With all the adults over 16 now being eligible for COVID-19 vaccines, the U.S. is on track to vaccinate 70% of its population by mid to late June. The vaccination pace has been significantly increased on a weekly basis since the start back in the second half of December 2020, hitting now an average of over 3mm Americans getting vaccinated daily.
In regards to the new COVID-19 cases, after the recent drop from the pick in January new cases have been plateaued, and most recently have started to tick up a bit.
According to the New York Times, 40% of the US population has been inoculated. Using cellphone location data we wanted to examine whether the vaccination program has resulted in behavioral changes of the population in terms of returning to their pre pandemic footfall habits.
Using our proprietary data for hospital admissions, we see that there’s been a downtrend in people hospitalized for more than 3 days. More specifically, short-stay hospitalizations (1 to 3 days) spiked in early January and started to slow down in late January following a slight reversal after then. It is worth noting that many hospitals have now restarted elective procedures. For longer hospitalizations, those from 4 to 7 days, the story is different; they don’t appear to be fluctuating materially. The pattern seems to be similar for long-stay hospitalizations (over 8 days); they are slightly over from the previous bucket (4-7 days) but have been steadily decreasing over time.
Longer-stay hospitalizations are significantly lower compared to hospitalizations from 1 to 3 days? A plausible explanation is that senior people, who made the majority of COVID hospitalizations now over 75% vaccinated, it does prove the vaccines are working.
Looking at our macro footfall indices, we observe more people travelling and going out in general . Americans are now driving 47% more than they did at the beginning of the year. Traffic to hotels is 52% up since late March while restaurants traffic is up 17%.
We will keep monitoring the traffic trends as the country is reopening but so far most of our footfall indicators are encouraging we are approaching normalcy.
After a year of virus-related travel restrictions and with Covid vaccinations picking up steam nationwide, Americans are feeling more comfortable to get out of town, fact that is causing a surge in post-vaccination travel. Using our proprietary geolocation data, we can see the sudden increase in travel-related indexes, a sign that consumers are ready to travel again.
US airlines reported an increase in airfare activity as restrictions started to ease more across states. Looking at the US airports, the traffic dropped -41% in late January and progressively increased to +40% in early April compared to the week between 12/29/2020 and 1/4/2021.
For the Americans that chose to drive instead, we saw an increase in our Miles Driven index of over 40% since early February hitting up to 60% in recent days.
For the car rental companies, the story is somehow different. Big companies in the US such as Avis and Hertz forced to sell a huge amount of their vehicles to survive the pandemic. Especially for Hertz, this movement secured some much-needed liquidity since the company filed for Chapter 11 bankruptcy in the first months of the pandemic. However, the demand for rentals has increased over the last two months to the extent that it cannot keep up with the current inventory.
Rental car companies are doing everything in their capacity to cope with the recent surge in demand, but this may take a while until they can procure new cars primarily due to the chip shortages which led car manufactures to halt the production – read our blog about semiconductor shortages
Following the recent news that Ford is expected to halt production for two weeks in April due to chip shortages, and given our recent study on this exact subject few months back we wanted to take a closer look and quantify how the largest US carmakers and the industry as a whole is currently affected. Employee counts are often times the right metric produced by our foot traffic data to analyze industrial companies. Looking at the employee traffic at the US plants for the three major carmakers it is clear that we are consistently for the last seven or so months at subdued levels of production, with March being the first month showing al recovery.
What is also worth pointing out is that each manufacture has its own path to optimal production rates and these could vary by month as shown on the graph below. Worth highlighting Ford has been consistently producing more than Fiat post the covid-19 recovery, even though this wasn’t the case before.
Looking at the same employee counts but at a YoY basis (graph below) it is clear that all manufacturers are similarly affected for the most part in 2021. Having said that a YoY analysis might not be the best in this case especially for the first three months of 2021.
Focusing on 2021 production though by only looking on month over month changes for the same employee foot traffic, we can get a clearer picture on how things differentiate between the manufacturers. March was across the board a busier month than February with Ford leading the way posting a 19.9% increase. Could it be in anticipation of the April shutdowns? Perhaps since Ford was the only manufacturer of the three that recently confirmed of the April shutdowns in at least two of its factories.
Similarly to our last report we wanted to expand the analysis to not only the automakers but the industry as a whole, this time looking at the Industrial Facilities index as computed by Advan. Besides the Covid-19 effect in early 2020 and the seasonal end of year drop due to the holidays, 2021 has been a year of modest but steady growth with a small hiccup towards the end of March.
One year after the initial lockdowns and stay at home orders across the groble, Americans are now driving a lot more, as measured by our miles driven index. More specifically, the last three weeks Advan’s miles driven index captured an increase in traffic as high as 40% nationwide compared to the pre-pandemic levels in February 2020. As the vaccines are being rolled out people’s confidence is picking up and in combination with certain COVID-related restrictions being lifted and the advent of Spring and Spring breaks, everyone seems to be making up for lost travel.
The trend is the same across multiple states. Looking at the miles driven index for the heavily impacted New York, after the sharp drop in traffic down to -44% the first month into lockdowns back in April 2020, the traffic the last 3 weeks is up 24% compared to what it was pre-pandemic levels. Same pattern for Texas, one of the first states to lift almost all the COVID restrictions such as mask mandate, restaurant occupancy limits and others: the traffic is up 36% in the last 3 weeks. For California and Florida, the traffic is up 10% and 19% respectively year-over-year.
We looked at the Truck miles driven index and compared to car miles driven (Jan 7, 2020 is used here as the baseline date); shipments have remained mostly steady through the pandemic, these has not been additional capacity added, but there are no significant troughs either.
In Europe (including the UK), things are quite different as many countries enter a third wave of COVID infections and the lockdowns are being extended. In the UK and Spain, the traffic on the roads is over 60% down in the last 3 weeks compared to pre-pandemic levels. In Germany, after a busy summer with the traffic up 50%,during the last 3 weeks it dropped significantly to -46%.
It is also interesting to see what traffic at Tesla charging stations tells us. We see that traffic in charging stations materially lags total miles driven. Given that most Teslas have lower range and are used mostly for commuting, we surmise that a material portion of the added mileage is for longer trips.
It’s been a year now into full or partial lockdowns, social distancing rules and work from home as a result of the COVID crisis which unequivocally forced people to spend more time into their homes and consequently to change their shopping habits - reconsidering what is essential and therefore set new priorities on what to buy.
One of the new essentials seems to be – not surprisingly – bedding products as people seek extra comfort at home. Mattress sales soared in the second half of 2020 since many Americans decided to upgrade their sleeping setup.
On Thursday February 11, 2021, Tempur Sealy (NASDAQ:TPX) posted record revenues of $1.06bn for the quarter ending December 2020, surpassing the consensus estimate of $985mm and in the same direction as Advan’s forecast. The company said its global sales grew 21% year-over-year and their online sales in the US doubled compared to prior year. It is noteworthy that Tempur Sealy’s top line revenue and Advan’s foot traffic at its factories have a correlation of 0.85 over the last 16 quarters. The mattress maker is among others which is overwhelmed with the spike in demand caused by COVID crisis to the point that exceeded the manufacturing capacity (read our recent blog for shortages in other industries).
We looked at the foot traffic at Tempur Sealy’s factory sites and saw the traffic were almost doubled from June 2020 to Jan 2021 compared to year earlier. By using our “Trucks” product, we also saw the truck traffic hitting 202% increase in July and not falling below 150% throughout the summer, an indicator that summer months were the busiest in terms of production and order shipments. Things started cooling down a little bit since October with the traffic to fall (still up) to 60% YoY, with the trend going upwards – January 21’ closed with 112% increase in traffic compared to January 2020.
Using Advan’s factory traffic in combination with truck mobility at the same factories has proven to be one of the most accurate ways to get insights on to the company’s performance.
One of the most popular use cases of location data for landlords and developers is the site selection. Another more popular for Real Estate investors, Private Equity firms and retailers is monitoring of the performance of their assets/stores.
On a recent article published by Kate Gibson, Kroger, one of the most prominent grocers in the US, is expected to shut down two California stores to avoid offering workers ‘hazard pay’. Both of these stores are located in the Long Beach area, one is under the Ralph's franchise while the second one under Food 4 Less(both brands are Kroger subsidiaries).
When big firms like Kroger decide to close a store, they are taking into consideration many parameters; the first one comes to mind is the profitability of the store itself. Kate’s story sparkled our interest and we decided to dive into our data further to put this hypothesis to test: is Kroger closing these stores due to the ‘hazard pay’ or there are other fundamentals reasons behind it such the stores have not been performing that well?
On the first chart we have isolated all the Ralphs stores in the area and compared them to their peers nationally. There are five such stores in Long Beach with mostly the same foot traffic pattern, the majority of them is following the national average but the store located at 2930 East 4Th Street is doing significantly worse than the others. It stands out as the worst performer with more than 40% YoY drop, so if foot traffic was an indication of which store would be closing, the strongest candidate would be this.
On the second chart we have isolated the three Food 4 Less stores in Long Beach. Things are a bit clearer for this chain as the best store of the 3 ranks 48th out of the 106 stores operating nationally and the second trails at approximately the national average for the grocer. The store located at 6700 Cherry Avenue though has been lagging consistently over the last few years and ranks 75th for the last quarter while the average drop in its foot traffic is about 48% for the same period.
Even though there is a significant evidence of underperforming stores across these two brands, we cannot be certain for the reason of closure. Having said that we can have a more educated reading based on our foot traffic analysis on which are the more likely stores to close. If you want to see our full analysis and see how these two brands Food 4 Less and Ralph's compare to the parent entity (Kroger) along with the rest(more than ten grocer brands that Kroger owns) please contact us.
After the lockdown last spring that forced manufacturers from all sectors to halt production, auto makers now have to face another challenge: the global chip shortage due to the high demand on consumer electronics (laptops, gaming consoles, TVs etc.). The increased need for the technology devices along with the initial lockdowns and employee furloughs overwhelmed chipmakers and now are struggling to keep up with the surge in orders. Another factor was the faster than anticipated recovery in the second half of 2020 as several manufacturers in the sector ramped up the car production to rebound from the spring’s shutdowns and increase the chance of hitting the year’s target.
In an effort to tackle the crisis on chip shortages, carmakers announced they would cut production. Fiat/Chrysler was one of the first to idle some of its factories. It did not take long for Ford and General Motors to announce their plans to slow down the car production to deal with the limited supplies.
We looked at the data at the US plants for the 3 carmakers. In January, Fiat/Chrysler employee counts were down 35% year over year while at Ford’s and GM’s factories down 19% and 13% respectively.
However, automakers are not the only ones to face shortages in supplies. Other industries struggle too, forcing them to production disruptions. Looking at the foot traffic data to Advan’s Industrials index, we saw that employee counts have been decreasing since mid-November 2020 signaling a slow-down in production to other industries in the sector.
GameStop Corp (NYSE: GME) has been the focus of the investment community for the last couple days and for a justifiable reason. A lot has been written about the technicals of the trade and the various market participants, how they affect the supply and demand and drive the stock price. But we have decided to spin it a different way and look at the fundamentals of the issuer.
This is our second blogpost about GME, our first one back in October 2019 explored the misconceptions that can result from using location data incorrectly.
In order to analyze the fundamentals of the business we looked at the foot traffic (unique visitors to all operational stores) of the retailer since 2019. The blue shaded line in the chart represents the daily foot traffic. Patterns such as the weekly spikes are due to the fact that more shoppers visit GME stores during the weekend than on weekdays. In addition to this, the seasonality around the holidays can be easily seen (more traffic in December, for example, and a big spike on Black Friday). The chart also clearly shows us the exact dates when all stores are closed, such as New Year’s day, when the traffic goes to zero. From a macro perspective, the most predominate observation is the big drop during the COVID period and the slow recovery starting in May 2020. Note that foot traffic has not returned to 2019 levels yet. For instance, the whole month of December 2020 saw 33.68% less foot traffic than the same month in 2019.
By using foot traffic as the key input in our proprietary algorithm, we can define whether a store is open or closed at any given time. Put simply: if there are visitors in the store then we know the store is open, if there are no visitors then we know it is closed. The reality is slightly more complex than this since we don’t simply look at the visitors alone for a given day but we compare them with its historical foot traffic patterns to better define whether the store is open or close.
There are many reasons a store could be closed, for example the retailer may be renovating the property, perhaps there was an incident on the store that led to its temporary closing, or the retailer may have decided to entirely shut down an unprofitable location. In 2020, the most common scenario was temporary store closings due to COVID 19.
