment’s performance during the first months of the year. Did Fitness’ strong January showing persist beyond the season of new year’s resolutions? And how did major gym chains – including Planet Fitness, Life Time, Crunch Fitness, and EōS – perform in Q1 2024 relative to last year?
Fitness has been a consistent success story over the past few years, and the category is showing no signs of slowing down. Year-over-year (YoY) visits to the industry were up nearly every week between January and April 2024, with the sole exception of the week of January 15th, when an Arctic blast saw many people hunkering down indoors. And visits remained slightly elevated even during the week of March 25th, when Easter celebrations likely distracted many people from their gym goals – an impressive feat given the comparison to a non-holiday week in 2023.
Drilling down into visit trends for eight major fitness chains shows that in today’s robust fitness environment, there’s enough demand to sustain a variety of chains: Both premium and mid-range options like Life Time and LA Fitness as well as more affordable choices like Planet Fitness and Crunch Fitness saw visits increase or remain steady for most of Q1 – and all saw YoY visit bumps in April.
Some gym-goers hit the gym several times a week and spend hours working out, while others have a more relaxed get-in-shape schedule. And analyzing leading chains’ visitation patterns shows that gyms are finding success by catering to fitness buffs’ varying preferences.
Perhaps unsurprisingly, the data reveals a strong correlation between a chain’s share of frequent visitors (i.e. those visiting the gym eight or more times in a month), and a chain’s share of visitors staying longer than 90 minutes. While some clubs, including Life Time and EōS appear to attract highly dedicated gym-goers, others, including Planet Fitness and Anytime Fitness, seem to draw more casual visitors.
The fact that both fitness chains attracting frequent visitors for longer workouts and gyms that cater to more casual exercisers who spend less time in the gym during each session are seeing positive visitation trends indicates that there are plenty of models for fitness success in 2024.
One thing seems clear – interest in gyms is not going away anytime soon. Visits continue to show YoY growth, and the industry is full of options for every kind of fitness enthusiast. Whether opting for occasional visits or adhering to a structured workout regimen – there’s something for everyone.
To stay ahead of the latest retail and fitness developments, visit placer.ai/blog.
Following a busy week of Q1 2024 updates several restaurant chains, the key question facing operators is whether menu price increases the past several years have forced consumers into alternative food retail channels. Several restaurant chains--most notably McDonald’s–highlighted a more “discriminating” consumer during their quarterly updates. According McDonald’s CEO Chris Kempczinski on the company’s Q1 2024 update this week: “U.S. consumers continued to be even more discriminating with every dollar that they spend as they faced elevated prices in their day-to-day spending which is putting pressure on the QSR industry.” In turn, this has resulted in flat-to-declining industry traffic in the U.S. during the quarter. Looking at year-to-date visitation trends across the different restaurant categories, we see a weak start to the year due to inclement weather, followed by a rebound to low-single-digit growth for the limited-service categories (QSR and fast casual) and low-single-digit declines for the full-service restaurant chains.
As we discuss throughout this week’s Anchor report, consumers will likely remain discriminating over the next several quarters. As such, we expect a continuation of the channel shifts we’ve been witnessing across the broader food retail sector. According to our data, the QSR category saw a +5% increase in visits from 2019-2023, while the full-service restaurant category saw a -8% decrease in visits (partly explained by the permanent closure of many smaller, regional full-service dining chains). Conversely, the grocery, superstore, convenience store, and dollar/discount stores have all seen meaningfully higher visit growth over the same period (as our friends at Restaurant Business have also called out), indicating these channels are taking share from the restaurant industry.
Looking at McDonald’s cross-visitation trends during the quarter, we see further evidence of this shift. We’ve compared the favorite grocery chains of McDonald’s visitors in Q1 2024 to Q1 2023 below. We see a material increase in the percentage of McDonald’s visitors that visited an Aldi location year-over-year–24% versus 17% in the year ago period. We also see a decrease in percentage of visits to most conventional grocery chains.
Not surprisingly, McDonald’s plans to accentuate its value offerings in the coming quarters. On its update call, management noted that 90% of its U.S. locations offer meal bundles for $4 or less and that it has been running several promotions through its digital app. The company also noted the need to align around a strong national value proposition so that the company can use its tremendous media scale to drive high consumer awareness. It will likely take time for McDonald’s to organize around its value platform, but once it does start to promote its value offerings on a nationwide basis, we would expect much of the rest of the QSR category to follow suit.
This weekend, Formula 1 is once again ready to take the track in the United States, this time at the Miami Grand Prix on Sunday. The Miami Grand Prix is the first U.S. race in the 2024 calendar, followed by the U.S. Grand Prix in Austin, Texas and the Las Vegas Grand Prix in the fall.
