With our latest location data, we analyzed foot traffic for three leading theater chains – AMC Theaters, Regal Cinemas, and Cinemark – to see how the movie theater recovery is progressing and to understand how inflation and changes in media consumption are impacting the behaviors of moviegoers.
Monthly Visits Climbing Towards Pre-Pandemic Levels
Year-over-three-year (Yo3Y) data for the first half of 2022 shows that visits to the three leading movie theater chains are steadily rising to pre-pandemic levels. And in spite of rising inflation, the movie theater recovery has accelerated over the past three months, with June 2022 visits to AMC Theatres, Regal Cinemas, and Cinemark down only 24.9%, 15.5%, and 4.1% relative to June 2019 – the smallest monthly visit gap seen all year. It’s likely that the continued success of this summer’s blockbusters are driving these trends in June, with Top Gun: Maverick, Doctor Strange in the Multiverse of Madness, and Jurassic World Dominion topping box office charts.
The shrinking visit gaps indicate that while many may have grown accustomed to streaming movies during the pandemic, home viewing still hasn’t replaced the experience of seeing a movie in theaters; rather, consumers appear eager to return to theaters in 2022 despite inflation and tighter budgets. And it’s important to note that, although overall visits are down, the price of movie tickets has gone up with inflation – which means that the lingering visit gaps are not necessarily inhibiting movie chains from reaching – or even exceeding – their pre-pandemic revenue numbers.
Lessons From July 4th Weekend
Although the monthly Yo3Y visit gap is closing gradually, analysis of weekly visit data for movie theaters through June 2022 and July 2022 shows several weeks of significant drops in Yo3Y visits. This can likely be attributed to the tough comparison posed by the highly successful summer 2019 releases of Aladdin, Toy Story 4, and Spider-Man: Far From Home.
However, the trend didn’t hold true for the week of July 4th, 2022. It should be noted that the week of July 4-10 2022 is being compared to the week of July 8-14 2019 – i.e. a week in 2019 with no equivalent holiday – which likely helped this year's Yo3Y weekly comparison. But the calendar differences were not the only factors to contribute to this year’s July 4th success. Minions: The Rise of Gru, released on July 1st 2022, shattered records for the holiday weekend and likely drove much of the foot traffic spike the following week. The success of Minions: The Rise of Gru proves that animated family films – which struggled during the pandemic – have the potential to draw families with young kids back to the theaters.
Changing Behaviors Behind the Movie Theater Recovery
The steadily increasing visit numbers warrant a deeper examination of consumer behaviors driving the recovery, starting with True Trade Areas (TTA) for each theater chain. Looking at TTAs, covering 70% of a brand’s consumers, shows that the TTA for all three chains analyzed grew in the first half of 2022 (H1 2022) compared to the first half of 2019 (H1 2019).The starkest example is Cinemark’s Yo3Y TTA increase of 5.1%, from 131.9 in H1 2019 to 138.6 sq. mi in H1 2022. This indicates an uptick in engagement from a wider area – despite gas prices remaining high.
One reason why consumers may be willing to travel farther to cinemas is that they are also going less often. For example, in the second quarter of 2019 (Q2 2019), AMC Theaters customers went to movies an average of 1.7 times, but average visit frequency dropped to 1.5 times in the second quarter of 2022 (Q2 2022). The drop in visit frequency could mean that moviegoers are willing to spend more per movie outing – not only on gas, but also on concessions. And theaters are investing in making these sales as frictionless as possible, with digital integration allowing customers to pre-order and pick up or have their concessions delivered to their seat.
The change in moviegoer behavior may reflect consumers’ new perspective on the role of theaters as a predominantly social occasion. People aren’t going to the cinema as often as they were in 2019, so when they do go see a movie in theaters it’s a bigger deal, and people are willing to drive further and spend more on each out-of-the-house movie night.
Comparing H1 2019 and H1 2022 visit times to all three chains offers further support for the shift in movie-going from a routine activity to an exciting outing. For all three chains, the Yo3Y share of mid-day visits are down while the Yo3Y share of evening visits are up. Demographic data shows that the distribution of moviegoers hasn't really changed. This means that consumers are less likely to go to the movies on a random afternoon as a way to pass the time and are more likely to consider visiting a cinema to be a special occasion for which one dedicates an evening. And while the visit gap is unlikely to fully close in the near future, the relative rise in evening visits and respective drop in mid-day visits also bodes well for theater revenue, as evening tickets are generally full-price while matinees are often discounted.
The first half of 2022 shows movie theater foot traffic climbing toward pre-pandemic levels – no doubt an encouraging sign. Well-performing summer releases seem to be driving this trend. Notably, the release of Minions: The Rise of Gru shows that family films along with action and superhero movies can draw movie-watchers back to theaters.
However, given the shifts in behavior, a full cinema recovery may not hinge on leading theater chains fully closing their Yo3Y visit gaps since consumers are willing to spend more per ticket and on concessions for each movie outing. And with hot releases expected into the fall and holiday season, we anticipate positive trends for movie theaters to continue.
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