On the chart, the grey and amber lines represent the store counts as reported by the issuer vs the Advan store counts as implied by our foot traffic measurements. Not only is the Advan traffic a more accurate measurement of the stores operating at any given time but it is also a leading indicator. Investors can see in real-time whether the stores are open or closed with much more granular (weekly) updates than those reported by the issuer, which are typically on an approximately quarterly basis.
Foot traffic analysis for hotels around the US showed vastly different trends over the holiday season. Compared to the first week of November, hotels in Florida saw a foot traffic uptick of 20% in the week of December 22 - 28, and up 40% in the week between Christmas and New Year, as Americans flocked to warmer climates.
Colorado hotels also saw a healthy increase in traffic of 19% in the final week of the year as skiers took to the slopes over the holidays. California and Texas, however, did not enjoy the same rebound in tourist traffic. In California, hotel visitors were down 31% over the holidays and in Texas it was down over 13% compared to the start of November.
While Florida and Colorado saw spikes in tourist traffic, Texas was the busiest state for retail - specifically for malls. Compared to the first week of November, traffic at malls in Texas was up 55% in the week of December 15 - 21, and up over 35% in the final week of the year.
Florida and Colorado also saw growth in mall traffic - up 48% and 32% respectively in the week prior to Christmas, in part driven by the increased number of visitors to those states.
Airport foot traffic data from the same four states tells a similar story, with traffic at Florida’s airport climbing steadily over the holiday period and through the end of the year. Airports in Texas also saw a noticeable increase in traffic over the holiday period as Americans flew from around the country to join their families.
Despite the increased hotel traffic in Colorado, airport foot traffic did not show a significant increase. Possibly because visitors to Colorado were more likely to drive than to fly to its ski resorts.
What a year it’s been! Few people will be sad to see it go and certainly here at Advan we are excited for what 2021 may bring.
To cap off the year, we’ve listed below what we think are 5 of the most interesting mobility trends in a year full of unexpected twists and turns. We look forward to more next year!
Wishing you a restful holiday season!
Advan’s Top 5 Mobility Trends of 2020
1. We learned the real definition of ‘essential’ retail: Costco, Walmart, Home
Depot and…Amazon!
From the very start of the pandemic as we all stocked up on canned goods and toilet paper, and much of the country went into lock-down, foot traffic data clearly showed that big box retailers would be early winners. Despite restricting the number of customers in stores - and the now familiar image of 6ft-spaced line-ups outside - visitor numbers to Walmart and Costco barely fell year-over-year. At its lowest, Costco foot traffic was down 31%. More surprising perhaps was the performance of home improvement retailers like Home Depot which, from May onwards, saw an increase in foot traffic compared to last year. But the clear winner was Amazon. As more shopping moved online, the number of employees at Amazon warehouses went through the roof - as did the company’s revenues, which were up 37% in the third quarter of 2020.
2. Despite what seemed like certain death, malls look set to fight another day
Even before the pandemic, stories were emerging about a bifurcation in the fate of malls. It was becoming apparent that top rated malls were gaining ground, with lower rated malls increasingly struggling to attract customers. During the early height of the pandemic, in April and May, no malls were spared. Traffic was uniformly down almost 100% at all locations. Yet, over the past several months, despite fluctuations in COVID case numbers and vast differences in regulation across states, we have seen a steady return of visitors to many popular malls in the US. In the Fall we saw foot traffic recovering substantially. In particular outdoor malls, such as Woodbury Common in New York, saw foot traffic rebound to just 12% below last year during October. So, while they are not out of the woods yet - traffic was down an average of 45% in December for the 6 malls we looked at - this represents a substantially more optimistic outlook than many hoped for 6 months ago.
3. Even during the height of lockdown the number of miles driven by Americans hardly fell.
The Advan Miles Driven index is one of our favorite measures of human mobility. It has over 0.95 correlation with the Highways Administration estimate of miles driven. It’s used widely by macro traders as well as fundamental investors as an input for predicting demand for oil and gasoline prices. With an estimated 93% of US households owning a car, there should perhaps be little surprise at our dependency on motorized vehicles to get around. During the nadir in April, when most of the country was locked down, the average number of miles driven in the US was down 33% year-over-year. But this soon bounced back as restrictions imposed by lock-down were cancelled out by a reluctance to use public transportation. In December, miles driven were down just 9% compared to last year.
The restaurant sector was among the hardest hit but those that pivoted quickly showed greater resilience.
Many of us, when asked what we’ve missed most during the pandemic, will list having dinner or drinks out with friends among the things we most look forward to doing again. The restaurant sector has suffered more than most during the past several months. Fine dining has no doubt been the worst affected, with indoor dining all but halted or severely restricted. Yet among quick-service restaurants (QSR), those that were quick to pivot have seen some gratifying results. By making the most of patio space in the summer months, improving their online offerings, and developing easy and efficient curbside collection, chains such as Darden’s and Chipotle have managed to regain substantial foot traffic. Traffic at Chipotle was only down 34% in December, compared to 90% in April and 81% in May. Darden’s was down just 27% in September and 22% in October. Many of the changes made by the chains will hopefully carry them forward with renewed momentum as we head into the new year.
5. COVID resulted in significant migration out of New York City
In November we launched a new platform that enables easy and fast tracking of
migration around the US. REPerspectives shows us how residential patterns are
changing over time.
As one of the cities hit hardest by the virus, New York has seen a significant reversal in
its typical migration trends. In the first 6 months of 2019, New York City (specifically
Manhattan) saw a net outflow of just 2,860 people (essentially flat). During the same
period of 2020 the net outflow was 56,280 with many Manhattanites who were now
working from home and had the option to relocate, electing to leave the city. Time will
tell whether this is a permanent trend or whether the Big Apple will prove to be the
magnet it has always been.
As New Yorkers, we are optimistic that the allure of the Big Apple will return once the
virus has been tamed. And that its restaurants, bars, stores and offices will be thronging
with tourists and residents once again!
Wishing you happy holidays and a healthy and joyful new year!
Follow us on Twitter and LinkedIn.
There is no question that a segment of retail has moved online this year. Offline (i.e.in-store) credit and debit card spending is down 15% year-over-year versus total spend according to transaction data from ConsumerEdge.
Foot traffic at consumer discretionary store locations is also 20% lower year-over-year than foot traffic to production locations for consumer discretionary retailers.
These parallel trends show us that foot traffic trends at store locations closely reflect offline spending, while traffic at production facilities gives us a window into total spend - both online and offline.
The number of visitors at consumer discretionary businesses is a good bellwether for activity since it gives us insight into how willing people are to travel for non-essential goods.
Another useful measure of activity is our Miles Driven index, which correlates at approximately 0.90 with the Highway Administration’s miles driven estimates.
When we compare miles driven data with consumer discretionary foot traffic we notice an interesting trend. While the number of miles driven has been more or less flat over the past 3 months - down only 4% year-over-year - in November consumer discretionary foot traffic was down 30% due to a renewed lock-down measures across the country.
So US residents are moving around the country but they are visiting stores in much lower numbers than we would normally expect at this time of year.
Another discretionary activity that has been highly effected by the pandemic is restaurant visitation. These have been among the most affected businesses and we see a very strong mirroring of foot traffic trends to restaurants compared to consumer discretionary retailers.
In November, restaurant visitation was down 31% year-over-year and consumer discretionary foot traffic down 30%. While this is a fairly big drop, the year over year trends have been very steady over the past several months since May, providing signs of hope that this second wave of lock-downs will not have as a dramatic impact as the first.
Advan analysis of footfall at US airports shows a gradual upward trend in traveller numbers, although volumes still remain significantly depressed compared to March.
Comparison with TSA screened passengers shows a very high correlation over time, of over 99%. This means that foot traffic data provides almost 100% confidence in showing the number of travelers passing through airports in the US.
After months of travel restrictions and lockdown, there is some hope on the horizon for hotel chains such Hilton. Foot traffic is a very accurate measure of performance for hotels, as well as for cash-heavy businesses such as casinos.
For such type of companies tracking performance by transaction data is tricky, due to the fact that the booking date is different than the visit day and hotels have to book the revenue when the patrons visit the hotel, not when they book it (by GAAP standards). Rooms are typically booked in advance but can also be cancelled up to 48 hours in advance. Also, the common use of third party travel sites for booking rooms makes it difficult to allocate transactions to the correct hotel accurately
Mobility data based on visitors to a hotel provides very high confidence that a transaction has taken place and revenue will be captured.
Taking Hilton Group as an example, on a year-over-year basis foot traffic and revenue have consistently proven to have a correlation of almost 0.95. During the second quarter of this year both revenues and foot traffic for Hilton were down almost 80% compared to Q2 of 2019.
In Q3 both recovered steadily and were only 60% down year-on-year, offering hope that as mobility returns, revenues will do so as well.
Another business that has shown a very close relationship between foot traffic and revenues is Bed, Bath & Beyond (BBBY). Year-over-year correlation between revenues and traffic to stores is almost 0.87. This suggests that customers to Bed, Bath & Beyond have a strong intention to buy when they visit a store.
Like many retailers, foot traffic at BBBY dropped to 80% below the previous year during the first phase of lockdowns in Q2. In the third quarter it rebounded to just 40% down year over year. Revenues were flat compared to the previous year, as the retailer also ramped up its online offering and curbside pick-up.
Malls around the US suffered a significant blow during what is usually the busiest shopping weekend of the year. Foot traffic was down 41% year-over-year on Black Friday and 45% on Saturday.
As we reported in our blog post last week, there was a pick-up in traffic during the first three weeks of November as many people opted to take care of their shopping sooner, in order to beat the rush and in anticipation of lock-down orders across the country. Indeed, earlier in the week - Monday through Wednesday - foot traffic was down around 32% on average compared to 2019.
Looking at the data across different states we also see significant differences, with New York and California suffering far greater losses in foot traffic numbers than Florida and Texas. Likely a reflection of differing restrictions to movement as well as consumer attitudes.
Many retailers will have offset the loss in customers at their locations with online spending, which is estimated to be up 22% . But fewer customers in stores means fewer point-of-sale purchases and less spontaneous, unplanned spending as customers focus on bargains available online.
While all retailers have been adjusting and improving their online offerings this year, one consistent winner continues to be Amazon. The behemoth has seen the number of employees in its warehouses up an average of 139% year-over-year each month since May.
With a new phase of lockdowns beginning across the US, many shoppers have opted to get a jump on Black Friday over the past week. Foot traffic to malls increased steadily across most states other than Texas where case numbers have climbed significantly, although lockdown measures have not yet been imposed. Mall visits in Texas have remained more or less flat since the start of the month.
Florida saw a week-over-week increase of 7% in mall traffic, on top of a 3% increase in the prior week.
California, which has seen more restrictive lockdown orders as a result of spiking case numbers, saw a 3% increase in mall traffic over the past week, compared to a 7% increase the previous week ahead of the current restrictions.
In New York, restrictions have been focused on curbing cases driven by ‘bars, restaurants, gyms and house parties’, according to state governor Cuomo. As an indicator for shopping trends, mall foot traffic in the state suggests that NY state residents are still keen to spend; it was up 5% last week and 3% in the previous week.
It remains to be seen how lockdown measures will affect Black Friday in major shopping districts, Advan will be tracking foot traffic to malls and other retailers with only a 1 day delay in reporting. Stay tuned for further updates after what is normally the biggest shopping weekend of the year.
With the UK now in its second week of nationwide lock-down we are starting to see some familiar patterns of behavior based on analysis of foot traffic data. But there are also some significant differences compared to the first wave.
We looked at 5 indices for key sectors. All of our comparisons are against the average footfall in January 2020, as a pre-COVID benchmark.
In April, when the majority of businesses were closed, foot traffic fell by 80% or more across almost all sectors, with the exception of those in our food stores index. Traffic at supermarkets fell by just 35% in April and soon recovered. During September it was flat and in October up 4% compared to the start of the year.
Traffic to restaurants, clothing & accessories retailers and general merchandisers also saw some respite during the summer months as lock-down eased and people embraced more freedom to shop and travel. Visitors to these merchants was around 10 - 15% below January during the August - October time frame.
Furniture stores have been a clear winner during the pandemic, as people spruced up their living space and created home offices. From a drop in visitors of 100% in April and May the sector rebounded, with foot traffic in October 24% above January.
In November, however, as we would expect given the new lockdown rules, visitor numbers have plummeted again across the board. Yet, if we compare the fall in traffic this month with the trends back in April, we notice markedly different attitudes towards the restrictions.