America has grown into the new epicenter of the sport and is the only country besides Italy to host multiple races in a singular season. Not only does the U.S. host races, but countless American retail, tech, CPG and hospitality brands serve as team sponsors, including Marriott, Rokt, Tommy Hilfiger, Google, eBay, Coca Cola and more. For brands looking at the consumption habits of younger, more affluent consumers, the rise of Formula 1 in the U.S. can help unlock insights on this group. Credit for Formula 1’s exponential growth in popularity is largely due to the Netflix docuseries, Drive to Survive, which just released its sixth season in the first quarter of 2024. According to Netflix, over 90 million hours of the program were watched throughout the first half of last year. The immense popularity of the show and its behind the scenes access to the luxurious world of F1 generated a large demand for the sport by Americans, and the appetite for home grown F1 races where U.S. based fans can participate is palpable.
2024 is the third running of the Miami Grand Prix, held around Hard Rock Stadium, with the event debuting in 2022. According to Placer.ai data, traffic at the event, which usually runs Thursday-Sunday, in 2023 increased 3% compared to 2022. Usually during grand prix weekends, visitors have the option to purchase single or multi-day passes, and our data (as shown below) indicates that there were fewer repeat visits in 2023 compared to 2022; consumers may have chosen single day passes more often or made the event a part of a larger weekend in Miami. The highest number of visits occurred on Sunday each year, which aligns with the fact that the actual race takes place that day, with practice sessions and qualifying taking place on Friday and Saturday respectively.
Despite slightly fewer loyal visits during the weekend, the time spent at the event increased, with an average of 179 minutes, up 4% year-over-year. With consumers spending around three hours at the venue, there is a huge opportunity for American CPG and retail companies to engage with this captive audience.
The U.S. Grand Prix, held annually in Austin, has seen similar success from the influx of American F1 fans. Traffic at the 2023 event weekend grew by 38% compared to 2019. 2022 saw peak event attendance, most likely due to a competitive and exhilarating end to the 2021 season that bled into the next year. 2023 also saw the highest percentage of three-day visits during the weekend, highlighting that most U.S. Grand Prix attendees visit the track multiple days for the various race weekend events.
While the growth of the event itself is impressive, the change in visitor demographics provides an even more striking opportunity for American retailers and brands. 2023 brought the highest percentage of visits from young professionals and young urban singles compared to all other segments in 2023. Young professionals also grew to 36% of visits in 2023 from less than 30% in 2019, showcasing the rise in younger and more affluent visitors. Both the popularity of Netflix coupled with the increase in influencer marketing brand trips to races may both have contributed to this shift over time.
It’s clear that Formula 1’s growing popularity has no doubt fueled race expansion stateside and that has been able to capture the attention of the elusive younger consumer, especially those with disposable income. Brands, licensees and retailers have all jumped on the opportunity to collaborate with drivers, teams and race weekends to tap into this growth market. Sporting events are a highly competitive landscape, excuse the pun, but the intersection of sports and content have paved the way for Formula 1’s success in the U.S.
Last week, Chipotle’s Q1 2024 update featured a number of positives, including visitation trends that outperformed the broader restaurant category and strong contribution from new store openings. More than 5% of the company’s 7% comparable sales growth during the quarter was driven by transaction growth, and year-over-year visitation trends have accelerated thus far in April. (Recall that our year-over-year visitation data includes contribution from stores opened during the past year as well as improvements in visits per location).
Impressively, there were multiple sources driving Chipotle’s transaction growth during the quarter. The company’s strong track record for menu innovation under CEO Brian Niccol continued during the most recent quarter, with the company spotlighting Barbacoa and the return of Chicken Al Pastor as a limited time offer. Management will continue to explore new menu additions, and is currently developing a new product pipeline for the next 18-24 months.
While menu innovation is important, it’s clear that throughput (the amount of customers that can be served with Chipotle’s assembly line process) is becoming a major factor in visitation traffic outperformance. We believe this has been driven by lower employee turnover rates—the company noted that it is experiencing the lowest turnover rates since Niccol joined the company in March 2018. According to management, throughput reached the highest levels in four years because of more consistent staffing, which aligns with our visit per location data for the past five years (below).
Chipotle noted that its throughput improved by nearly 2 entrees in its peak 15 minutes compared to last year with each month showing an acceleration. According to the company, “the restaurants run more smoothly as our teams are properly trained and deployed, which allows them to keep up with demand without stress. This leads to more stability and therefore more experienced teams that execute better every day, and this can be seen in our latest turnover data which is at historically low levels.” Our data also shows that visitation trends are improving during its peak hours, but that its peak hours are also changing. Historically, the hours between 12:00 PM-2:00 PM have represented Chipotle’s most frequently visited hours, but post-pandemic, we’ve seen visits shift to the 6:00 PM-8:00 PM timeframe (below). Return-to-office trends partly explain these trends, as do Chipotle’s push into smaller, more suburban/rural markets.
When we look at visit per location trends by hour, we see that most of the improvement during the Q1 2024 compared to Q1 2023 took place during the later afternoon and evening dayparts.
