- Even during last year's surge of spending on leisure and hospitality, the effect of Spring Break travel was noticeable.
- Shift volumes for in-person hourly work increased the most for venues in Orlando in the East and San Diego in the West.
- Increasing labor supply for flexible work and changes in roles being booked affected hourly pay as much as demand.
Before the Covid-19 pandemic, Spring Break – a loosely defined period lasting through parts of March and April – was an annual boon to businesses especially in the warmer parts of the United States. Every year, when schoolchildren and college students got time off from classes, they and their families would go south for fun in the sun. Last year, Spring Break became something more: the kickoff for an unprecedented period of spending on travel, entertainment, and hospitality. But some of those warmer markets still got an extra boost.
It's especially sunny in San Diego
Spring Break is often associated with destinations in the Caribbean and the southeastern United States, like Miami, Orlando, and South Padre Island in Texas. But kids in the West also take a break, and many of them head to theme parks and beaches on the other coast. So let's take a look at what happened last year in both regions.
To start, here are the changes in shift volumes between the two-month periods January-February 2022 and March-April 2022 in the East. We're tracking three industries here: logistics, food service, and venues. Logistics sits furthest from the customer-facing aspects of tourism; food service is closer, especially for big businesses; and venues include many of the places patronized by tourists. The Chicago metro area – not a traditional Spring Break destination – is included as a kind of control.
Even Chicago's venues got a boost as seasonal business and overall changes in spending patterns took hold. But the gains were much bigger in Miami (up over 50%) and especially Orlando (up over 150%). Orlando also had the biggest gains in food service. Logistics shifts, which are correlated with the movement of goods, fell in Chicago but were up in the Florida markets.
In the West, where we're using the Phoenix area as a control, the pattern for venues was much the same:
Beachy San Diego saw the biggest increase in shifts at venues (up about 130%), followed by Los Angeles (about 100%). Logistics shifts were also higher in San Diego, while they fell in the other markets.
Overall, it looks like the rising tide of spending on leisure and tourism lifted all boats across the country, but the Spring Break effect added even more business in its traditional hotspots.
A subtler story about pay
The surges in labor demand in Spring Break destinations might have been expected to raise hourly pay rates as well, yet this did not happen uniformly. Here is a similar chart for the East, but looking at changes in hourly rates instead of shift volumes:
In the Orlando area, where shift volumes rose the most, pay rates did increase by 3.6% or more in each industry between the two-month periods. Yet in Miami, pay rates actually fell in venues and food service as well. Rates fell the most steep in Chicago for food service, even though shift volumes rose.
Two factors were behind these changes to varying degrees in different markets. First, the mix of roles being booked in the industry may have changed; higher pay rates can simply signify more high-value roles. Second, increases in labor supply may have taken the pressure off pay rates. Roughly 2 million workers joined the Instawork platform in 2022, helping to match supply with heightened demand.
Here is the same chart as above for the West:
How did pay at venues drop so much even as demand skyrocketed? The mix of roles had a lot to do with it. In January and February of 2022, only 7% of the shifts booked by venues in San Diego were for Instawork's lower-skill roles (general labor, counter staff and cashiers, concession stand workers, and entry-level warehouse workers). In March and April, this share climbed to 29%.
But in Los Angeles, the opposite happened; the share of lower-skill shifts fell from 42% in January and February to 26% in March and April. Not surprisingly, average pay rose. All those Oscar parties needed their VIP servers!
This spring we don't expect to see the same enormous swing of spending into services as last year. There is less pent-up demand for them and less savings to fund them. Spring Break will still be a factor, though. So if you're in San Diego or Orlando, chances are there's a shift waiting for you.
These metrics, derived from data aggregated across the Instawork platform, compare the two weeks starting 2/23/2023 to the previous two weeks. To control for the overall growth of the Instawork marketplace, only shifts involving businesses that booked shifts in both periods are included:
$0.03 rise in hourly pay
1.6% point rise in share of short-notice shifts
0.7 hours drop in hours per existing worker
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