Our clothing and accessories index is down 51% in November to date, compared to a fall of 87% in April. General merchandise is down 38%, compared to 69% in April. Restaurants are down 47%, compared to 81% in April.
There are likely a couple of important things at play. First, the restrictions are not as stringent as they were during the first lock-down. Secondly, after 8 months of living with the virus, retailers and consumers have adapted their services and behavior to enable a better balance between keeping populations safe and enabling businesses to operate and survive.
Among the many social and cultural changes that the pandemic has brought about, arguably the most impactful will be the ways in which it has influenced our decisions about where to live. Not just temporary relocations while we ride out lock-downs and WFH, but permanent migration that will alter how we live and how we spend.
Mobility data allows us to see these patterns in almost real time and our recently launched REPerspectives portal allows us to easily visualize where people live and where they are moving to, at any census level.
Let’s take a look at some pattern changes, starting at the state level.
With Manhattan as a financial center, New York faced huge changes to its mobility patterns as soon as lock-down was imposed. Between January and July of this year, half a million adults migrated out of New York state, while its net outgoing migration (those moving out minus those moving in) was 11,500; for comparison in the same period in 2019 there was a net influx of 45,500 adults. This represents a 125% net change in behavior. The primary destinations were New Jersey (6%), Connecticut (2%) and Pennsylvania (3%), with Massachusetts, North Carolina, Virginia, California and Texas all seeing an influx of New York state residents.
Looking at the county level - for New York county (Manhattan) and over a longer period, during the period January 2019 to July 2019 most migrations form the city are to Brooklyn, Queens and Long Island, with some also going to New Jersey, Westchester, Connecticut and Florida. Counties in blue are those who had a net inflow of residents FROM New York City. Those in red saw net outflows TO New York.
Looking at the same picture for 2020 we see a much broader dispersion, with many more residents moving to other counties outside of Manhattan across New Jersey, Connecticut, upstate New York and to Pennsylvania, as well as down to Florida.
This data is for the first 6 months of 2020, so it likely signals just the beginning of a longer term trend out of urban centers like Manhattan to suburbs and smaller towns, where the normalization of home working is starting to alter the way we think about location, commuting and quality of life.
After a dismal April and May, when casinos across the country were closed to visitors, Nevada’s casinos have been slowly recovering. But although many casinos on the strip are now open, foot traffic remains depressed - down 40% year over year in October to date. Around the country, the pace of recovery for the sector has varied significantly by state.
Missouri’s casinos were the first to jump back. As early as June, foot traffic was only down 50% compared to the previous year. While in New York, even through August, traffic was down 100% year over year with casinos closed throughout the state.
Fast forward to October and the picture looks quite different. Traffic at New York casinos is now down only 39% from last year. Missouri is down only 25%, and New Jersey down 33%. Nevada has been the slowest to recover, perhaps because it relies more on tourist traffic compared to casinos in other states, for whom a greater portion of business comes from local visitors. The cancellation of conventions in Las Vegas has also had a significant impact on overall traffic to its hotels and casinos.
With regulations varying around the country as states work to control the pandemic, foot traffic data is the most accurate way to understand trends for cash-centered businesses like casinos.
Please contact info@advan.us for additional insights into this sector or for more information about our location data and analytics.
In our recent webinar, we spent some time looking into foot traffic trends at airports in America and Europe.
Location data is a very reliable proxy for airline passengers, since there are few reasons to be at an airport other than to board a plane. Precise mapping can filter out people who have come to collect or drop off passengers from those who have passed security in order to catch a flight.
We compared our foot traffic data for the major US hubs with the number of passengers reported as screened by the TSA and found a correlation of 0.9.
It’s no surprise that air travel is significantly down due to the pandemic. But our data does offer a glimmer of hope for airlines. While foot traffic to the major US hubs remains down 75% year-over-year so far in October, this represents an increase in travelers of 350% since the nadir in April.
By comparison, we also reviewed traffic at European airports. Overall, European air travel saw more of a pick-up during the summer months than the large US airports. This makes some sense. With inter-continental travel restrictions eased, many Europeans took advantage and went on vacation in July and August.
Athens airport in Greece briefly saw it’s traffic return to pre-pandemic levels, although it has dropped again since September. Barcelona airport, by contrast, barely saw an uptick in passengers before a resurgence of cases in Spain meant restrictions were reimposed.
For more information on travel trends, or to learn about how we calculate correlations please contact info@advan.us
In a previous blog post we talked about how the home improvement sector has been one of the bright spots in the pandemic. Year-over-year foot traffic to building material retailers was up 26% in September.
Given this trend, we wanted to look in more detail at one of the most popular companies in the home improvement sector - Ikea.
While foot traffic at Ikea stores fell to 0 between April and June, once stores reopened traffic rebounded almost immediately to pre-pandemic levels. In September traffic at Ikea stores in the US was up 3% year over year, and in October month-to-date it is trending up 9% year over year.
As with many trends during the pandemic, the overall numbers only tell part of the story. We can break down traffic by state to see how visit numbers vary around the country. Comparing Florida (red), New York (Green) and California (grey) we can see big differences in the trends.
Florida, which was early in easing lock-down restrictions saw the fastest and biggest surge in customer. These number fell again once cases started to rise in late summer. New York’s recovery was more gradual but today visitor numbers have recovered almost as much as Florida. California has also come back slowly, though not nearly as much as Florida and New York.
The beauty of location data is that it enables you to drill down to any level of detail. Beyond state level trends, we can look even more closely at a specific location in New York. The Ikea in Red Hook Brooklyn - the flagship location for the area. Overall foot traffic for this Ikea location was down 45% year over year. We wanted to know why.
In the map on the left hand side - showing September 2019 - you can see where people come from to shop at this store - the True Trade Area. The map on the right shows the Trade Area in September 2020.
This visualization clearly shows where the drop in customers has occurred. A significant portion of shoppers who previously traveled from Manhattan to Brooklyn to visit Ikea are no longer making the trip.
There could be multiple reasons for this. Many of those who are lucky enough to be able to do so have elected to leave Manhattan and work from their weekend home. Some have left the city altogether. Our analysis of residential patterns suggests that there has been significant flight out of New York City. Ikea tends to be a first stop for people moving into small city apartments, and this September there have been far fewer new arrivals to the Big Apple than in previous years.
There’s no question that the retail sector has been hit hard this year. Foot traffic at Macy’s, which was already struggling prior to the pandemic, was down 64% last quarter compared to the same quarter in 2019.
Like many of its peers, Macy’s has relied on its online business to bolster revenues during a period when many of its stores were closed.
But, although overall sales have slumped, an interesting trend has emerged for those who do visit stores. When we analyzed Macy’s conversion ratios using our traffic data and Consumer Edge’s transaction data – that is, the ratio of people who visit stores (foot traffic) to those who actually buy in the stores (what we call the number of Transactions), as well as foot traffic compared to total offline sales (in USD), we notice a distinct upwards trend. The chart shows the year-over-year change for both of these ratios.
For the most recent calendar quarter, ending September 30, we can see that the year-over-year change in the number of transactions is 4.4% greater than the change in foot traffic to Macy’s stores - i.e. if people are coming to stores then they are much more likely to buy something. Similarly, the difference in offline sales revenues compared to foot traffic is 3.4%, showing that customers who go to stores are there to spend money. We included the trend over the last couple of years to make sure we are not looking at any seasonal aspects; clearly the conversion is as high as it ever was in recent quarters.
While retailers are focusing on their online offerings, it’s worth noting that customers who come to their stores are likely their most loyal and that for some people the shopping experience cannot be replicated on the internet!
For more information please contact info@advan.us
For investors, foot traffic data is fast becoming a critical weapon as part of an alternative data armory. The value of tracking real-time visitation numbers to retail and consumer-facing compa-nies is widely recognized. Yet, as we explore here, measuring traffic to industrial companies can offer even more effective signals to predict top line performance.
It is intuitive that the number of employees at production facilities should be an indicator of pro-duction, which in turn would help forecast revenues. But production tends to be a leading indica-tor. This means that the correlation between the number of employees at a facility, for example a factory, and revenue is not always visible when overlaying the two data series.
If instead we consider seasonality - and there are seasonal patterns to many consumer purchas-es - and compare the datasets on a year-over-year basis, we start to see much clearer correla-tions.
As an example, we looked at Carlisle Companies (NYSE:CSL), a $7 billion market cap manu-facturer of engineered products. As the chart below shows, we found a 0.92 correlation on a year-over-year basis between the number of employees at Carlisle’s facilities and the company’s top line revenue.
In the second fiscal quarter of 2020 analysts expected revenues of $988 million. Advan’s fore-cast based on foot traffic was $998 million, and actual revenue was $1.02 billion. The revenue number was 22% below the same quarter last year and the number of employees Advan meas-ured was down 24.8% during the same period. The stock closed at 122.65 on July 21st, before the announcement, and opened at 124.15 the next morning.
Next, we looked at Worthington Industries (NYSE: WOR), a metals manufacturer headquartered in Columbus, Ohio, with a market capitalization of approximately $2.2bn. For WOR, the average year-over-year correlation between the number of employees and company revenues was 0.95.
On September 23, the company announced an earnings miss. Company revenues were down 35% year-over-year with Advan employee foot traffic down 19%.
Join our webinar: Company and Sector Recovery Analysis - Thursday October 8, 2020 @ 12pm EDT.
For more information please contact info@advan.us
Are you back in the office? It’s a question many of us find ourselves asking our friends and peers. The answer is, it depends. Each has their own comfort level, and it also depends largely on their role and their employer.
Morgan Stanley announced in May that it would start bringing traders back to the floor in June. Most recently, JP Morgan made a similar announcement - those in sales and trading roles returned on September 21.
Yet, despite some of the headlines, the return to work has been slow and very selective.
Looking at foot traffic for 5 of the largest banks, we see very similar patterns. The chart above shows the percentage change in average traffic by month, compared to February 2020. For all of the banks we analyzed, foot traffic in April was down by over 90%.
Numbers have been creeping back up, but very slowly. Goldman Sachs employees seem to have been most keen to return, but foot traffic in September was still 68% lower than in February, suggesting that about 32% of its employees are back at their desks. This compares to 30% for Amex, 29% for Citi and just 20% for Morgan Stanley.
An alternative way to visualize the trends is by looking at the speed of return: comparing employees to April – the nadir for foot traffic.
In terms of return speed, American Express’ headquarters was up almost 300% in September compared to April. At the other end of the scale, Morgan Stanley was up just 76% this month from April’s low. Given the attention that Morgan Stanley received as one of the earliest banks to send its traders back to the floor, the data suggests that beyond those in trading roles, very few employees are back at MS headquarters.
Join our webinar: Company and Sector Recovery Analysis - Thursday October 8, 2020 @ 12pm EDT.
For more information please contact info@advan.us
What does a COVID recovery look like for businesses? 6 months after the initial lock-down we know that, in the US, the journey has been remarkably different for different types of businesses.
Our foot traffic indices capture trends that show just how varied the path has been. We looked at the percentage change in foot traffic for 5 different sectors during each month of this year.
Starting in March, of those we analyzed, the sectors most quickly impacted were clothing & accessories. With the majority of stores closing across the country, during May foot traffic was 95% down year over year. Clothing business have seen a slow recovery, but even this month traffic remains 30% lower than last September.
Our food stores index - which is made up primarily of grocery stores - saw a small spike in March, and has remained essentially flat or slightly down since then. Increased demand for food due to people staying home was likely counterbalanced by a reduction in the number of people allowed in stores, and an increase in click-and-collect services now offered by many grocery stores.
As has been widely reported, restaurants have also been substantially impacted over the past several months. The tentative recovery over the summer was due largely to the expansion of patio dining. As the weather starts to cool, and especially if there is a second wave of the virus, we anticipate restaurants being among the most affected businesses.
Our motor vehicles index shows the number of people visiting car dealerships. At the nadir in April, visitors to car dealerships were down 15% year over year. Since then, traffic has recovered and in September to date traffic is down just 3%. In our last blog post we dug into how car dealership visitation has varied by automaker and by state.
The building materials index has been a notable outlier, with foot traffic consistently increasing year over year. A result of the home improvement and gardening boom during lock-down. As of last week, foot traffic to building material stores was up 26% year over year.
A recent article on Wall Street Journal by Peter Grant took an insightful look at how truck stops in the US have been boosted this year, in part due to the increase in demand for e-commerce and delivery.
Travel Centers of America (NASDAQ: TA), the largest publicly listed operator of truck stops in the US, saw its share price increase 50% following its quarterly earning announcement in early August.