Looking ahead, Chipotle sees an opportunity to improve peak hour throughput, including adjusting the cadence of digital orders to better balance the deployment of labor (thus eliminating the need to pull a crew member from the front makeline to help the digital makeline during peak periods). The company also plans to bring back a coaching tool for its associates that it had in place prior to the pandemic. With more and more retailers embracing generative AI to help educate and train their employees-–a trend we heard consistently at this week’s Analytics Unite conference–we would expect Chipotle to also adopt generative AI with its updated coaching tool, potentially unlocking greater throughput improvements in the process.
The widespread adoption of hybrid work continues to be one of the most significant paradigm shifts since the COVID pandemic. As employees visit offices less frequently, or not at all, corporate users are opting for less but better space which is driving office vacancy rates to record highs.
But even as utilization for many office buildings remains below capacity, some buildings are clearly prospering. So what sets these thriving properties apart from the pack? We looked at outperforming office buildings in four major metro areas – New York, Chicago, San Francisco, and Dallas – to find out.
The post-pandemic office recovery has been uneven across the country. As of February 2024, a significantly larger share of workers in the New York-Newark-Jersey City and Dallas-Fort Worth CBSAs were back in the office, while office visits in the Chicago-Naperville-Elgin and San Francisco-Oakland-Berkeley CBSAs remained subdued.
But throughout the country, the reality is much more nuanced as some office buildings struggle to maintain occupancy,others are thriving. We identified four office buildings in four major metropolitan areas where the recovery in utilization was significantly stronger than the respective metro:
What sets these buildings apart from the pack?
One factor that isn’t driving the office recovery at these high-occupancy office buildings is different weekly visitation patterns.
Location intelligence for offices nationwide indicates that hybrid workers appear to prefer coming to the office mid-week: The bulk of weekly visits occur on Tuesdays, Wednesdays, and Thursdays, with fewer visits taking place on Monday and even less visits on Fridays. And this was also the weekly visitation pattern in the four CBSAs analyzed as well as in the high-occupancy office buildings. In fact, the outperforming office buildings had even more of their visits concentrated mid-week compared to the visit patterns in the wider CBSA.
It seems, then, that the higher visits to these outperforming offices is not due to more employees coming in on typical WFH days. Instead, more workers are likely coming in mid-week to make up for the lull on Mondays and Fridays.
So who are these visitors? And could they hold the key to these buildings' strong recovery numbers?
Focusing on the period between March 2023 and February 2024 reveals that in all the labor catchment areas of the analyzed Office Indexes, the share of one-person households was larger than the nationwide share of 27.5%. And during the same period, the share of one-person households in the catchment areas of the high-performing office buildings was even greater – almost 50% of households in the captured market of 2010 Flora St. in Dallas consisted of one-person households.
On the other hand, families with children were underrepresented in the catchment areas of the office indexes relative to the nationwide average of 27.1% – and the share of households with children was even lower in the catchment areas of the high-occupancy office buildings.
This indicates that those with young children at home were generally less likely to go into the office – and so the office buildings seeing the strongest post-COVID recovery are those that serve a large contingent of single employees. On the flip side, there is often a motivation for young singles to visit the office more frequently, whether driven by the desire for training and mentorship or the prospect of meeting a significant other in or around the workplace.
Much has been written on the challenging impact that return-to-office mandates can have on working parents – and especially on working mothers – so it may not come as a surprise that employees from family households are underrepresented in office buildings in 2024.
But the fact that one-person households are even more prevalent in the labor markets of the overperforming buildings (as compared to the wider CBSA Office Index) indicates that businesses and office assets can thrive even without wooing working parents back to the office.
So who are these singles driving the return to the office? Some of this segment may be made up of Gen-Zers seeking the networking and mentorship opportunities provided by an in-person office setting. But it’s not just younger workers leading the return to the office – the data indicates that executives and managers also make up an outsized portion of the outperforming buildings’ catchment areas. In all four CBSAs analyzed, the catchment area of the high-occupancy building included a significantly larger share of people in a managerial or executive role compared to the average catchment area composition of the wider CBSA Office Index.
Many of these executives are likely choosing – rather than being forced – to work on-site. Some might be looking to encourage their staff to return to the office by leading by example, while many are likely leveraging their space to host clients, driving foot traffic to these locations higher. But whatever factors are driving the trend – it appears that office buildings looking to bounce back in the new normal need to make sure they are drawing back the managerial ranks.
Analyzing the popular industries and occupations in the catchment areas of the office buildings and industries also reveals that the overperforming buildings serve a much higher share of employees working in finance, insurance, and real estate. A larger share of the catchment area population of the high-occupancy office complexes also works in professional services – including high-tech jobs – compared to the office index in the wider CBSA.
