Seating Boom: How Theater Renovations Can Impact Exhibition in 2018
Premium seating continues to be a boon for the exhibition sector, with circuits of every size investing the required capital to renovate existing theaters and incorporate the concept in new-build designs. Consumers have taken note of the change—premium seating is now a familiar new feature that has raised the comfort standard for moviegoers across the country.
Coming off a slew of several high-profile acquisitions, AMC has prioritized reseating across its newly expanded circuit. A high number of previous Carmike locations are targets for renovations in the U.S. In Europe, the company expects seven Odeon locations to have completed renovations that accommodate recliner seating. According to statements from AMC CEO Adam Aron in a recent investor call, the company plans to have at least 25 Odeon locations equipped with recliners by year-end 2018, including its flagship Odeon Leicester Square location. Aron compared current reseating results at Odeon to those experienced by the U.S. circuit at the turn of the decade.
Regal, the country’s second-largest circuit, currently operates more than 18,000 screens with luxury recliners across 151 locations nationwide. The company expects 30 percent of the circuit to feature premium seating by early 2018, with the potential of an additional 10 to 15 percent to come by 2019. According to a recent investor presentation, Regal screens featuring premium seating generated $82 million in incremental revenue in 2016 versus the previous year, driving an attendance growth of 12 percent. This in turn helped average ticket prices at converted locations to increase by 7.3 percent.
During the company’s Q3 investor call, Cinemark CEO Mark Zoradi called premium seating “the top amenity” sought out by its customers. Cinemark has been busy adding recliners to its circuit, which it brands as Luxury Loungers, completing renovations at 247 auditoriums during the third quarter alone, raising its total count of premium seating–equipped theaters to 1,719—about 38 percent of its domestic circuit. Zoradi expects Cinemark to end the year with recliner seating at more than 40 percent of Cinemark locations in the U.S.
No other major circuit in the United States is as advanced in its reseating process as Marcus Theatres. As of Q3, Marcus features recliner seating at 66 percent of its first-run legacy locations. The circuit’s acquisition of Wehrenberg Theaters in late 2016 brought an additional set of marquee locations to renovate, a process already underway, with several sites already furnished with the company’s DreamLounger recliners.
With the landscape firmly set for future investment, Boxoffice spoke with several of the top premium-seating providers to get a better sense of where they think the industry is headed.
Premium Seating Roundtable
Where are we in the proliferation of premium seating in North America? What size circuits do you currently see adopting the concept?
This is a concept that started at home and was brought to the cinema industry with great success. It’s a re-creation of that home environment—great food and comfort—that allows people to feel at home. Almost all of the circuits available, from the largest cinema chains to the smallest independent theaters, are giving patrons a more luxurious and comfortable experience. Moviegoing is a chance to enjoy a moment outside the home, and luxury recliners can be enjoyed by people of almost all ages; just by pushing a button, they will be immersed in a very relaxing environment. This is mainly the reason why seating companies, together with movie theater owners, look to develop new designs, new features, new accessories, and a great spirit of service.
We’re still in an upswing regarding the switch to premium seating. There are many theaters yet that can improve their bottom line greatly should they convert, but the required investment can be intimidating for many. While premium seating has been completely adopted by large chains, medium-size circuits have slowly embraced it as well. In general, converting to premium seating elevates the customer experience, an element that is key these days to staying relevant in order to compete.
Telescopic Seating Systems
We are providing premium seating in all market segments but are finding that the definition of premium seating can vary greatly based on the location and market segment. We find that in large markets, recliners with Clean Sweep and Smart Power Systems are enjoying unprecedented growth and penetration. In small markets, TSS Premium Rockers have enjoyed tremendous growth. Both types of TSS chairs are premium seating for their markets. The common point in all markets that has aided our growth is customer focus on quality chairs. Customers who have spent heavily on other capital improvements have learned the importance of long-lasting quality products.
VIP Cinema Seating
Being the pioneer of the VIP luxury-seating concept, we are excited that it is being adopted worldwide—from large circuits to small exhibitors with only one location. What seems clear to us is that the conversion to recliner seating has been successful in large metropolitan areas as well as small towns. It is a proven statistic that a theater owner’s investment into a luxury recliner-seating conversion sees a rapid and significant return.
How have other innovations, such as luxury cinemas and dine-in theaters, impacted the premium-seating business?
They have impacted very positively, basically due to the interest shown by patrons. This interest was awakened thanks to the overall experience provided by theater owners, who were really into creating more comfortable spaces that moviegoers felt like returning to again and again to enjoy luxury seating with features like call buttons, lamps, cup holders that keep drinks cool or warm, service tables, and love seats arms. Moviegoers weren’t the only ones to benefit from this; theater owners have as well because seats have different traits that save them time and money. These can include automatic reclining and closing of the seats, sensors showing when seats are occupied or free, lifting seats, easy replaceable parts, slope floor installations in order to avoid major remodels, and easy access to seat mechanisms whether for maintenance or for cleaning. Premium seating also helps grow new opportunities, such as bars, restaurants, and more sophisticated concessions products.
The advent of luxury/dine-in cinemas would not be the same without luxury seating. Luxury seating is a critical component of the elevated experience that complements the luxury, dine-in experience.
Telescopic Seating Systems
We’ve found that luxury and dine-in-cinemas have had a positive impact on our seating business. Customers who are installing these amenities are looking for ways to maximize their capital budgets so the construction savings from Smart Power Systems become immediately apparent and needed. Likewise, the customers with luxury cinemas and dine-in-cinemas are more focused on immaculate cinemas and understand the higher cleaning and operational costs. They realize health inspectors visit restaurants more frequently than historical “popcorn only” movie theaters, and luxury cinema patrons demand a clean environment. Therefore TSS’s Clean Sweep System, which makes recliner cleaning dramatically easier and less expensive, becomes a required feature to successfully compete.
VIP Cinema Seating
We have developed a range of custom options to suit the unique design perimeters associated with specialty concepts such as in-theater dining. Each exhibitor tends to have specific requests, and we work closely with our customers on developing innovative products to meet those needs.