Anyone tracking foot traffic trends to TA would likely not have been surprised by this jump. The chart below shows foot traffic to all TA locations in the US. During lock-down, traffic fell to by 30% compared to pre-COVID levels at the start of the year.
On July 6, however, one month before its earnings announcement, the company's stock closed at $12.42 having fallen 44% since mid-June. Yet foot traffic in the week of July 6th - 12th was just 11% below the pre-COVID levels seen in the week of March 6th -15th, a strong indicator that business was resuming, and a leading indicator for share price performance.
For more information please contact info@advan.us
As we near the last stretch of the US summer season, we looked again at foot traffic data for US airports as one measure of the impact being felt by the travel industry.
In our blog post on June 19th, we noted that traffic at US international hubs was severely depressed, with some regional hubs seeing a little more activity.
As a key indicator of overall air travel, the chart below shows foot traffic at all US airports. The big trend is clearly the steep drop in March as the US border closed, and cities and states around the US shut down, with many restricting travel from other states.
In late May we did start to see some pick up in activity, which gathered momentum in June, albeit remaining well below pre-covid levels.
Most recently, however, over the last 2-3 weeks with case numbers rebounding, airport foot traffic has flattened again and is steady at levels way below the normal for this season.
For a more detailed breakdown of airport foot traffic such as by state or by specific hub please contact info@advan.us.
Heading into earnings season we reviewed foot traffic data at four major hotel chains to help provide insights into likely company performance. We looked at Extended Stay America (STAY), Choice Hotels (CHH), Marriott (MAR) and Hilton (HLT) and compared the percentage change in stock prices over time with the average percentage change in foot traffic for the same period.
From the second week of February all four of the chains we analyzed saw a steep and prolonged fall in stock price through to the first week of April, when they began to rebound. Extended Stay America in particular has experienced a healthy share price recovery, with its stock back to only 10% below where it was in February, which is worse than S&P’s 0.9% gain but better than its competitors; Marriott’s share price is still 40% lower than it was pre-COVID and Hilton’s hovering around -30%.
Both STAY and CHH have weathered the pandemic better than MAR and HLT. This may be due to the nature of their properties, which typically cater to domestic and local customers, at more affordable rates. With significantly reduced overseas travel, few tourists able to visit the United States and business travel severely limited, chains like Marriott and Hilton, which rely more on high end and especially international business travelers, have seen their client base decimated.
Foot traffic data for the four chains shows a similar trend to share price, though with much more pronounced differences. At its lowest point, foot traffic at STAY properties was only 33% below pre-COVID levels. Foot traffic at CHH properties fell more, to 50% below February levels, but has recovered faster and is now at just 10% below February.
Compare this to HLT and MAR which, at their lowest, saw foot traffic at 80% below pre-pandemic levels and even now are still 40% and 50% down respectively. The markets seem to have priced this in to a certain extent, but the restrictions on travel, and business travel in particular, look to remain in place for a prolonged period, which may have a longer term effect on the more international chains. With Americans vacationing close to home, local and domestic chains may start to see a rebound over the coming period.
For more detailed foot traffic analytics, within one day, please contact info@advan.us.
As a continuation of our previous analysis Path to Recovery Far from Clear, we updated the data to show how the foot traffic trend at consumer discretionary businesses varies in three states: California, New York and Texas.
The US faces a deep coronavirus crisis as new cases are surging to record highs in many states.
Texas was one of the first states to reopen in May with restaurants, retail stores, malls and even theaters to allow to reopen at limited capacity. Looking at the mid-May data, the foot traffic in Texas at Advan’s consumer discretionary index was down about 35% compared to the pre-COVID era and kept increasing through mid-June, adding a 15% increase to -20%.
Meanwhile, New York, that used to be the epicenter of the pandemic back in March and April, has been adding lately around 700 cases daily. It is the only state out of the three we studied that has had observed the deepest decline on the consumer discretionary index but it is also the only one that has been recovering at a somewhat steady rate, currently standing at -39% compared to pre-COVID days.
California stands somewhere in the middle with a plateaued recovery over the last month or so that more recently has turned negative and currently stands to approximately -45% of where it used to be in the pre-pandemic period.
The RV market in the US looks like it may have found a new client base during the pandemic. As reported by the New York Times, companies like Cruise America, the largest RV rental company in the US, typically count on overseas visitors for about 40% of their bookings. The majority of these visitors usually come from Europe and with borders closing, rentals fell steeply. Foot traffic to rental locations was down over 40% in April compared to the previous year.
With US residents now facing a summer of travel restrictions, the RV sector is seeing a rebound. In June foot traffic to locations renting RVs was only 13% lower than last year, and climbing - a good proxy for overall rentals. The majority of this recovery has almost certainly been due to increased interest from Americans, looking to make the most of their staycations and explore their country in a socially distant and safe manner.
With COVID cases rising again in Southern and Western states, the Washington Post reported that many hospitals are under renewed strain, with beds being filled to capacity.
In order to measure the true number of hospital admissions, we have developed an algorithm that can track overnight stays for any period of time (by excluding staff and visitors).
The chart below reflects the critical situation that hospitals are facing in light of rising case numbers. In June, South Carolina hospitals saw a 64% increase in admissions of between 3-7 days compared to last year. In Arizona the increase was 38%.
Looking more closely at the near-term data, the following chart shows the percentage change in overnight stays of longer than 3 days since the second week of March.
All five states that we analyzed are showing a clear increase in admissions, with Mississippi up 80% in mid-June, compared to March, and South Carolina up 58%
The overnight stay data is key, because it filters out outpatient visits and other intra-day traffic, offering a truer measure of the strain that hospitals are experiencing in states where COVID cases are growing.
When we looked at total foot traffic for hospitals in the same states, the trend was reversed. With fewer elective procedures and widespread restriction on the number of visitors in hospitals, overall foot traffic was down year-over-year in every state. This further reinforces the dramatic increase in hospitalizations over the past month, since the majority of these admissions are likely to be COVID-related and not due to other procedures.
Can you please send me information about the hospitals? contact us.
For our fourth post in our summer series, we switch to what we would broadly term essential retailers. Big box stores such as CostCo and Sam's Club were early winners in the pandemic era as many of us stocked up in preparation for an anticipated period of lock-down.
Below, a chart for Costco foot traffic since January shows a familiar story. A peak in late March, followed by a drop through April, as lock-downs were imposed and stores restricted the number of people who could enter. Traffic has leveled off, though remains around 10% below January levels.
Sam's Club shows a very similar pattern, though traffic has recovered to and increased over 14% versus January, having dropped less during April at only 20% below January even at the nadir.
Foot traffic at Pharmacies such as CVS showed a similar trajectory to the Big Box stores, though much less pronounced. Perhaps because the kinds of products bought at pharmacies do not need to be replenished as frequently.
One clear winner during this period has been Amazon. Shelter in place orders have driven a spike in online shopping and the massive growth in employees at Amazon warehouses confirms the extent to which the retailer has benefited.
In our final post of the series we'll share some unique insights on how best to predict the likely forward trajectory of COVID-19.
For more detailed data please contact us directly contact us.
For our fourth post in our summer series, we switch to what we would broadly term essential retailers. Big box stores such as CostCo and Sam's Club were early winners in the pandemic era as many of us stocked up in preparation for an anticipated period of lock-down.
Below, a chart for Costco foot traffic since January shows a familiar story. A peak in late March, followed by a drop through April, as lock-downs were imposed and stores restricted the number of people who could enter. Traffic has leveled off, though remains around 10% below January levels.
Sam's Club shows a very similar pattern, though traffic has recovered to and increased over 14% versus January, having dropped less during April at only 20% below January even at the nadir.
Foot traffic at Pharmacies such as CVS showed a similar trajectory to the Big Box stores, though much less pronounced. Perhaps because the kinds of products bought at pharmacies do not need to be replenished as frequently.
One clear winner during this period has been Amazon. Shelter in place orders have driven a spike in online shopping and the massive growth in employees at Amazon warehouses confirms the extent to which the retailer has benefited.
In our final post of the series we'll share some unique insights on how best to predict the likely forward trajectory of COVID-19.
For more detailed data please contact us directly contact us.
In this third blog post of our summer series, we review two different measures of economic activity that can help paint an overall picture of consumer trends.
Measuring foot traffic at consumer discretionary businesses helps us understand the extent to which people are back to shopping for non-essentials - an indicator for increasing flexibility of movement and confidence in the outlook.
During April and May there was a massive year-over-year drop in visits to non-essential locations. This make sense given most stores were closed. As you would expect, this trend was most pronounced in states such as Nevada and New York. In California, and especially in Florida, the fall was not as dramatic. Even in April, foot traffic to consumer discretionary businesses in Florida was only down 55% year-over-year, compared to almost 80% in Nevada.
Looking at June, there are very clear signs that consumers are back in stores. New York still lags. But in Florida foot traffic is now only down 25% compared with this time last year. Heading into July, with a new outbreak of cases in the state, we will see whether the trend continues.
One measure that can often be a leading indicator for growth is factory traffic. If goods are being manufactured, this often - though not always - reflects demand along the supply chain.
Below we looked at foot traffic for two different factories - GM (autos) and Domtar (paper products).
While GM saw a clear and steep halt in foot traffic during the height of lockdown in March and April with factories halting production, Domtar saw a spike given the increased demand for paper products.
Fast forward to June and both factories have resumed normal activity as indicated by foot traffic levels returning to levels consistent with this time last year. It seems we have stopped hoarding toilet paper, and the automotive industry is optimistic that we will be back on road with renewed enthusiasm. Our data on miles driven in the US indicates they may be right.
In our next post we will review sectors that provide staples such as food and drugs.
For more detailed data please contact us directly contact us.
In this second post based on data from our summer webinar, we reviewed the sectors at the heart of the tourism industry - hotels, restaurants and casinos.
We had previously analyzed hotel foot traffic in multiple states. You can read our full analysis in a previous blog post here. Just to recap, in the majority of states hotel foot traffic remains well below average, pre-pandemic levels. The exception is South Carolina, where hotel traffic has returned to levels 5% above the start of the year.
Drilling down to a more specific resort, we reviewed overall foot traffic for casinos in Nevada. Many casinos opened earlier this month and the chart below shows the spike in traffic, up from zero in April and May.
Yet, the uptick remains small. Foot traffic is still over 75% down year over year.
Finally in this category we looked at hotels and restaurants in Florida. With restrictions lifted early in the state, and given its popularity as a vacation destination, hotel traffic has seen a steady rise since mid-April. As of the third week of June, traffic in Florida hotels was 43% below the start of the year. Though with case numbers rising again over the past several days we may see a reversal of the trend as we head into July.
Restaurants in Florida have followed a very similar trend line to hotels, though fell relatively less with average foot traffic only 26% below January levels.
Stay tuned for our next post, in which we'll look at consumer discretionaries across various states and factory traffic as an indicator for recovery.
For more detailed data please contact us directly contact us.
Last week we hosted a webinar where we dug into some key data to help understand and predict trends for the travel and tourism sectors as we head into the summer.
Since Europe was locked down earlier than North America, it has also started opening up sooner. As a comparison, we looked first at foot traffic in European airports to see whether there are any early signs of a pick-up in visitors coming into the peak holiday period.
Overall traffic remains fairly depressed, but there are some signs of growth, particularly in Greece, which depends heavily on tourism income. Foot traffic at Athens airport was still around 78% below the first week of January, but has seen a sharp uptick in the past week.
As a comparison, we looked at the major international US airports. Traffic at these remains down significantly -- even below mean levels at the European airports we analyzed. Chicago O'Hare is showing some early signs of increasing visitor numbers, but even here, foot traffic is down 75% compared to the start of the year.
We were also interested in comparing traffic at US regional airports, to see whether there might be indications of more domestic travel, as a substitute for international travel.
Here we did see a bit of a different story, at least for a couple of airports. New York La Guardia and Chicago Midway have both seen a clear increase in traffic over the past 2-3 weeks. Visitors to La Guardia were now only 42% down from January, and to Midway, 47% down.
While Americans and Europeans are still holding back from flying, the story on the ground is quite different. Our miles driven index shows that there is little or no reluctance to get behind the wheel. In June, miles driven in the US was back to the same levels as this time last year.
On a state by state basis the story is a little different. Miles driven in Texas has recovered to levels above those a year ago. In New York the numbers are in line with this time last year, and in California residents are still holding back somewhat from driving.
