Premium Seating Roundtable: A Survey of the Latest Progress in the Expansion of Premium Seating

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In 2018, the installation of premium seating in both North American theaters and cinemas across the globe has continued apace. Indeed, every major chain continues to extend the footprint of luxury alternatives to traditional theater seating that, in the words of the Marcus Corporation President and Chief Executive Gregory Marcus, gives “people a reason to get off the couch.”

AMC, the world’s largest theater chain, has significantly expanded its global premium-seating footprint since December of last year, having installed recliner seating in over 470 auditoriums through Q3, with plans to convert an additional 198 auditoriums by the end of the year. In the U.S. alone, the exhibitor now features recliner seating at 288 locations representing just under 2,800 screens, or roughly 30 percent of screens in the domestic circuit.

While the installation of premium seating can diminish capacity by up to two-thirds, AMC reports that the switch to recliners has counterintuitively driven a 47 percent average increase in attendance at affected locations in the first year after renovation. An uptick has also been noted by the world’s third-largest exhibitor, Cinemark, which has thus far converted 53 percent of its domestic circuit to premium seating, with plans for 55 percent coverage by year’s end.

“Recliner seats remain the most sought after in-theater guest amenity given their comfort and enhanced experience,” Cinemark CEO Mark Zoradi said on the company’s Q3 investor call. “As a result, they continue to generate returns in excess of our 20 percent ROI threshold driven by attendance growth, incremental pricing power, and outsized concession per caps.”

Marcus Theatres, which just acquired Movie Tavern’s 22 U.S. locations (representing 208 screens) in a $126 million deal, has been as bullish as any chain when it comes to investing in premium seating. In the first three quarters of 2018 alone, the company installed all-recliner seating at an additional six theaters, with one more to be completed by the end of the year. Like AMC and Cinemark, the company reports attendance has been “favorably impacted” by these installations, which are often paired with premium large-format (PLF) screens and/or dine-in theaters for a comprehensive premium experience.

With metrics demonstrating the effectiveness of premium seating in boosting attendance, the move toward luxury options has been on a roll for several years. That said, with a significant portion of auditoriums now equipped with recliners and other premium seating options, some exhibitors note that installations may slow a bit as we move into 2019.

“We also anticipated as you get further and further down the circuit … there are going to be places where you’re simply not going to recline because the market doesn’t dictate it; you don’t think you can generate the incremental attendance to help pay for it,” said Zoradi on the Q3 call. “And also in some places you just want to hold on to the seats and you want the capacity.”

To get a more thorough analysis of premium seating in 2018, Boxoffice solicited the input of several leading manufacturers to get a sense of where we’ve been and where we’re headed as the year winds to a close.

 

Premium Seating Roundtable

 

What is the balance between new constructions and retrofits that you’ve seen with your projects in 2018?

Irwin Seating Company

We continue to see significant demand for our cinema seating solutions in both new construction and retrofits. This said, we have seen more retrofit demand in the past couple of years as a result of the recliner “boom.”

Telescopic Seating Systems

Our movie theater work has been 50/50 between new construction and retrofit. Both market segments have been strong.

Dolphin Leadcom Seating

New projects and retrofits go hand in hand, with about a 50/50 split. The new premium luxury recliners/seating goes extremely well with retrofitting old projects, especially those with sloped floors. Older stadium auditoriums can be easily retrofitted to fit larger luxury seats as well.

Camatic Seating

The work during 2018 was predominantly retrofits. This was not just the standard retrofit but full-scale site refurbishments that provided for an entirely new patron experience

 

How has the rise in PLF auditoriums impacted your business? Have you seen dine-in cinema also act as a catalyst to premium seating?

Irwin Seating Company

Both PLF and dine-in cinemas are catalysts for recliner and/or premium seating. Updated and upgraded seating are part of enhancing the cinemagoing experience for the patron and also differentiating/creating competitive advantage for the cinema owner.

Telescopic Seating Systems

We’ve been able to offer premium seating products to meet the PLF demand. Our Rocker Deluxe, Rocker Select, and Compact Recliners with auto/emergency-close features offer great seating choices for the PLF market, especially when there are contractual requirements on seat counts. Our premium seating installations in dine-in cinemas have increased dramatically.

Dolphin Leadcom Seating

Adding these luxury chairs to premium large-format auditoriums has created a great opportunity for the industry. All of which has allowed us to innovate new products to accommodate the needs of the industry. Dine-in cinemas have helped boost the demand for luxury seating, as well as create new innovations to integrate the new food services into the cinemas/seating.

Camatic Seating

The shift to premium seating has meant everything we produce is just bigger. It’s seen a reduction in total chair quantities but obviously the buy price is higher. It’s the logistics that have been impacted most of all along with the bespoke site requirements depending on the dine-in model.

 

How has the seating business changed or evolved in the last three years?

Irwin Seating Company

Recliners continue to be the product of choice … yet recliners aren’t used exclusively. There continue to be many scenarios whereby rockers and other cinema seating solutions are used due to capacity constraints and/or the competitive landscape.

Telescopic Seating Systems

The TSS team has spent years designing and manufacturing automotive power seat adjusters and telescopic seating systems. A recliner is a complex piece of equipment, but it doesn’t compare to a telescopic platform that starts at 48 inches retracted and extends to 45 feet when in use position or to an automotive powered seat adjuster that must withstand the crash loads.

Dolphin Leadcom Seating

The dynamics of traditional seating and luxury seating has taken a drastic lean toward 100 percent luxury seating in competitive markets.

Camatic Seating

Obviously the shift to recliner seats and dine-in cinemas has been the biggest change. An increase in clients wanting bespoke requirement has meant that as a business we have to remain agile. The current evolution seems to be a desire for interactive seats. Whether it’s ordering food and drink through to vibrating seats … the seats are interactive.

 

What has been the most memorable cinema project you’ve worked on this year?

Irwin Seating Company

We look to create long-term relationships with our clients. As such, we value every project and every client irrespective of size or location.

Telescopic Seating Systems

That is very hard to say. We’ve done some very high-profile premium installations. The TSS team isn’t perfect but we try to make sure every customer is happy with the results. So the most memorable projects are when I get call from a customer to tell me how their TSS team went out of their way to make their project a success.

Dolphin Leadcom Seating

As for the most memorable, we have done several major projects with the Premier Cinema Group and Cinema West, with many more amazing projects in line for 2019 all over the United States.

Camatic Seating

We would never pinpoint a single project as a standout because even though particular ones may be more memorable it’s the client’s reaction that makes it important. No one installation is more important than the next. We are simply a key link in the supply chain, and we give our all regardless of the client. In summary, they are all standouts.