The Last Picture Show – Is Leisure Facing Hardships?

As businesses all over the country are feeling the effects of a combined recession, global conflict and price increases across the board in general, it’s no surprise to see that the leisure industry is also feeling the pinch.

We’ve already talked about the prospect of restaurants closing in droves due to lack of footfall, increases in costs and a general abundance of supply, especially in the casual dining sector. However, the next industry showing signs of distress is somewhat related. Leisure time has always been something valued by the British population, but with the cost of living crisis biting hard, going out and spending money without abandon has been on the wane.

This is reflected in the very real problems being encountered by established chains such as Cineworld, who have entered administration and face closing dozens of cinemas.

As the cinema chain continues to struggle under $5 billion in debt, Cineworld has confirmed it may file for bankruptcy in the U.S.

The COVID-19 pandemic has been tough on the movie industry. With theatres closed around the world, studios have been forced to delay release dates and rethink their distribution strategies. Unfortunately, not all companies have been able to weather the storm.

On October 5th 2022, Cineworld, the second largest movie theatre chain in the world, filed for Chapter 11 bankruptcy protection in the United States. The company cited “substantial” debt and the ongoing closure of its theatres as the primary reasons for its decision. With nearly 30,000 employees and 9,500 screens in 7 countries,

Cineworld’s bankruptcy will have a significant impact on the global box office. While it remains to be seen how this will all play out, one thing is certain: the pandemic has changed the movie business forever.

 A wake up call for cinema?

Following the lifting of lockdown restrictions, cinema chains were hoping to draw audiences back in with massive film releases like the latest James Bond film, No Time to Die, Top Gun: Maverick and Thor: Love and Thunder.

Tom Cruise’s Top Gun: Maverick has earned $1.8 billion at the global box office, making it one of the top 10 highest grossing movies of all time. In spite of this, Cineworld warned last year that there were still not enough major releases to attract cinema audiences and that this was hurting admissions.

As a result of films such as Avengers: Endgame and Frozen 2, global box office takings hit a record $42.5bn in 2019 before the pandemic. The box office performance of Jurassic World Dominion and Minions: The Rise of Gru were also strong in 2022.

Overall box office takings were down 32% from 2021 to 2022, compared to around a third in 2019. Additionally, during the lockdowns, streaming services surged in popularity, competing with cinema chains. This is the key to understanding why going to the cinema might be dying out as a legitimate night out.

If cinemas are to attract more audiences, they need to diversify, some of the more esoteric and unusual cinema experiences have mean that independent chains have succeeded. Where cinemas can act as cafes, bars and restaurants alongside their showing of films can be held up as examples.

Are you a leisure firm struggling with making the books balance or need some advice? Talk to us today.