Interestingly, over the past week in Texas and California - states that have seen a rebound in COVID cases - the miles driven index has suddenly started trending downwards again. A likely indicator that people are starting to get nervous again about leaving the house and resuming normal activity.
Please stay tuned for more insights for our webinar over the coming days!
In the past week, many states have started to see a resurgence in the number of COVID cases. In response to the need for more accurate data to monitor the pressure being placed on hospitals around the country, we have significantly enhanced our data on hospital admission.
Our data is now more precise and, crucially it can also be broken down to show overnight stays over over 3 days to give a true picture of the number of beds being used.
Reviewing the data we can see that admissions in Texas and Florida are up on a year-over-year basis, indicating that state openings have had a material impact. Hospitals are feeling the strain, with admissions higher than they normally handle. New York by comparison is still 12% down year-over-year.
The picture is much bleaker when we filter for overnight stays 3 days or longer, with Texas and Florida 40% up since last year and New York close behind. This suggests that on the front lines, hospital workers are already feeling the pressure of the rebound in cases.
Please contact us with any questions about the data or to learn more.
As one of the sectors hit hardest by the pandemic, hotels, resorts and leisure facilities are hoping that the summer may offer a recovery in the form of reduced case numbers and fewer cancelled vacations. A critical period for the industry, a bounce back in July and August could help mitigate some of the losses from the past few months.
Our analysis of foot traffic, using our Hotel, Resort and Leisure Index, shows a very mixed picture across different states. The chart below shows the percentage change since the first week of 2020 for 5 key states: California, Florida, Nevada, New York and South Carolina.
Relying heavily on tourism, Nevada was the hardest hit of the states we analyzed, with foot traffic for this critical sector falling almost to zero from mid-March through the last week of May. At the end of May, however, many casinos started to reopen and the state saw a sharp uptick in traffic. As of last week, foot traffic was 60% below January levels - still low, but a significant improvement from three weeks earlier.
South Carolina, in contrast, at its nadir saw a drop of only 60% in foot traffic to hotels and resorts and has rebounded quickly, recovering to 5.6% above January levels.
Florida has also seen a steady recovery. Having fallen to 80% below January traffic, last week it had only 40% less traffic than levels at the start of the year as we head into the key vacation period.
New York and California have experienced a much slower return for visitor numbers. New York in particular continues to have the most depressed foot traffic numbers - still 65% down, with California 50% down.
Senior executives at the major hotel chains, such as Hilton Worldwide CEO Christopher Nassetta have talked about the impact that reduced business travel will have on their business in the medium term. If the tourism sector continues its tentative recovery over the coming weeks, it may hopefully bring some reprise to Hilton and its peers. We expect continued differences, however, between states as recovery rates and resurgences differ significantly across the country.
Join our webinar: Recovery or Relapse? Thursday June 25, 2020 @ 11am EDT
Earlier this week we shared our global Sector Tracker that analyzes recovery trends by highlighting the sector with most week-over-week growth in each country. Last week, in the US, it was the transportation sector the had seen the biggest uptick in activity, based on our analysis of foot traffic at key locations. Since a significant share of traffic measured in this sector comes from airports, this is an indicator of an important trend for the travel industry.
The approaching summer holiday period in the northern hemisphere is a critical time for the travel and hospitality sectors. With travel restrictions still in place, however, there remains a lot of uncertainty about what this summer will bring for companies that rely on tourism during this peak travel season.
As an indicator for likely travel trends, we reviewed foot traffic data for airports in the US. As the chart below shows, airport foot traffic remains depressed compared to historical trends.
Recent signs, however, indicate a small but noticeable uptick over the past month, with foot traffic at US airports showing signs of recovery - reflecting both domestic and international flights carrying more travellers.
Our early analysis also suggests that this is a global trend, with similar growth at international airports. Over the next 2 weeks many European countries will open their borders to select other countries. We will be watching closely to see whether the momentum continues, offering some relief to the global tourism industry.
The current and forthcoming earnings seasons will be one of the most unpredictable many of us have encountered.
Anticipating and modelling sales performance will be challenging on multiple levels, given massive disparities across the country in terms of store openings and closing. With the ability to monitor daily foot traffic at every store in the country, Advan’s location data provides the unique ability to identify which stores are open or closed in almost real time. In the absence of reliable, historical comparatives, it is a key input for analysts to accurately know how consumers are behaving and forecast revenues.
Foot traffic data provides detailed information about the number of visitors to any location. Across various sectors this has proven to have a strong correlation with sales figures as reported in corporate earnings announcements. With additional analytics that accurately provide the number of stores that are open or closed, analysts now also have a reliable measure to forecasts same store sales.
Those of us based in the US and particularly in hard-hit states like New York have been keeping a close eye both on news about reopening our states, and on infection rate data across the country, to help us understand what the coming months may look like.
Around the world, countries are very different stages of infection and recovery. For investors there are lessons to be learned from around the world given the different timelines and approaches for managing the pandemic, and varying strategies for recovery.
With each week that goes by, we can use foot traffic data to see how different industry sectors are faring in different parts of the globe. Our Global Sector Tracker provides both a snapshot of where we are today and a window into where we may end up.
The map shows, on a country by country basis, the sector that has performed best in comparison with the previous week.
While the map shows only the high-level sector aggregated data, we are simultaneously tracking this information using per industry, subindustry, ticker, brand and even store level data.
With each week that passes, the data reveals more as we start to see trends and map these to other key data for the country in question, in addition to infection rates, such as the major industries in that country
Building on previous posts from Advan Research and Eigen10 Advisors using anonymized cell phone movement over time to analyze the impact of Covid-19 on various real estate property segments, this week we explore the different experiences metro areas have had returning to the office. The market areas were chosen to represent a cross-section of the country, which had their own set of stay in place orders, and in turn, timing of a return to work. The markets analyzed are a section of Plano TX, part of Nashville CBD, a section of Phoenix near Scottsdale and the Seaport District in Boston MA.
Nashville's shelter in place began March 31, with a reopening on May 1. Plano began a stay at home April 2 based on a decree from the Texas governor, which ended April 30. Arizona's stay in place began March 31 and expired on May 15. Massachusetts had a stay at home order starting March 24, with offices not reopening in Boston until June 1, a week later than the rest of the state. Plano's return to work was the quickest, with foot traffic up 24.4% in the first full week after the restriction was lifted. By the first week in June, traffic had increased an additional 58.1%. However, overall foot traffic was still down 50.1% compared to the first work week of June 2019.
Nashville was not as quick in its back to work, with just a 9.2% increase in foot traffic the first full work week after the restrictions were lifted. By the first week of June, traffic had increased an additional 69.1%, as more people returned to work. Once again, when compared to the year prior period, foot traffic was still down significantly, 70.5%.
The Phoenix location we examined is more mixed-use than pure office, as most of suburban Phoenix is, so the change in foot traffic will reflect not only a return to office, but also retail. Foot traffic jumped 39% the first week after the stay at home order expired. Surprisingly, traffic dropped 14% from that number three weeks later during the first week of June. Compared to a year ago, traffic the first week of June was down 58%. Less than Boston and Nashville, but slightly more than the section of Plano we examined.
Massachusetts' experience has been quite different with a much slower return to work. In the first week back (first week of June), there was an estimated increase of just 3.7% in total visitors compared to the week prior. The Mayor of Boston had restrictions in place limiting office capacity to 10%, so there was already a limited potential increase in place, preventing numbers like Plano or Scottsdale. This total visitor count was a decrease of 78% from the first full week in March, and 81% lower than the first week in June the year before.
Based on Massachusetts' more strict reopening plans, it is unlikely that foot traffic will increase as quickly as seen in Texas or Tennessee. Regardless of the rules and regulations put in place by mayors and governors, businesses and workers are moving more cautiously than the rules allow.
While this analysis was a simple sampling and not necessarily a reflection of the larger U.S. market, Advan and Eigen10
Advisors are working to continue to track and analyze the data in a broader and more long-term indexed fashion. For
further information in using these indices, contact Eddy Hribar at 
or Jeff Havsy at 
.
With a decrease in social distancing measures across most states, and markets reaching record highs, the past couple of weeks had felt like a tentative breakthrough after months of lockdown and uncertainty.
Yet news from the Fed today that they would hold rates steady for the foreseeable future and another heavy week for jobless claims led to a 5% drop in the Nasdaq. The fall of 1,400 points sent stocks towards their worst day for markets since mid-March.
Foot traffic data for key states also indicates that the recovery will not be a straight line. Even in the best case scenario, we are still far from returning to normal levels of activity.
As the chart below shows foot traffic for consumer discretionary businesses and is a good indicator for the extent to which people are returning to pre-COVID, "normal" behavior.
Our index shows that in Texas, which to date has had one of the strongest rates of recovery, foot traffic at discretionary businesses is still 30% down pre-lockdown levels. New York's path has been slower and other states such as Minnesota, have seen a more lumpy trajectory in their recoveries.
As social distancing reduces, and summer begins, we anticipate potential new spikes in cases in some states - though this may not be uniform across all - and a likely impact on foot traffic as a proxy for recovery.
For more detailed data please contact us directly contact us.
Last Monday was the first day that Mayor Walsh allowed non-essential office workers to return to work in Boston. Anecdotally, there wasn't a rush to get back into the office. Multiple news articles spoke to the fact. We thought it would be interesting to look at some numbers. Using mobile tracking data, we analyzed foot traffic activity in the Seaport waterfront to see what happened last week.
The short answer: there was no rush back.
Overall last week, there was a 7.3% increase in foot traffic compared to 2 weeks ago (we avoided the week prior as it was the Memorial Day weekend). The largest increase was on Thursday -- up 17.9% versus May 21st.
When comparing June 1st to the first Monday of June last year (June 3rd), overall Seaport foot traffic is down 83%.
Many employers are taking a cautious approach to opening up, with some planning a return between Independence Day and Labor Day. Meanwhile both the Commonwealth, and the city of Boston have their own guidance in place on reopening. It will be quite some time before offices are back up and running with any semblance of pre-COVID-19 foot traffic.
For more detailed data please contact us directly contact us.
As the US restaurant sector starts to get back on its feet, we have been monitoring foot traffic numbers with interest to see which are turning around most quickly.
The 3 chains we analyzed saw significant falls in traffic between mid-March and the end of April. This was most dramatic for Darden, where foot traffic fell to almost zero given the sit-down nature of the chain's restaurants. Yum brands saw a 60% fall in foot traffic at the nadir and Chipotle a 70% drop.
Since the beginning of May, all have started to see a steady increase in foot traffic. Yum is up approximately 40% from its low, Chipotle is up almost 30% and foot traffic at Darden is up about 20% since the end of April.
Importantly, our analysis takes into account a manual review of opening and closing times of every location, to ensure the data is accurate - this is information that may not be available or accurate via other sources.
The steady increase in foot traffic to all three restaurant chains reflects two related trends: first, people are going out more as restrictions are lifted; and, secondly, some restaurants are now allowing people to enter and even dine-in, rather than picking up take-out at the door, which increases linger times at these locations.
To complement this data, we also reviewed our Hotspots map. This interactive map highlights city blocks where more than 50 people have gathered for longer than 15 minutes, excluding residences.
The screenshot of our map below shows the difference in social gathering between April 1 and May 24 (red = more gathering, green = less). Based on the increased overall mobility of the US population between these dates, it seems restaurants may be a lagging indicator for recovery.
For more detailed data please contact us directly contact us.
Geolocation data gives us an almost infinite number of ways to track and measure the extent and impact of relaxing social distancing measures, such as we are starting to witness in many states across the country.
For us -- based on our extensive analysis of this kind of data -- "miles driven" is a key leading indicator of behavior. Our proprietary miles driven index is an accurate way to track how many miles individuals in the US are driving on a daily basis.
During normal times in the US, the aggregate number of miles driven is typically higher on weekends, as Americans visit friends, go shopping and ferry their kids to sports and other activities.
On March 22, we saw this trend sharply reversed. With the majority of Americans sheltering in place the chart shows a dip, rather than a peak, in miles driven on weekends during March and April. Then, starting the first weekend in May, we see traffic has begun reverting to historic patterns.
The last three weekends have once again seen spikes on Saturdays and Sundays:
This is a clear indicator that people are leaving their homes more, and traveling further distances. But it doesn't tell us whether they are getting out of their cars, to shop or use other services. For a more complete picture, we can look at this data alongside foot traffic figures for the consumer discretionary sector.
Our Consumer Discretionary index shows average weekly traffic for this sector was down over 50% in mid-April. Over the last week, however, foot traffic at stores focused on discretionary items was only down 22%. A significant recovery from the low that supports the trend seen in the miles driven data, and indicating that more and more consumers are leaving home and heading back to stores.