Many financial institutions and tech companies have asked employees to return to the office at least three days a week, which could explain why these industries are overrepresented in the catchment area of the high-occupancy buildings. This data may indicate, then, that while some of the foot traffic is coming from executives choosing to return to their pre-COVID work habits, the return-to-office mandates – whether full or part-time – are likely also helping these buildings stay ahead of the curve.
Although the proliferation of office vacancies across the country can make it seem like the return to office battle has already been lost, several buildings are bucking the trend. Location intelligence indicates that a combination of partial return-to-office mandates along with a larger-than-usual share of visitors from executives and non-parental households is helping these office complexes thrive.
Sweetgreen and First Watch both went public in 2021 and have since steadily increased in popularity – and in store count. So with 2024 well underway, we checked in with the two brands to see how they fared in Q1 and to explore some of the factors underlying their success.
Despite the dining challenges of much of 2023 and early 2024, sweetgreen posted impressive visits between April 2023 and March 2024, with the chain’s YoY traffic increases ranging from 21.4% to 51.6%.
The remarkable visit surge was partially driven by the sweetgreen’s significant expansion, which could explain the slight dips in average visits per location for much of 2023 while consumers around sweetgreen’s newer restaurantes familiarized themselves with the brand’s offerings. But since December 2023, YoY visits per location have been positive – with the exception of a weather-induced slump in January – indicating that the chain’s newer venues have established themselves within their community.
This narrowing of the gap between visits and visits per location may also signal the success of sweetgreen’s strategic shift towards prioritizing "quality over quantity” – slowing down expansion and investing in an enhanced customer experience.
As a salad and grain-bowl chain, sweetgreen holds special appeal for wellness-focused younger consumers, including singles and members of the coveted Gen Z demographic. But as the chain has expanded, it has also succeeded in reaching new audiences.
Sweetgreen has been explicit about its goal of reaching Gen Z consumers. And analyzing the demographic makeup of the chain’s captured market reveals that sweetgreen’s trade area includes a relatively large share of one-person households (that tend to be on the younger side) But analyzing shifts in the chain’s captured market composition over the past five years also reveals that the share of one-person households has been decreasing – while remaining above the nationwide average of 28.0% – and the share of households with children has increased. So even as sweetgreen continues serving its core consumers, the chain’s expansion has also allowed sweetgreen to reach new audiences.
First Watch is also in expansion mode, and with plans to open some 50 more restaurants this year the chain shows no signs of slowing down. And, like sweetgreen, First Watch’s expansion has driven significant growth to the chain’s overall visits – and the chain’s average visits per location numbers are up as well, indicating that the new venues are finding a receptive audience.
By staying nimble on its feet and continually changing up its menu offerings, First Watch has succeeded in differentiating itself from other breakfast chain giants – and appears poised to enjoy continued success throughout the year.
First Watch’s expansion has also helped the company reach new types of diners even as the chain continues catering to its core audience. The share of the Spatial.ai: PersonaLive’s “Upper Suburban Diverse Families” segment in First Watch’s captured market has held steady over the past five years, even as the share of the “Blue Collar Suburbs” and “Urban Low Income” segments increased. It seems, then, that First Watch has also succeeded in leveraging its store fleet expansion to reach new audience segments – without sacrificing its core patrons.
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Sweetgreen and First Watch’s expansions have helped the companies increase visits and reach new segments – without sacrificing their core audiences. What does the rest of 2024 have in store for the chains?
Visit our blog at placer.ai to find out.
The pandemic and economic headwinds that marked the past few years presented the multi-billion dollar hotel industry with significant challenges. But five years later, the industry is rallying – and some hotel segments are showing significant growth.
This white paper delves into location analytics across six major hotel categories – Luxury Hotels, Upper Upscale Hotels, Upscale Hotels, Upper Midscale Hotels, Midscale Hotels, and Economy Hotels – to explore the current state of the American hospitality market. The report examines changes in guest behavior, personas, and characteristics and looks at factors driving current visitation trends.
Overall, visits to hotels were 4.3% lower in Q2 2024 than in Q2 2019 (pre-pandemic). But this metric only tells part of the story. A deeper dive into the data shows that each hotel tier has been on a more nuanced recovery trajectory.
Economy chains – those offering the most basic accommodations at the lowest prices – saw visits down 24.6% in Q2 2024 compared to pre-pandemic – likely due in part to hotel closures that have plagued the tier in recent years. Though these chains were initially less impacted by the pandemic, they were dealt a significant blow by inflation – and have seen visits decline over the past three years. As hotels that cater to the most price-sensitive guests, these chains are particularly vulnerable to rising costs, and the first to suffer when consumer confidence takes a hit.
Luxury Hotels, on the other hand, have seen accelerated visit growth over the past year – and have succeeded in closing their pre-pandemic visit gap. Upscale chains, too, saw Q2 2024 visits on par with Q2 2019 levels. As tiers that serve wealthier guests with more disposable income, Luxury and Upscale Hotels are continuing to thrive in the face of headwinds.
