Industry News
Is Demand for Pet Care Services Declining?
black and white cat sitting in front of grey beige dog with money and downward arrow signs
Digital Marketing Trends to Watch Closely
By Duane Carey
Oh, what a roller coaster it’s been! Business was terrible during COVID, phenomenal for a while thereafter, and tightened or was mixed in 2023 for a lot of pet care facilities. To explain the ups and downs, let’s start by looking at the relative volume of searches for “dog boarding” over the past five years, and then talk about what this means.
The Worst of Times; The Best of Times
Demand for dog boarding—as well as daycare, grooming and training—was at an all-time low in April 2020. Many facilities permanently closed, while owners of others lost a lot of sleep. Although the COVID puppies arrived by Christmastime, most of the world was still sheltered at home, so demand in January 2021 remained anemic. But what a difference six months made!

Those energetic (and severely matted) doodles had gone stir crazy and so had their pet parents by mid-June 2021 when the economy had opened up in earnest—and open up it did. As people scheduled grooms, they also went on vacations, enrolled their pups in daycare and desperately sought training for these poorly socialized new family members. Demand shot to an all-time high the week of June 13th, 2021; a roller coaster, indeed. Statisticians would call this June 2021 peak an “outlier.”

The Pretty Darned Good Times
To date, that level of demand has not been seen again. In fact, the following summer peak in 2022 was just 84% (week of June 26th, 2022) of that all-time high in 2021. In 2023, it was even lower, at just 73% (weeks of June 18th and 25th, 2023) of peak demand. Statisticians would call this “reversion to the mean.” The rest of us would call it normalizing.
The Bad Times Return

You might wonder how much overall demand there was during the winter doldrums—our usually slow times of January and February. Again, we will look at search volume, or interest, relative to the highest point on record (June 2021). Pre-COVID (January 2020), interest in “dog boarding” was 31 out of 100. It fell to its lowest recent level of 24 in January 2021. Interest increased in the following years, reaching 34 in 2022 and 39 in 2023. But we saw a dramatic decline this year (January 2024), with search interest for dog boarding plummeting to 25, just one point better than COVID’s worst level.

graph showing 5-year trend for "dog boarding" searches
By the way, January dog boarding searches languished around 25 from about 2010 through 2017. The industry then started seeing much more demand in January 2018, in the high- to mid-30s. Therefore, the return to 25 is particularly concerning.
What Has Caused This?
As we analyze data for our clients throughout the country, everyone grew during 2023, but the rate of growth slowed for many, and that is what we clearly see in the Google Trends data. Simply put, there is less interest in boarding, training, daycare and grooming than there was in recent years. But have no fear—this is still a growing industry!

I call the 2021/2022 peaks the “sugar-high” years; they felt great but were not destined to last. Our data suggest that two influences are likely culprits: inflation and reversion to the mean.

Although there are mixed economic signals with decidedly more positives than negatives, the stifling inflation of the last three years tends to be the “loudest” economic factor for consumers.

1. Inflation. Although there are mixed economic signals with decidedly more positives than negatives, the stifling inflation of the last three years tends to be the “loudest” economic factor for consumers.

At 7% in 2021, 6.5% in 2022 and 3.4% in 2023, inflation has been well above the target rate of 2% that we’re used to. So, consumers understandably are slower to spend on less-than-necessary services. We’ve also heard many reports that pet parents are doing more price shopping than before. Indeed, the modifiers “cheap” and “affordable” are showing up with increased frequency for “dog boarding” searches. Much of this has manifested in fewer pet nights, if not fewer clients, because of shortened stays.

2. Reversion to the Mean. This is just the technical way of saying that things are getting back to normal; returning to the longer-term trend after the sugar-high years. The good news for our industry is that the long-term trend is up! So, there’s no need to panic. We just need to be smart while we deal with the adjustment.

To bolster the fact that the long-term trend is up and we’re experiencing a small correction in demand, Morgan Stanley reports that, whereas spending on pets increased a meteoric 11% during the pandemic, pet spending is expected to continue to grow at a compound annual growth rate of 8% by 2030. That is truly fantastic growth.

Although not an actual cause of the diminished demand for pet facility services, it’s important to talk about competition because it increases supply—the last thing you want to happen when demand is waning.
Further evidence is that the veterinary industry is scrambling to add as many as one-third more veterinary schools in coming years to meet both long-term demand and the current shortage of vets.
Competition
Although not an actual cause of the diminished demand for pet facility services, it’s important to talk about competition because it increases supply—the last thing you want to happen when demand is waning (i.e., there are more facilities supplying the services that fewer people are seeking). Competition has picked up with 1) new entrants to the marketplace, 2) many facilities expanding either their existing footprint or building additional facilities, and 3) many competitors spending more on digital advertising than ever before to try to gain market share. Many of the newest competitors jumped in because they saw dollar signs and didn’t realize just how hard this industry can be. Therefore, some of them won’t make it and will sell at a loss or break even.

Without naming names, we have also seen a significant uptick in ad spending for boarding by the large dog-walking services, the large pet supplies stores and a couple of the corporate-owned facilities (with a similar pattern for daycare, grooming and training, where applicable). They are all trying to concentrate market share while they can.

Be efficient with your marketing spend. Engage only in strategies and tactics that demonstrably work and are measurable. In most cases, so-called “branding” opportunities like billboards, magazines, TV and radio are neither measurable nor worth it.
The Strong Will Survive (and Thrive!)

Everyone who has been in business for a while understands that conditions cycle up and down, and that there are opportunities in both halves of the cycle. To take advantage of these opportunities, you just need to be efficient and smart, and here are a few tips to help you do just that:

  • First and foremost, run the business for profitability and excellent operational efficiency, always! Be very careful about carrying extra staff (your largest expense).
  • Be efficient with your marketing spend. Engage only in strategies and tactics that demonstrably work and are measurable. In most cases, so-called “branding” opportunities like billboards, magazines, TV and radio are neither measurable nor worth it. Even organic social media, if you are paying an outside firm, is often not worth it. The key with social media is to manage the posting and engagement in-house and let a digital marketing company handle the advertising.
  • Be aggressive and focus on gaining market share. You have many advantages over the apps and big-boxes—capitalize on them!
  • Upgrade your client base, if possible, with a heavier focus on clients with more disposable income.
  • Engage in defensive advertising to maintain your existing market share. Some of your existing clients are still searching “dog boarding near me” even though they’ve been to you before with satisfaction. The moment they make such a search, you are at risk of losing them forever. Therefore, it is wise to not only focus on the vaunted new client, but some of your existing clients are actually “new” if you have retained them while they are casually searching.

Duane Carey is the founder and lead strategist at IMPACT Marketing & Public Relations, a digital marketing firm that specializes in pet care. With a science background and an MBA in finance, Duane brings a decidedly no-nonsense, bottom-line, and data-driven perspective to marketing for his 50+ pet-care clients throughout the U.S. For an analysis of your digital marketing approach, you can reach him at Duane@ImpactMarketing.net

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