Once again, it's important to remember that single data point may offer an incomplete picture. While overall in the US, people may be venturing out more frequently and further afield, the story is not necessarily the same in each state.
The chart below shows the stark difference in our Consumer Discretionary index for Texas (red) and New York (blue). In both states we can see traffic ticking up, but in New York the bottom of the U looks like it will be longer and lower than in Texas.
For more information on our Miles Driven, Consumer Discretionary or other foot traffic indices, please contact us.
Over the past several weeks, meat processing plants around the world have been receiving increased attention in the media. The high numbers of COVID-19 cases in these locations, where physical distancing can be difficult, has affected meat supply chains across the country.
While some plants closed, many have now reopened. Physical distancing measures are in place but the number of workers on production lines remains depressed with many having fallen sick and others cautious about returning to work due to the risk of infection.
We looked at foot traffic for meat processing facilities in the 5 states with the highest number of plants: Arkansas, Georgia, Iowa, Mississippi and Texas.
The chart shows the percentage change in traffic since the start of the year. In the first two months, foot traffic was fairly steady. In March, for most states other than Iowa, traffic started its downward trend. The current number of visitors seen at meat plants in these 5 keys states is down on average between 13% and 21% since January. The exception is Mississippi, where traffic has recovered to almost the same levels as the start of the year.
In the following weeks we will watch to see how these plants are able to balance the risks of COVID-19 to their workforces, with the market demand for meat products, with foot traffic as an accurate leading indicator of potential supply chain issues for meat availability in the US.
For more detailed data please contact us.
Authorities around the world are working hard to understand how people are altering their behavior as rules around social distancing begin to change.
Gathering data on where people are congregating is a valuable measure for understanding risks and calculating the likelihood of a second wave of infections.
To help provide these insights, we developed our Hotspots map. We define a Hotspot as a city block in which more than 50 people are gathered at the same time for more than 15 minutes - excluding homes and other residences.
In order to provide more granular information for local towns and other authorities we have enhanced our interactive map to show Hotspots by county across the US.
The increasing dark areas of the map show the growing frequency with which people are gathering in groups of 50 or more, for longer than 15 minutes at a time. Note how Long Island is more crowded than New York City!
Looking across the US we see a general trend of more social gathering in the southern states:
And looking at the week-over-week difference we can see which areas are starting to open up first. Red = more social gathering than last week, green = less social gathering. We can see Washington, Maine, Montana are starting to open up, where in most states people are proceeding with caution:
See the full interactive map for more details.
For more detailed data please contact us.
Cellphone geolocation data has proven to be an invaluable tool in helping us understand how COVID-19 is evolving, and to support our recovery.
We have been working closely with clients and other partners to help track the evolution of the pandemic and how it is impacting different sectors, among the most important of which is hospitals.
To help visualize the environment that hospitals are operating under, as well as to provide a measure of hospital bed utilization which is an important metric of the available capacity of the hospitals, we generated a detailed analysis of hospital traffic, filtering out doctors, staff, and visits that did not result in long-term admissions, in order to estimate the actual hospital bed utilization during the pandemic.
Our ongoing analysis includes over 13,000 hospitals and clinics mostly in the US and territories, plus some in the UK, with the data updated daily.
A chart of average daily hospital admissions in New York State, Georgia and Louisiana shows an interesting, though not wholly unexpected trend.
In mid-March, when it became clear that the pandemic was accelerating in the US, we saw hospital admission in all US states fall significantly, as the majority of elective procedures were cancelled.
Within a week, however, we saw this fall level-off and begin to rise again as COVID cases increased. With New York seeing almost twice as many admissions as Georgia:
and almost three times as many as Louisiana during the third week of April:
While New York was clearly the hardest hit state, there are important differences within the state itself, with New York City seeing a marked increase in daily admissions through April, while those in Albany gradually fell over the same period:
Tracking admissions is an immediate way to view how these vital resources are coping with a new influx of patients across the US states and around the world.
For more detailed data please contact us.
The biggest mall operator in the US, Simon Group, announced this week that it will open dozens of locations across the US. With Macy's and other retailers following suit in states where restrictions have been relaxed, investors, consumers and retailers will be watching with interest to see how soon visitor numbers begin to recover.
One indicator of customer appetite for returning to stores in the US is to look at how foot traffic to malls in China has fared since restrictions began to be lifted in late February and early March.
Our China Mall index includes a representative sample of the biggest malls in mainland China. Following a steep decline in traffic numbers in January, visitor numbers to malls has been increasing very gradually but with a clear upward trend. By mid-April, foot traffic was trending towards almost 30% of that seen in December 2019, before the pandemic had hit.
We will be watching with interest as an increasing number of retailers begin to reopen and customers become more comfortable with going back to shopping, albeit in a much changed environment.
When we launched Advan 5 years ago, we were really excited at the prospect of developing a new type of dataset. One that would give investors an alternative view into the companies and markets that they care about.
We are data geeks at heart and we spent years agonizing over how to make our data more precise; manually drawing geofences around millions of locations, for thousands of companies. Normalizing data became almost an obsession. We wanted to remove any possible bias - from the way data had been collected to how it was mapped. By eliminating noise from the data, and backtesting it against multiple sources we made sure traders and investors could rely on it for critical decisions.
With the markets steady and rising, investors looking for an edge found that this new technology could provide one. But while we and our clients continuously model potential risks to specific investments and broad portfolios, few of us anticipated the extent of the situation we now find ourselves in.
Now, markets are trying to make sense of the unpredictable. While governments and authorities are balancing decisions that literally mean life or death for many, balanced against a potentially catastrophic effect on our economies.
Over the past several weeks, as the crisis due to the COVID-19 pandemic has evolved, it has become clear that geolocation data can play a key role by also providing an alternative view into the world we live in. And that our focus on tracking foot traffic - with an accuracy of 10 meters - could serve a broader public good.
By pinpointing the number of people at any location across the country, within hours, it is possible to understand how and where people are moving at any given time. Retailers can track which location their customers are visiting, and where they have travelled from. They can easily compare data for different US States, and even in other countries. For investors, location data provides the most accurate source of information about likely company performance.
Perhaps most importantly, for governments and authorities, location data can help with decision-making that supports both businesses and individuals in their communities.
To help make it easier to understand the changing landscape, we developed an interactive map of global hotspots, that instantly shows where groups of more than 50 people are gathering, for more than 15 minutes at a time. This offers an informative and accurate picture of movement around the world, on an almost real-time basis. In addition, we've partnered with Knoema, which aggregated visualizations from multiple alternative data sources to its website to help policy-makers, media outlets and the public track the spread of COVID-19 and measure its impact.
The examples below show how foot traffic changed in central London, UK between mid-January and mid-April.
Each map shows the 200 busiest locations on the respective dates. The size of the red spots is proportionate to the total number of people seen at each location and excludes residents.
In January, you can see many large hotspots, with particular concentrations in the City and Canary Wharf as well as in West London - places where people work and shop.
London - January 15, 2020
In April, you can see the stark difference, once the majority of people are working from home. With hotspots primarily around hospitals and other essential businesses.
As businesses and workplaces gradually reopen, we will be able to easily see how behavior is shifting and the extent to which people are adhering to mandates that limit social interaction. We also hope that it will aid a swift recovery - with fast and accurate data at its core.
To view our Hotspot map, please visit: https://www.advan.us/hotspots/
This week in our Covid-19 report using foot traffic data from Advan we examine the impact of the virus on student housing. We looked at three student housing buildings, located in College Station (Texas A&M), Boulder (University of Colorado) and Syracuse. All three universities sent students home and switched to online learning in mid-March. Knowing how quickly tenants reacted to the shutdown and when they come back allows owners, operators and leasing agents to make focused decisions that could potentially enhance value and lead to outperformance.
Foot traffic for the property near Texas A&M fell between December and February, so the particular property was already facing challenges from other factors. The properties near Syracuse and Boulder saw significant increases in February and were both up the first week of March.
Unfortunately, due to differences in the timing of spring break this year and last and the time that each school transitioned to online learning, the first week of March is the only week that permits valid year over year (yoy) comparisons. All three schools had yoy declines of 30% or more.
By early April -- as schools continued online learning, states, cities and counties imposed more restrictions, and society worked to bend the curve -- foot traffic fell by more than 50% at all three properties. At the Syracuse property, foot traffic fell 96%! Some students remained at the properties near the other two schools, but clearly not many.
Syracuse announced on March 13 that students would begin online learning after Spring Break, the week of March 16. UC-Boulder had the same timeline with students gone the week of March 16. Texas A&M had students leave by March 23. We can see the immediate impact of those announcements on foot traffic at each building.
Given its real time nature, how could a real estate owner, operator or investor use this data? The decline in foot traffic shows a decrease in people in the building. Once tenants had left, a deep clean to help insulate the common areas of the building from the virus may be done . This would disrupt fewer tenants and help ease the anxiety of the remaining tenants. By decreasing the burden on the tenant base, the potential for renewals increases.
This data could be used to change how the building is operated and leased. Accessing real time data to adjust strategy and operations allows for better decision making and hopefully outperformance. Real time data may lead to cost-savings or just as important may prevent future spikes with operating problems averted.
Advan and Eigen10 Advisors are working to track and analyze the data in a broader and more long-term indexed fashion. For additional analysis of your property contact
Eddy Hribar at or Jeff Havsy at .
1 NAA and NMHC have issued guidelines for apartment owners.
Over the past weeks we have been working on new ways to analyze foot traffic, in order to help our clients understand how patterns of movement are changing, and what this means for businesses.
As part of our COVID-19 package we have developed over 200 indices for multiple sectors and industries including restaurants, grocery stores, electronics, cloth-ing/accessories. These sectors can be segmented by US state as a way to visualize the response to COVID19 by using foot traffic as a proxy for social distancing.
As an example, in the chart below, we've plotted our Commercial and Office REIT Index in two key states - New York and Florida. This Index is composed of more than a hundred REITS from malls and shopping centers to office buildings across the country.
It shows the daily percentage change in foot traffic for these type of locations in each state. In January and February, during the early days of COVID-19 - and before businesses and offices started to close - you can see how the typical weekly pattern differs between the two states. New York has more office buildings and therefore sees more commercial foot traffic during the week. There is also less variation between weekday traffic and weekend traffic (plenty of shopping in New York as well) as the chart shows. Florida sees greater variation, with bigger peaks on weekends to its larger proportion of malls and shopping centers, and fewer office buildings.
While shopping centers and work offices in New York and Florida closed on approximately the same day on both states, we can see that New York reacted more quickly and decisively, with a steeper drop in their daily footfall index and has maintained this downward trend.
Using this index as a barometer we can see how residents of the two states differed in their response. By this measure, it seems that New York took the order to implement social distancing more stringently as soon as it was put in place.
It is important to note that this measure of social distancing is not necessarily correlated with the number of infections in each state. But it does provide a window into how residents are behaving and will give us key insights into the pace of recovery across the various States as offices and stores begin to reopen.
Average daily traffic to Amazon warehouses spiked dramatically in March as the retailer ramped up its staff. Average daily traffic in March was up 43% compared to year earlier, far outstripping seasonal staffing increases.
In the first few days of April the number of Amazon employees seen at their warehouses has continued to grow, as demand for home delivery surges, with increasing numbers of people following strict orders from local authorities to stay home.
Historically, based on Advan's analysis, the number of employees seen at Amazon warehouses has a strong correlation - approximately 0.85 - with company revenues.
Advan also tracked truck traffic for Amazon across the US. This measure shows a slight increase in delivery traffic, but not as pronounced as the increase in employees. This may reflect a reduction in the number of available drivers, or the Amazon's ability to efficiently consolidate deliveries in order to keep up with demand.
The coming days will be critical for the retailers as it navigates the difficult line between fulfilling the essential duty of delivering products to customers staying home, and protecting its employees from the COVID-19 virus through distancing measures within the workplace.
As we continue our trip across the property types analyzing the change in foot traffic using Advan data and the impact of Covid-19 on commercial real estate, Eigen 10 advisors examines the industrial property sector this week. The data this week comes from the Port of LA and an industrial warehouse park outside of Chicago.
The industrial park is a mix of food distribution, light manufacturing, auto part distribution and other uses. We picked this park since it has a mix of critical and non-critical components within the distribution chain.