But it is the Upper Midscale level – a tier that includes brands like Trademark Collection by Wyndham, Fairfield by Marriott, Holiday Inn Express by IHG Hotels & Resorts, and Hampton by Hilton – that has experienced the most robust visit growth compared to pre-pandemic. In Q2 2024, Upper Midscale Hotels drew 3.5% more visits than in Q2 2019. And during last year’s peak season (Q3 2023), Upper Midscale hotels saw the biggest visit boost of any analyzed tier.
As mid-range hotels that still offer a broad range of amenities, Upper Midscale chains strike a balance between indulgence and affordability. And perhaps unsurprisingly, hotel operators have been investing in this tier: In Q4 2023, Upper Midscale Hotels had the highest project count of any tier in the U.S. hotel construction and renovation pipeline.
The shift in favor of Upper Midscale Hotels and away from Economy chains is also evident when analyzing changes in relative visit share among the six hotel categories.
Upper Midscale hotels have always been major players: In H1 2019 they drew 28.7% of overall hotel visits – the most of any tier. But by H1 2024, their share of visits increased to 31.2%. Upscale Hotels – the second-largest tier – also saw their visit share increase, from 24.8% to 26.1%.
Meanwhile, Economy, Midscale, and Upper Upscale Hotels saw drops in visit share – with Economy chains, unsurprisingly, seeing the biggest decline. Luxury Hotels, for their parts, held firmly onto their piece of the pie, drawing 2.8% of visits in H1 2024.
Who are the visitors fueling the Upper Midscale visit revival? This next section explores shifts in visitor demographics to four Upper Midscale chains that are outperforming pre-pandemic visit levels: Trademark Collection by Wyndham, Holiday Inn Express by IHG Hotels & Resorts, Fairfield by Marriott, and Hampton by Hilton.
Analyzing the captured markets* of the four chains with demographics from STI: Popstats (2023) shows variance in the relative affluence of their visitor bases.
Fairfield by Marriott drew visitors from areas with a median household income (HHI) of $84.0K in H1 2024, well above the nationwide average of $76.1K. Hampton by Hilton and Trademark Collection by Wyndham, for their parts, drew guests from areas with respective HHIs of $79.6K and $78.5K – just above the nationwide average. Meanwhile, Holiday Inn Express by IHG Hotels & Resorts drew visitors from areas below the nationwide average.
But all four brands saw increases in the median HHIs of their captured markets over the past five years. This provides a further indication that it is wealthier consumers – those who have had to cut back less in the face of inflation – who are driving hotel recovery in 2024.
(*A chain’s captured market is obtained by weighting each Census Block Group (CBG) in its trade area according to the CBG’s share of visits to the chain – and so reflects the population that actually visits the chain in practice.)
Much of the Upper Midscale visit growth is being driven by chain expansion. But in some areas of the country, the average number of visits to individual hotel locations is also on the rise – highlighting especially robust growth potential.
Analyzing visits to existing Upper Midscale chains in four metropolitan areas with booming tourism industries – Salt Lake City, UT, Palm Bay, FL, San Diego, CA, and Richmond, VA – shows that these markets feature robust untapped demand.
Utah, for example, has emerged as a tourist hotspot in recent years – with millions of visitors flocking each year to local destinations like Salt Lake City to see the sights and take in the great outdoors. And Upper Midscale hotels in the region are reaping the benefits. In H1 2024, the overall number of visits to Upper Midscale chains in Salt Lake City was 69.4% higher than in H1 2019. Though some of this increase can be attributed to local chain expansion, the average number of visits to each individual Upper Midscale location in the area also rose by 12.5% over the same period.
Palm Bay, FL (the Space Coast) – another tourist favorite – is experiencing a similar trend. Between H1 2019 and H1 2024, overall visits to local Upper Midscale hotel chains grew by 36.4% – while the average number of visits per location increased a substantial 16.9%. Given this strong demand, it may come as no surprise that the area is undergoing a hotel construction boom. Upper Midscale hotels in other areas with flourishing tourism sectors, like San Diego, CA and Richmond, VA, are seeing similar trends, with increases in both overall visits and and in the average number of visits per location.
Though Economy chains have underperformed versus other categories in recent years, the tier does feature some bright spots. Some extended-stay brands in the Economy tier – hotels with perks and amenities that cater to the needs of longer-stay travelers – are succeeding despite category headwinds.
Choice Hotels’ portfolio, for example, includes WoodSpring Suites, an Economy chain offering affordable extended-stay accommodations in 35 states. In H1 2024, the chain drew 7.7% more visits than in the first half of 2019 – even as the wider Economy sector continued to languish. InTown Suites, another Economy extended stay chain, saw visits increase by 8.9% over the same period.
