Are Movie Theaters Recovering in the Wake of COVID-19?

Are Movie Theaters Recovering in the Wake of COVID-19?

The movie theater industry is at a critical juncture. At the start of the COVID-19 pandemic, many theaters closed their doors to movie lovers, and movie goers turned to streaming video and drive-in theaters. Now, most movie theaters have reopened, but with revamped business practices like drive-in movie options and reduced seating capacity. Are consumers still interested in going to theaters? We analyzed foot traffic to Regal Cinemas, AMC Theatres, and Alamo Drafthouse to see if consumers are heading back to movie theaters.

Are Consumers Going to Movie Theaters?

Foot traffic to Alamo Drafthouse, AMC, and Regal started to decline in March due to movie theater closures, and reached its lowest point in April. All three theaters began to recover foot traffic in late spring and summer as COVID-19 restrictions eased, and remained consistent throughout August and September.

Which Movie Theater Company is Recovering Foot Traffic?

Regal Cinemas recovered slightly faster than Alamo Drafthouse and AMC Theatres. In September, foot traffic to Regal Cinemas was 52% lower compared to February, while foot traffic to Alamo Drafthouse and AMC was 57% and 68% lower, respectively. Regal, the second largest movie theater chain in the U.S., reopened in August, but then closed again on October 8 due to COVID-19. Alamo began reopening select venues in July, but still didn’t recover as quickly as the others. AMC, which is the largest movie theater chain in the U.S., reopened in August as well, and is right behind Regal in terms of foot traffic recovery.

It is interesting to see that Alamo Drafthouse, known for its in-food service during movies and fun movie nights, is underperforming compared to its competitors. Alamo’s experience-based movie theater model might not work as well with COVID-19 social distancing mandates in place. In July, Alamo implemented “Your Own Private Alamo,” which encourages movie goers to rent a movie theatre space for private screenings. This may have contributed to a burst of foot traffic in August. Alamo has also recently added drive-in movie screenings at select locations.

The Future of Movie Theaters

Many business analysts are predicting that the future of movie theaters is bleak, but that remains to be seen. Movie theaters will have to be innovative to keep up their ticket sales and keep customers entertained safely in the wake of COVID-19. The movie theater of the future could look quite different and might even shift towards a drive-in business model.

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