Shopping mall owners are worried over the low occupancy and average business at multiplexes in the last three-four months, even as they hope the cinemas will bounce back with good releases being lined up for July. Owing to the faltering revenues of cinema halls, some mall owners are even considering reducing the space allocation for multiplexes in their future projects.
Mall owners said that the movie Pathaan, which was released in January this year, has revived hopes for multiplexes in terms of business, and footfalls at cinema halls have increased. But after January, footfalls at theatres have been thinning.
Earlier this month, PVR-INOX, the multiplex chain operator, in its fourth quarter (Q4) financial year 2022-23 (FY23) earnings call, said they witnessed about 168 million footfalls in FY20. Compared to that, the company saw only 140 million footfalls in FY23.
Although Q4 started off on a high note with the blockbuster success of Pathaan in January, admissions in February and March were dismal due to lacklustre performances from other Hindi films.
Also Read: PVR Inox to shut down over 50 screens in the next six months
The company said that it has delayed all new handovers in view of the “volatility at the box office”.
Harsh V Bansal, Co-founder of the Unity Group, which operates a number of malls across Delhi and Punjab, said that on average the multiplexes have seen 25-26 percent occupancy in the last 3-4 months, which is “worrying” from the business point of view.
He said in May it rose to about 40 percent due to the movie, Kerala Story, which revived revenues to an extent, but it again went down, which is not a good sign for the long run.
“Some big movies are lined up for release in July. We are pinning our hopes on that. If such trends continue, then mall owners will have to think of rejigging and may reduce the space allotted to cinema halls in their upcoming malls,” Bansal told Moneycontrol.
Better ROI
He said that the Unity Group has already decided to reduce 11 cinema screens in its upcoming two-three shopping malls. Bansal also said that replacing cinema screens with food and beverages is a more viable option for mall operators in terms of revenue.
“By reducing one cinema screen, a mall operator can open two restaurants. So, if I reduce two cinema screens from a multiplex in a mall, then I will be able to open four restaurants. That is a more profitable business proposition,” he said.
PVR-INOX said that the company has also decided to close around 50 cinema screens within the next six months. These screens either operate at a loss or are situated in malls that have reached the end of their life cycle, with little possibility of revival.
Manoj Gaur, Chairman and Managing Director (CMD) of Gaurs Group, which operates a number of malls in Noida and Ghaziabad, said that cinema halls were doing only “average business” for the last few months, but termed it a temporary phase.
“Recently, there have not been hit films with good content. So, multiplexes are not doing robust business. Footfalls at cinema halls in malls have decreased. However, this is a temporary phase and will pass soon,” Gaur said.
PVR-INOX added 79 screens in Q4 FY23, taking the total tally of new screen additions in FY23 to 168 screens for the combined PVR-INOX circuit.
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