And location intelligence shows that the success of these two chains is likely being driven, in part, by their growing appeal to young, well-educated professionals. In H1 2019, households belonging to Spatial.ai: PersonaLive’s “Young Professionals” segment made up 9.6% of WoodSpring Suites’ captured market. But by H1 2024, the share of this group jumped dramatically to 13.3%. At the same time, InTown Suites saw its share of Young Professionals increase from 12.0% to 13.4%.
Whether due to an affinity for prolonged “workcations” (so-called “bleisure” excursions) or an embrace of super-commuting, younger guests have emerged as key drivers of growth for the extended stay segment. And by offering low–cost accommodations that meet the needs of these travelers, Economy chains can continue to grow their share of the pie.
The hospitality industry recovery continues – led by Upper Midscale Hotels, which offer elevated experiences that don’t break the bank. But today’s market has room for other tiers as well. By keeping abreast of local visitation patterns and changing consumer profiles, hotels across chain scales can personalize the visitor experience and drive customer satisfaction.
The past few years have provided the tourism sector with a multitude of headwinds, from pandemic-induced lockdowns to persistent inflation and a rise in extreme weather events. But despite these challenges, people are more excited than ever to travel – more than half of respondents to a recent survey are planning on increasing their travel budgets in the coming months.
And while revenge travel to overseas destinations is still very much alive and well, the often high costs associated with traveling abroad are shaping the way people choose to travel. Domestic travel and tourism are seeing significant growth as more affordable alternatives.
This white paper takes a closer look at two of the most popular domestic tourism destinations in the country – New York City and Los Angeles. Over the past year, both cities have continued to be leading tourism hotspots, offering a wealth of attractions for visitors. What does tourism to these two cities look like in 2024, and what has changed since before the pandemic? How have inflation and rising airfare prices affected the demographics and psychographics of visitors to these major hubs?
Analyzing the distribution of domestic tourists across CBSAs nationwide from May 2023 to April 2024 reveals New York and Los Angeles to be two of the nation’s most popular destinations. (Tourists include overnight visitors staying in a given CBSA for up to 31 days).
The New York-Newark-Jersey City, NY-NJ-PA metro area drew the largest share of domestic tourists of any CBSA during the analyzed period (2.7%), followed closely by the Los Angeles-Long Beach-Anaheim, CA CBSA (2.5%). Other domestic tourism hotspots included Orlando-Kissimmee-Sanford, FL (tied for second place with 2.5% of visitors), Dallas-Fort Worth-Arlington, TX (1.9%), Las Vegas-Henderson-Paradise, NV (1.8%), Miami-Fort Lauderdale-Pompano Beach, FL (1.8%), and Chicago-Naperville, Elgin, IL-IN-WI (1.6%).
The Big Apple. The City That Never Sleeps. Empire City. Whatever it’s called, New York City remains one of the most well-known tourist destinations in the world. And for many Americans, New York is the perfect place for an extended weekend getaway – or for a multi-day excursion to see the sights.
But where do these NYC-bound vacationers come from? Diving into the data on the origin of visitors making medium-length trips to New York City (three to seven nights) reveals that increasingly, these domestic tourists are coming from nearby metro areas.
Between 2018-2019 and 2023-2024, for example, the number of tourists visiting New York City from the Philadelphia metro area increased by 19.2%.
The number of tourists coming from the Boston and Washington, D.C metro areas, and from the New York CBSA itself (New York-Newark-Jersey City, NY-NJ-PA) also increased over the same period.
Meanwhile, further-away CBSAs like San Francisco-Oakland-Berkeley, CA, Atlanta-Sandy Springs-Alpharetta, GA, and Miami-Fort Lauderdale-Pompano Beach, FL fed fewer tourists to NYC in 2023-2024 than they did pre-pandemic. It seems that residents of these more distant metro areas are opting for vacation destinations closer to home to avoid the high costs of air travel.
Diving even deeper into the characteristics of visitors taking medium-length trips to New York City reveals another demographic shift: Tourists staying between three and seven nights in the Big Apple are skewing younger.
Between 2018-2019 and 2023-2024, the share of visitors to New York City from areas with median ages under 30 grew from 2.1% to 4.5%. Meanwhile, the share of visitors from areas with median ages between 31 and 40 increased from 34.3% to 37.7%.
The impact of this trend is already being felt in the Big Apple, with The Broadway League reporting that the average age of audiences to its shows during the 2022- 2023 season was the youngest it had been in 20 seasons.
The shift towards younger tourists can also be seen when examining the psychographic makeup of visitors to popular attractions in New York City. Analyzing the captured markets of major NYC landmarks with data from Spatial.ai’s PersonaLive dataset reveals an increase in households belonging to the “Educated Urbanites” segment between 2018-2019 and 2023-2024.
These well-educated, young singles are increasingly visiting iconic NYC venues such as the Whitney Museum of American Art, The Metropolitan Museum of Art, The American Museum of Natural History, and the Statue of Liberty. This shift highlights the growing popularity of these attractions among young, educated singles, reflecting a broader trend of increased domestic tourism among this demographic.
