Marcus Theatres Turns to Private Rentals, Online Concessions Ordering as Bright Spots in Dismal 2020 for Exhibition

Image Courtesy of Marcus Theatres

Total revenues for Marcus Corp’s fiscal 2020, which include both its hotel and cinema businesses, were down by 71 percent in a year marked by the negative impact of Covid-19 on the hospitality industry. 

Marcus Theatres, the company’s cinema chain, the fifth-largest in the domestic market with 89 locations across 17 states, had a particularly difficult fourth quarter with attendance down 90 percent compared to the previous year’s term. That decline was accentuated by an additional spate of temporary closures stemming from revised operating restrictions due to a surge of Covid-19 cases in the Fall and Winter. By year’s end, Marcus was only operating 52 percent of its circuit––with locations welcoming customers on Tuesdays and Weekends only. Since the Winter’s surge in cases, Marcus has been able to bring back approximately 70 percent of its locations heading into Spring 2021.

Among the few bright spots in 2020, Food and Beverage (F&B) revenues per person rose by 6.8 percent at comparable theaters in fiscal 2020. The circuit credits that bump to its investment in online and mobile concession ordering. “Given our focus on F&B, we were one of the first theater chains to offer the ordering of concessions on our website and mobile app,” said Greg Marcus, Marcus Corp CEO, in a call with investors. “We had already developed this technology pre-Covid, and we’re in the midst of rolling it out at several theaters,” he said. “When the pandemic hit, we accelerated our plan, and we now offer this technology in all of our theaters. Not only is it a great customer convenience that will reduce our labor requirements, we believe it is contributing to our already highest among the major theater chains average concession revenues per person and will likely only get better over time.”

On the programming side, Marcus Theatres has kept amenable price points for select showtimes, charging as little as $5 per ticket for library titles while applying regular pricing on first-run new releases. Most notably, the circuit has found particular success with the launch of its private rental program, Marcus Private Cinema (MPC), where moviegoers can reserve their own auditorium with up to 20 guests. The MPC program has three pricing tiers; new releases are offered at $175 for the first two weeks of their run, going down to $149 in subsequent weeks. Library content is offered at $99. In 2021, the circuit made MPC private rentals available to book online, without the need to coordinate with sales staff, which helped it gain further traction in the market.

“In large part because of this program, we’ve seen our overall market share of U.S. admissions revenues increase by approximately 50 percent during the first 2 months of 2021,” said Marcus. “Our market share on some individual films has more than doubled compared to our historical averages. Nearly 90 percent of the shows during this time period were booked directly by the customer online or on our app; we estimate that we are averaging approximately 13 people per showing.” 

“Even after our business returns to normal and studios begin to once again release new films on a weekly basis, we believe there will be a place for MPC, particularly as a way to enhance traditionally slower periods of any given film week,” he added. 

Like other circuits, Marcus Theatres is emboldened by the recovery cinemas are currently experiencing in the APAC region, where a lower count in cases and pent-up demand has helped the industry rebound. “While some have wondered whether customers would return to the theaters after this was over, all you have to do is take a look at what has happened in China and Japan. Both of these countries have experienced record-breaking box office performance on several films, which we find very encouraging, and we hope is a harbinger of things to come here in the U.S. as we get the pandemic under control,” said Marcus. 

Image Courtesy of Marcus Theatres
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