Foot traffic at both the port and industrial park was down 17% this February compared to February last year1. Foot traffic was already down in both locations due to the virus, having fallen 20% at the port and 14% at the industrial park in January. The impact at the port continued into March with foot traffic down 19% the first week and 29% the second week. In contrast, foot traffic at the park started to rebound with the decline in the first week of March down to 6% and 13% in the second week of March.
By the third week, restrictions had been put in place in both California and Illinois with regards to non-essential workers. Retail and restaurant sales had slowed dramatically. You can see the impact on foot traffic in both locations -- down more than 40% compared to the same week the previous year and that trend continued last week.
There is still foot traffic in both locations as ships arrive at the port to be unloaded and food distribution to supermarkets and other food retailers remains strong. However, other types of retail sales have plummeted, and a lot of manufacturing has stopped or slowed.
As China and other parts of Asia begin to rebound, there will likely be some increase in activity, though many retailers have limited or halted new shipments. Depending on what products are stored in the warehouses, activity will be impacted; traffic will remain strong for essential uses but greatly reduced for those deemed non-essential.
As the economy begins to recover and retailers prepare for the peak fall and Christmas season, port traffic should start to return towards previous levels. Depending on how the virus impacts both economic growth and any changes to supply chains, returning to previous levels may happen sooner or later than expectations. Warehouse activity will respond quickly to the pace of economic growth.
Advan and Eigen10 Advisors are working to track and analyze the data in a broader and more long-term indexed fashion. For additional analysis of your property contact
Eddy Hribar at or Jeff Havsy at .
1 The analysis used the first 28 days of February 2020 to account for the additional day in the month due to Leap Year.
Last week using data from Advan we showed the impact of Covid-19 on retail real estate. Our analysis this week looks at the impact of the virus on office real estate. Using data from Advan that tracks anonymized cell phone movement over time, Eigen10 Advisors examined the change in foot traffic for a New York City office building.
The building’s vacancy rate did not change significantly between first quarter 2019 and 2020, from low single digits to mid-single digits. So, the change in occupancy didn’t significantly impact foot traffic.
Foot traffic in the building was up 9% this February compared to last year1. Foot traffic was relatively flat compared to a year ago for the first week in March. As the virus spread and New York felt the impact, foot traffic declined the second week of March, falling 17%. As the full impact of social distancing hit and non-essential workers were asked to stay home, foot traffic continued to fall. By the third week of March, foot traffic had fallen 75% compared to the same week a year ago. A staggering decline and one that shows the true impact of the virus on the economy. With all non-essential workers staying away the numbers for the last week of March are likely to be even greater.
New York was one of the first states to strongly encourage, if not mandate, non-essential workers work from home. As additional closures and limits grow around the country, other office buildings will see similar declines. There is non-essential retail at the base of the building which is included in the data. As other buildings in the city closed and fewer tourists visited New York, the retail establishments were impacted.
It is unknown how quickly the market will bounce back, but the building is almost fully leased. So as soon as the
‘shelter in place’ mandate is lifted, foot traffic should rebound quickly for both the office building and the retail at
the base. The short-term impact will be painful for the landlord, but the property should be able to recover
quickly. This office building is well located and almost full, other buildings without these advantages may not recover
as quickly. For additional analysis of your property contact Eddy Hribar at or Jeff Havsy at .
1 The analysis used the first 28 days of February 2020 to account for the additional day in the month due to Leap Year.
The coronavirus pandemic that is reverberating across the country and the globe has impacted commercial real estate in ways unforeseen from previous “black swan” events. This impact has not been even across sectors or markets or even subsectors within a property type. Fortunately, with today’s technology and analytics we are able assess some of the impact as it is happening rather than waiting in arrears for the data. Using data from Advan that tracks anonymized cell phone movement over time, Eigen10 Advisors examined the change in foot traffic at a sample of different types of retail centers in different markets.
For the purpose of this analysis we compared a prime “non-essential1” retail location and a prime “essential” retail location in each of three different markets to see how the number of people visiting those locations changed in February and the first two weeks of March compared to a year ago. The first market we examined was Seattle since that is where the first Covid-19 case in the U.S. was identified and unfortunately, where the first fatalities occurred. The other two markets included in the analysis are New York, where the second large outbreak occurred a few weeks after Seattle, and Dallas which hasn’t been a significant hotspot yet.
All three non-essential retail locations and two of the three essential retail locations showed increases in visitor traffic for February 2020 compared to 2019 as shown in the graph below. The decline at the third essential retail location was slight (-2%). Given the natural noise within the data, the foot traffic was essentially flat. Compare that with March, where all the non-essential retail locations showed declines greater than 13%. In contrast, the essential retail location in Dallas showed a significant increase in visitors, 14%, and the New York essential retail location had a healthy 7% increase. The essential retail location in Seattle showed a significant decline, -7%, but that was less than half the decline of the nearby non-essential retail location.
Not surprising, the declines at both Seattle stores were greater than the declines in the other two locations.
If we split March even further, looking at the first week separate from the second week, a more pronounced pattern emerges. The declines accelerated dramatically after March 7 compared to a year ago as the crisis became better understood by the public and health officials discouraged large crowds and social distancing. All three non-essential retail locations registered significant declines and the declines in Seattle were more than double the drops in New York and Dallas.
Traffic at the Dallas and New York essential retail location’s increase for the second week of March compared to a year ago. However, it is likely that the increase was fueled by fear since the data for the following day shows declines.
Comparing the third Sunday in March 2020, which was March 15, against the similar Sunday in 2019 shows how quickly visitor traffic dropped. Using a single day adds noise to the analysis and the third Sunday in 2019 was March 17, St. Patrick’s Day. However, the decline in foot traffic in all three non-essential retail locations was so dramatic that noise does not account for the decline.
Foot traffic at all three essential retail locations are down significantly on Sunday compared to the previous week as state and local governments encouraged social distancing. Even Dallas, which hasn’t seen the same number of cases as greater New York and Seattle had a decrease in foot traffic.
As health, state and local officials encourage or enforce limits on social interactions, the retail sector will feel the pain. Many investors believe that necessity retail will ‘hold up’ in a recession. The impact to necessity retail appears to be less, but the decline in foot traffic in Seattle and to a lesser extent New York shows that it isn’t immune.
It is unknown how quickly the market will bounce back. However, in contrast to the 2008 recession, new technology allows us to have much more precise and timely views on economic activity. These trends can be viewed at both market and property levels which will give investors much improved market transparency and hopefully alleviate unnecessary risk adjustments over the long term.
While this analysis was a simple sampling and not necessarily a reflection of the larger U.S. market, Advan and Eigen10
Advisors are working to continue to track and analyze the data in a broader and more long-term indexed fashion. For
further information in using these indices, contact Eddy Hribar at or Jeff Havsy at .
1 Non-essential defined as a location that is heavily aimed towards clothing, jewelry, entertainment and restaurants whereas essential is defined as retail that is more heavily aimed towards, grocery, pharmaceutical, cleaning and other daily household needs.
In New York City, the MTA has stated that it’s seen “ridership tick down a bit in the last week or so.” For anyone who lives there, it probably feels like more than a bit of a tick down, with subway platforms empty at rush hour and the usually bustling Grand Central terminal eerily quiet.
In order to visualize what is happening at one of the busiest train terminals in the world, we looked at year-over-year foot traffic numbers at Grand Central to see just how much visitors numbers have fallen in the past few weeks.
The blue line on the chart below shows average daily foot traffic since January 2019, with the orange bar showing the year over year change in average daily traffic by month.
As it clearly shows, traffic in February declined from January but was up year-over-year. Whereas we see in March a dramatic year-over-year drop.
This is no doubt due, in part, to many more people working from home over the past couple of weeks. And is likely compounded by a drastic fall in visitor numbers from overseas during the usually busy school holiday period.
Advan will continue to track foot traffic numbers at key locations as the full impact of the COVID-19 virus unfolds.
The New York auto show, due to take place in April at the Jacob Javits Center, has been postponed until late August. Is this just a temporary setback for the Javits center - one that is likely to be seen across all convention centers, as the appetite for large gatherings dwindles with the spread of COVID-19? Or is it a sign of a longer term hit to the convention industry as a whole?
We analyzed the average monthly foot traffic in the Jacon Javits Center over the last 3 years.
According to our data, the traffic in the center has generally been lower in most of the trailing 12 months, but the fall in traffic during February and March (to-date) has been among the worst in the location's history. It is clear that the reapidly spreading coronavirus is having significant impact on this sector. We will continue to track these trends as the situation evolves over the coming weeks.
Advan's REveal platform can be used to generate these insights on any custom location, such as the Vegas strip or other large convention centers worldwide, which are some of the locations that will feel the biggest initial impact of the virus.
Recent news reports have highlighted an increase in foot traffic for CostCo as the spread of the coronavirus spurs people to stock up on essentials. Some analysis has put the number of visitors to CotsCo stores in the US up 72% year-over-year.
At Advan, we ran a detailed analysis of true foot traffic at CostCo. The graph below shows average daily traffic for each month since October 2015, with year-over-year changes overlaid.
According to our data, CostCo saw an increase in traffic of 11.5% compared to last March. This number is in line with CostCo's published revenue growth. It also well within the range of growth that CostCo has shown in the past.
What drives these large differences in our reports versus past published reports? The reality is, it takes a lot of hard and detailed work to derive accurate measurements. Here is what Advan has done to arrive at the above numbers:
Each of the above is a major undertaking, both in time and effort. But that is what is necessary and distinguishes a correct analysis from a claim that can be completely off the mark. It is common knowledge, but worth repeating: "half knowledge is a dangerous".
Has travel been affected by the coronavirus, and if so by how much and where? The overall volume of passengers traveling by air affects many of disparate industries - not just airlines but travel sites and aggregators that sell tickets, hotels and car rental companies that rely on airports for a large volume of their business, credit card companies, restaurants and retailers. The list can go on.
To try and gauge the impact that a reduction in travel due to the coronavirus might be having on these sectors and more, we analyzed foot traffic in key US and international airports.
First, within the US, we looked at the largest airports for international passengers: Boston, Chicago, Los Angeles, New York and San Franscisco, as well as Atlanta, which is a major airport hub.
Measuring the average daily visitors in each airport we can see that the West Coast airports, and to a lesser extent, Chicago O'Hare, show a significant drop in traffic between January and February, compared to the previous 3 years. Los Angeles, in particular, saw a drop of almost 7% in traffic from January to February of this year, whereas in previous years the trend was more or less flat.
This is a clear indicator that air travel to and from Asia is starting to show identifiable weakness.
While the month over month change is material, on a day-to-day basis we do not observe any pronounced changes. The chart below shows year-to-date traffic on a daily basis. The effects are mild compared, for example, to the weather delays in Boston and Chicago on Saturday, January 11.
The picture in international airports, however, is materially different. Hong Kong, Seoul and Vancouver have large and statistically significant drops from prior years, with Hong Kong and Seoul the most affected.
This drop in foot traffic for international airports is also visible in the daily traffic trends:
More in depth analysis traffic across all US airports as well as the major US airlines is already available in Advan's graphical interface, Excel API and data feeds. Daily historical airport traffic on any international airport, or any international location for that matter, can be generated on the fly using REveal, Advan's online platform.
For more insights into how this trend is affecting airport retailers, see this article from today's Wall Street Journal: Airport shops suffer crisis as Coronavirus upends travel, WSJ, March 3, 2020
Each company trades based on different metrics, but it is fair to say that most consumer discretionary companies, especially those with a growing footprint, are judged by their comparable store sales. This is defined differently by each company, as it is not a standardized GAAP metric, but it typically means "we only measure the performance of stores that have been open for a certain amount of time", usually anywhere from 3 to 13 months, depending on the company.
Shake Shack is a good example. Armed with geolocation data's ability to measure traffic down to individual locations for any company, and using the consistent 4 years of history available to us, we set to analyze the chain's performance in Q4 2019.
To compute the traffic correctly, we select only the specific SHAK stores that (a) are owned by the company, and therefore have comparable store traffic reported, and (b) have been open for at least 13 months before the prior-year fiscal quarter (or 25 months as of the fiscal quarter being reported), as this is the measure that SHAK uses to compute comparable store traffic.
This is Advan's traffic data versus SHAK's reported traffic:
If it does not look perfect it's because there are a lot of variables going into the computation. It is unreasonable to expect that even SHAK's traffic numbers are perfect. For example, some of the traffic that we compute may include delivery drivers, which SHAK may or may not be including. We also do not know if SHAK is measuring traffic that enters their stores or measures the outside seating areas as well; this depends on the people counting systems that they use. What is important is that the numbers are correlated, especially in the last 5 fiscal quarters, and can be used as a good indicator of the directionality of the traffic -- is it going to be higher this quarter or lower?