New York City’s tourism sector is adapting to meet the changing needs of travelers, fueled increasingly by younger visitors who may be unable to take a costly international vacation. How have travel patterns to Los Angeles changed in response to increasing travel costs?
While New York City is the East Coast’s tourism hotspot, Los Angeles takes center stage on the West Coast. And as overseas travel has become increasingly out of reach for Americans with less discretionary income, the share of domestic tourists originating from areas with lower HHIs has risen.
Before the pandemic, 57.6% of visitors to LA came from affluent areas with median household incomes (HHIs) of over $90K/year. But by 2023-2024, this share decreased to 50.7%. Over the same period, the share of visitors from areas with median HHIs between $41K and $60K increased from 9.7% to 12.5%, while the share of visitors from areas with HHIs between $61K and $90K rose from 32.1% to 35.8%.
Diving into the psychographic makeup of visitors to popular Los Angeles attractions – Universal Studios Hollywood, Disneyland California, the Santa Monica Pier, and Griffith Observatory – also reflects the above-mentioned shift in HHI. The captured markets of these attractions had higher shares of middle-income households belonging to the “Family Union” psychographic segment in 2023-2024 than in 2018-2019.
Experian: Mosaic defines this segment as “middle income, middle-aged families living in homes supported by solid blue-collar occupations.” Pre-pandemic, 16.0% of visitors to Universal Studios Hollywood came from trade areas with high shares of “Family Union” households. This number jumped to 18.8% over the past year. A similar trend occurred at Disneyland, Santa Monica Pier, and Griffith Observatory.
And like in New York City, growing numbers of visitors to Los Angeles appear to be coming from nearby areas. Between 2018-2019 and 2023-2024, the share of in-state visitors to major Los Angeles attractions increased substantially – as people likely sought to cut costs by keeping things local.
Pre-pandemic, for example, 68.9% of visitors to Universal Studios Hollywood came from within California – a share that increased to 72.0% over the past year. Similarly, 59.7% of Griffith Observatory visitors in 2018-2019 came from within the state – and by 2023-2024, that number grew to 64.7%.
Even when times are tight, people love to travel – and New York and Los Angeles are two of their favorite destinations. With prices for airfare, hotels, and dining out increasing across the board, younger and more price-conscious households are adapting, choosing to visit nearby cities and enjoy attractions closer to home. And as the tourism industry continues its recovery, understanding emerging visitation trends can help stakeholders meet travelers where they are.
The positive retail momentum observed in Q1 2024 continued into Q2 – as stabilizing prices and a strong job market fostered cautious optimism among consumers. Year-over-year (YoY) retail foot traffic remained elevated throughout the quarter, with June in particular seeing significant weekly visit boosts ranging from 4.7% to 8.5%.
The robustness of the retail sector in Q2 was also highlighted by positive visit growth during the quarter’s special calendar occasions, including Mother’s Day (the week of May 6th) and Memorial Day (the week of May 27th). And though consumer spending may moderate as the year wears on, retail’s strong Q2 showing offers plenty of room for optimism ahead of back-to-school sales and other summer milestones.
On a quarterly basis, overall retail visits rose 4.2% in Q2. And diving into specific categories shows that value continued to reign supreme, with discount and dollar stores seeing the most robust YoY visit growth (11.2%) of any analyzed category.
Other essential goods purveyors, such as grocery store chains (7.6%) and superstores (4.6%), also outperformed the overall retail baseline. And fitness – a category deemed essential by many health-conscious consumers – outpaced overall retail with a substantial 6.0% YoY foot traffic increase.
The decidedly more discretionary home improvement industry performed less well than overall retail in Q2 – but in another sign of consumer resilience, it too experienced a YoY visit uptick. And overall restaurant foot traffic increased 2.6% YoY.
Discount and dollar stores enjoyed a strong Q2 2024, maintaining YoY visit growth above 10.0% for six out of the quarter’s 13 weeks. Only during the week of April 1st did the category see a temporary decline, likely the result of an Easter calendar shift. (The week of April 1st 2024 is being compared to the week of April 3rd, 2023, which included the run-up to Easter)
Some of this growth can be attributed to the continued expansion of segment leaders like Dollar General. But the category has also been bolstered by the emphasis consumers continue to place on value in the face of still-high prices and economic uncertainty.
Dollar General, which has been expanding both its store count and its grocery offerings, saw YoY visits increase between 9.1% and 15.9% throughout the quarter. Affordable-indulgence-oriented Five Below, which has also been adding locations at a brisk clip, saw YoY visits increase between 4.9% and 18.8%.
And though Dollar Tree has taken steps to rightsize its Family Dollar brand, the company’s eponymous banner – which caters to middle-income consumers in suburban areas – continued to grow both its store count and its visits in Q2.