As you can see from the above, we forecasted a 7.5% drop in comp store traffic, which was below the concensus estimate.
After the market close on February 24th the company reported same store traffic drop of 5.2% and comp store sales of down 3.6% which were below the concensus estimate of -2.5%. Shake Shack's guidance was also below the lowest range of expectations. As a result the stock opened at $63.92, a drop of 13.3% versus the close of $73.57 on February 25th.
Usually the first considerations when a company acquires another is how to realize economies of scale, cross-marketing opportunities, and areas of common improvement. If one knew which shoppers visit each location and quantified the cross-visits between malls then they could make educated decisions about which malls to focus on for improvements, tenant acquisition, or cross marketing.
With traditional measuring methods this is hard to achieve, but cellphone location data is the perfect fit for such an exercise.
But not all visitors are created equal. To get the true picture one needs to go a step further and adjust visits by the purchasing power of the visitors. Hence at Advan we computed the income of each device using its shopping behavior, and then adjusted the visits and cross-visits by income. Here are our findings.
First, looking at traffic alone, here is the breakdown of traffic by state. Florida has the highest number of visitors for both Simon and Taubman, and the highest number of cross-visitors: 27% of Simon shoppers also visit a Taubman mall. California on the other hand (which is the next largest Simon state that has Taubman presence) only sees 3% cross-visits:
The picture is similar, but more informative, when taking into account the income of visitors. We see that Florida is still the largest state, with $590 billion of annual purchasing power across all visitors, of which 28% ($168bn) also visit Taubman, and California is now #2 in Simon presence at $430bn purchasing power with only $16.5bn of that cross-shopping at Taubman:
Of course the full details can be gleaned only when breaking down the above by individual mall, where one can identify which visitors, and which specific cohorts of visitors (high income/low income, millennials / baby boomers, etc) are visiting multiple locations, and make educated decisions on where to invest and how to expand the efficacy of each mall.
Markets have reacted very strongly to the potential effects from the coronavirus epidemic in China. MGM, Las Vegas Sands and Wynn Resort stocks have been hit particularly hard, dropping 20% since the news, mostly on fears that their Hong Kong and Macau locations will see materially reduced visitors during the annual Lunar Year celebrations. But are the actual effects on business and travel what the market expects or is this an over-reaction?
To analyze the effects we decided to look at a few key metrics:
Let us examine the data in detail.
First, the casinos in Macau and Hong Kong:
Which is materially lower than last year's traffic:
In the first week since the news of the virus, we see that traffic was fairly unchanged, and even increasing in the Las Vegas Sands locations. However, starting in the second week the traffic is starting to fall, and instead of the increase usually seen in the week after the Chinese New Year we see a prolonged slump, with the difference being on the order of -20% instead of the typical +20%, although the large increase after the New Year's is limited to about 1 week.
Second, the Macau airport:
Versus last year:
A similar story unfolds in the Macau airport, although the moves are more muted; the increase after the Chinese New Year was small last year and the drop this year is on the order of 10%.
Then we look at the Hong Kong airport:
Versus last year:
This supports the same results as the Macau airport, and in fact is a bit stronger; instead of a 10% expected increase after the New Year's, we see a drop of 10%.
And last, the US airport traffic and how it compares to international airport traffic:
The US airport traffic is the blue line and the Global traffic is the red line in the graph:
The effect so far has been failry muted when it comes to global or US airport traffic. The measurements are within the margin of error and do not indicate any panic or concern. Of course things change, and fast, and we are monitoring the situation daily, but so far any effects appear to be concentrated in and around China.
Department Stores, Restaurants, Malls, all continue growing their traffic on Black Friday on a year over year basis. The growth rate has decelerated a bit, but it's still in the healthy double-digit numbers, from an already high base.
Only Hotels showed negative growth, but less so than in prior years -- a weighted average of -1% vs -3% and -2% in 2018 and 2017 respectively.
Below are a couple of graphs that illustrate the traffic. Do not be fooled by the simplicity of the graphs, the data underlying them consists of 3 Trillion data observations across 2 Million geofenced locations pertaining to 1,400 companies, all normalized using Advan's custom algorithms for reliable year over year comparisons. Simple is hard to do!
Sector performance: This shows how many more people visited a sector on Black Friday than they did the year prior.
As we can see all Consumer sectors (which include Apparel, Clothing, Malls, Supermarkets, etc) grew in 2019 between 8% and 25% versus 2018. Their growth rate is down between 20% to 40% since 2018, but it's growth nevertheless. Certainly much better than the meagre 2017 situation where traffic was falling.
Drilling down to individual industries, the picture becomes clearer:
It is important to keep in mind that the growth patterns above are not uniform across companies. In fact, on
average the Consumer sectors are down vs 2018. This means the big department stores / retailers / malls are dominating
the growth (so that overall growth is positive) whereas most of the small chains are hurting (so that on average,
traffic is down on a company by company basis):
The same story unfolds on an industry basis, where the Department Stores and Malls are overall slightly down on average,
meaning the little guy is hurting, whereas the high trafficked stores see their traffic growing each year.
One of the interesting things you can do with access to anonymized, large scale and accurate cellphone location data, is to measure traffic patterns. Consistent with the Big Data theme, we decided to compute this across the whole US, to measure Total Miles Driven.
Total Miles Driven is estimated by the Federal Government (aka "FRED") in a monthly report, which is generated with about a 35 day delay (e.g., the September total miles driven is published in early November). The information is useful because it is an indicator of:
There are two versions of Miles Driven published by FRED: seasonally adjusted, and unadjusted. We worked with the unadjusted, because it is really hard to replicate the seasonal adjustments (the government does not provide detailed steps of how they perform the adjustments).
The results are as close as it gets! The correlation between Advan's Miles Driven to the Federal Government's is 0.92. But Advan's data is available T+1 (i.e., with 1 day delay), so more than a full month ahead of FRED's. Talk about having an unfair trading advantage!
But we did not stop there. The beautiful thing about the breadth of the data available, is that we can also figure out which cellphone devices belong to truck drivers. Or for that matter, which devices live in a given Cebsus Block Group or Zipcode. Or which ones have a certain income level; or which ones buy or service their cars in a Ford dealer, or a Mercedes dealer; and so on. The miles driven can then be computed only for these devices, to generate custom insights that not even the government, or anyone else for that matter, has access to today, but will be unable to live without in the future!
Here are Advan's Trucks miles driven sourced from (the devices belonging to the drivers of) about half the commercial (class 8) trucks in the US:
The possibilities are endless, so free up your imagination and let us know what's the next interesting insight you want us to compute!
It comes in many forms: Speech. Movement. Draw within the lines. Wait, scratch that last one.
We didn’t like that last one either. When it comes to measuring foot traffic, trade areas, migration patterns, demographics, cross traffic, and in general get behavioral metrics from mobile location data, yesterday’s state of the art was to get canned results on some buildings or venues someone else has decided you might be interested in.
What’s the reason for the limitation? In two words: Big Data. When you are dealing with billions of data points you can’t just write a query to extract any information you want because it will be very slow and very costly (sometimes in the hundreds of thousands of dollars).
It’s even worse in our case because we have 6 trillion cellphone observations over the last 5 years! And growing at a rate of over half a trillion every quarter. Gulp.
But the ability to draw any area, be it a building, a retail location, a factory, an oil field, a neighborhood, you name it, and get instant foot traffic measurements for it was making us loose too much sleep. A sure sign we had to do something about it.
So after several months of head scratching, experimentation, optimization, design, testing, design again, and all the other sleep-reducing activities favored by software engineers, we built a tool to be able to do just that. If you thought we would have shown it to the whole world the very next day, you would be right, but... once a nerd always a nerd. It took us 2 full years to open it up to our clients. Well, better late than ever...
So finally last month we announced REveal, a self service website where the user gets full control of the data.
Draw it:
Recite your favorite poem, and voila! True Home Trade area:
- Want to find out where those living in a building you are considering buying work?
- And how has that changed over time?
- What is the true trade area of this Mall?
- Where do the visitors live and work?
- Are more people moving into this allegedly hot neighborhood, or is it all hype?
And on and on. The possibilities are truly endless.
As recently as 10 years ago it would be unfathomable to think that you can crunch 2 Petabytes of data (that’s 2 Million Gigabytes!) in seconds and get detailed answers to any question you can think of. Progress is sometimes pretty close to science fiction!
- Spock: Over and out.
It is everyone's favorite game to perfectly forecast earnings by looking in the rear view mirror. We are trying really hard not to fall into the same trap ourselves.
Here is why: it is very easy to make random predictions, some of which come true, and then look back and cherry-pick the ones that you were right. Really, a monkey can do it. If you give them a banana for each correct prediction they would get pretty fat, fast!
What really distinguishes a good forecasting method from random chance is, the percentage of times you get it right versus the ones you get it wrong. If you are correct more often than not, even 51% correct vs 49% wrong, then you have something to say. Even if you are wrong more often but you have higher conviction (and therefore make more money) when you are correct, that also has value.
Advan's Machine Learning algorithms take the foot traffic data we compute and forecast top-line revenue. We get it right about 60% of the times. 2 out of 3. If that doesn't sound impressive, consider that many quantitative funds can build profitable algorithms from a mere 51% advantage. And in our own "paper trading" backtests, the performance of a long/short neutral portfolio constructed using Advan's foot traffic data has a Sharpe ratio over 2.
Considering we do not claim to be experts in either Portfolio Construction nor Machine Learning, these performance results are pretty good, if we may say so ourselves. The average Hedge Fund has Sharpe under 1 (not to ding Hedge Funds, actual trading is much harder than paper trading).
Having said that, we can't resist the urge to brag about individual hits. Just this once:
• Texas Roadhouse (TXRH):
The consensus estimated revenue in Q3 2019 was $649.2mm. Advan forecasted $651.32 on foot traffic growth of 6.1%. The actual revenue reported on October 28th after the market close was $650.42mm. The stock closed at $50.17 on the 28th and traded up 20% the next day!
Advan's Year over Year reported traffic and TXRH top-line revenue have correlation of 0.7 over the last 8 fiscal quarters; Quarter over Quarter traffic and top line revenue have correlation 0.96. This correct forecast wasn't an accident.
Is Gamestop's traffic up? Is Jimmy John's traffic growing more than Subway's?
Every day some new analysis of cellphone location data portrays to measure the exact foot traffic in one or all of these, and every day we emit a collective gasp at the incredulous claims.
Let's get this quickly out of the way: Gamestop traffic is trending down; Jimmy John is down too and that trend has not changed for 3 years straight; it's also worse than Subway's downward trend, except for some bright, but inconsistent, spots in 2019.
• Gamestop:
• Jimmy John's (blue) vs Subway (pink):
But that's only the beginning of the story.
First, it is a disservice to the reader to portray that any dataset, and in particular cellphone location data, can estimate within a fraction of a percentage point the actual traffic of a company. With extremely detailed geofencing work, taking into account the hours of operation of every single location, and after testing hundreds of normalizations versus the actual revenue data and versus our partner's (Consumer Edge) credit & debit card transaction data, our research team at Advan can come close. We strive to be approximately right, instead of precisely wrong, as Warren Buffet said.
Second, the actual claims we have been hearing are completely off the mark. Gamestop's traffic for example -- and we have nothing against the company, these are the fundamentals talking -- is down. About 6% down year over year in Q2 2019 in fact, and not looking better in Q3. There are no two ways about it (if you insist on exact numbers, then 6.04% down, but remember, this is approximate).
Jimmy John's is doing better than Subway in 2019 (comparatively speaking; Subway has 13x the traffic), but that trend has started running out of steam in the first 2 weeks of October. Here's hoping it's just a small aberration. More worryingly though, if you go back to 2018 and 2017 the 2 chains' traffic is changing at the same rate, and that rate is downward trending in both cases. Not a bullish sign.
So please, do not believe everything you read without confirming how the analysis was performed. Consider placing more weight on analytics performed by the experts in crunching and normalizing location data for financial performance. Data is good; but incorrect and misleading data is worse than no data.
Advan is the leader in the Big Data geolocation space, enabling participants in the financial industry to analyze foot traffic data across multiple sectors, including consumer services, energy, technology, healthcare, REITS, financials and others. Advan derives its datasets using multi parameter models that analyze cellphone location data crossed with curated geofenced areas.
Top tier institutional investors spanning from quantitative hedge funds to fundamental asset managers have been the main consumers of Advan’s products.