Grocery store chains also performed well in Q2 2024 – experiencing strongly positive foot traffic growth throughout the quarter. Though the sector continues to face its share of challenges, stabilizing food-at-home prices and improvements in employee retention and supply chain management have helped propel the industry forward.
Diving into the performance of specific chains shows that within the grocery segment, too, price was paramount in Q2 2024 – with limited-assortment value grocery stores like Aldi and Trader Joe’s leading the way.
Traditional chains H-E-B and Food Lion (owned by Ahold Delhaize) – both of which are known for relatively low prices – outperformed the wider grocery sector with respective YoY foot traffic boosts of 11.4% and 8.7%. But ShopRite, Safeway (owned by Albertsons), Kroger, and Albertsons also drew more visits in Q2 2024 than in the equivalent period of last year.
Fitness has proven to be relatively inflation-proof in recent years – thriving even in the face of reduced discretionary spending and consumer cutbacks. Indeed, rising prices may have actually helped boost gym attendance, as people sought to squeeze the most value out of their monthly fees and replace pricy outings with already-paid-for gym excursions.
And despite lapping a remarkably strong 2023, visits to gyms nationwide remained elevated YoY in Q2 2024.
Diving into the data for some of the nation’s leading gyms shows that today’s fitness market has plenty of room at the top. Planet Fitness, 24 Hour Fitness, Life Time Fitness, Orangetheory Fitness, and LA Fitness all experienced YoY visit growth in Q2 2024 – reflecting consumers’ enduring interest in all things wellness-related.
But it was EōS Fitness and Crunch Fitness – two value gyms that have been pursuing aggressive expansion strategies – that really hit it out of the park, with respective YoY foot traffic increases of 23.4% and 21.4%.
The week of April 1st saw a decline in YoY visits to superstores – likely attributable to the Easter calendar shift noted above. But the category quickly rallied, and with back-to-school shopping and major superstore sales events coming up this July, the category appears poised to enjoy continued success throughout the summer.
Within the superstore category, wholesale clubs continued to stand out – with Costco Wholesale, Sam’s Club and BJ’s Wholesale Club enjoying YoY foot traffic growth ranging from 12.0% to 7.4%. But Target and Walmart also impressed with 4.6% and 4.0% YoY visit increases.
Inflation, elevated interest rates, and a sluggish real estate market have created a perfect storm for the home improvement industry, with spending on renovations in decline. The accelerated return to office has likely also taken its toll on the category, as people spend more time outside the home and have less availability to immerse themselves in DIY projects.
But despite these challenges, weekly YoY foot traffic to home improvement and furnishing chains remained elevated throughout much of the Q2 – with June and April seeing mostly positive YoY visit growth, and May hovering just below 2023 levels. This (modest) visit growth may be driven by consumers loading up on supplies for necessary home repairs, or by shoppers seeking materials for smaller projects. And given the importance of Q2 for the home improvement sector, this largely positive snapshot may offer some promise of good things to come.
Some chains within the home improvement category continued to perform especially well in Q2 2024 – with rapidly expanding, budget-oriented Harbor Freight Tools leading the pack. But Ace Hardware, Menards, The Home Depot, and Lowe’s also saw foot traffic increases in Q2, showcasing the category’s resilience in the face of headwinds.
Restaurants – including full-service restaurants (FSR), quick-service restaurants (QSR), fast-casual chains, and coffee chains – lagged behind grocery stores and other essential goods retailers in Q2 2024, as price-sensitive consumers prioritized needs over wants and ate at home more often.
Still, YoY restaurant foot traffic remained up throughout most of the quarter. And impressively, the sector saw a YoY visit uptick during the week of Mother’s Day (the week of May 6th, 2024, compared to the week of May 8th, 2023) – an important milestone for FSR.
The restaurant industry’s YoY visit growth was felt across segments – though fast-casual and coffee chains experienced the biggest visit boosts. Like in Q1 2024, fast-casual restaurants hit the sweet spot between indulgence and affordability, outpacing QSR in the wake of fast food price hikes. And building on the positive YoY trendline that began to emerge last quarter, full-service restaurants finished Q2 2024 with a 1.4% YoY visit uptick.
Chain expansion was the name of the restaurant game in Q2 2024, with several chains that have been growing their footprints outperforming segment averages – including CAVA, Chipotle Mexican Grill, Ziggi’s Coffee, California-based Philz Coffee, Raising Cane’s, Whataburger, and First Watch. Chili’s Grill and Bar also outpaced the full-service category average, aided by the revamping of its “3 for Me” menu.
Retailers and restaurants in Q2 2024 continued to face plenty of challenges, from inflation to rising labor costs and volatile consumer confidence. But foot traffic trends across industries – including both essential goods purveyors like grocery stores and more discretionary categories like home improvement and restaurants – suggest plenty of room for cautious optimism as 2024 wears on.
