Maximizing real estate: New theatre designs provide revenue opportunities


Last month, our focus was on the alternative menus that are available in the movie theatre. There are many reasons behind this trend, such as consumer choice, improved equipment and operational ability, and the desire to provide an enhanced experience to match the entertainment. One big reason it’s all possible is that revolutionary digital technology requires less space for projection, so that the real estate of the theatre is much more flexible. The area outside the auditorium is now bigger and more adaptable. Theatre operators have seized the opportunity to remodel or build new, and create a fresh take on the layout of the movie theatre.

There are four areas of the theatre real estate that contribute greatly to food and beverage revenue: lobby and hallways, lounge areas, cafés and bars, and restaurants. The opening foyer (lobby) is a space that was often very inviting, very large, and very unprofitable. There are many different approaches to these spaces, but some generalizations can still be made. Many theatres back in the ’20s and ’30s were built to compete with opera houses and live theatre and hence the lobby was built with the need for a grand entrance. This concept was very useful when the trend of snacking in the movie theatre became a mainstay. The lobby could now share space with the concession stand and make the area more profitable.

As the years went on, the grand entrance wasn’t so grand anymore and the concession stand wasn’t so large, but it worked. Hallways were also not very big; they were considered necessary conduits to the auditorium and not much more. Amazingly, this design scheme did not change for many decades. But in the ’80’s and ’90s, movie theatres truly began to grow in size and design diversified, and stadium seating in some form became standard. But coupled with projection requirements, this still did not allow for great increases in the flexible spaces. This has changed with the redefinition of stadium seating, auditorium size, digital projection, and the need to expand our value proposition.

Today the lobby is home to loyalty-program kiosks, ticket kiosks, arcade games, ice-cream bars, coffee bars, beverage bars, and special promotions. The meaning of a grand entrance today is dramatically different and the consumer expects to be engaged with their first step into the facility. The hallways have also benefited from some of the freed-up space from auditorium shifting; they are wider and well-lit, offering snack machines and remote concession stands. The hallways are also filled with games and lounge areas, all working in tandem to entice the consumer to come earlier and stay longer. As the alternative content available with digital has brought sporting events and concerts to the screen, the enhanced lobby and hallways have been able to provide a feeling to the consumer that the real estate is not just about movies.

Lounge areas can be found in the lobby, the hallways, or as separate areas completely segregated from the auditoriums. Lounge areas are often accompanied by coffee, beverage or dessert bars. They lend themselves to lingering, and these bars offer nice accoutrements to encourage a longer visit. When the theatre design process allows for leisure/lounge spaces, it invites the consumer to stick around, in a comfortable fashion. We have often said as an industry that the biggest counterargument to home theatre is that people are social creatures who actually do want to leave their house from time to time. Providing lounge seating as a place for people to congregate and socialize, especially teenagers, goes a long way in providing overall value to the consumer, not just a great movie.

Cafés and bars can be integral to the lounge, as stated, or they can be standalone spaces anywhere in the theatre. This aspect of theatre offerings has truly exploded over the past five years, as they are flexible, often mobile, and require less upfront investment. They can also be trendy and even cater to specific film promotions. The opening up of the theatre design, to push the walls of the lobby out and back, has created the necessary space to bring in cafés and bars. You can diversify and expand the food and beverage offering without having to completely retrofit your concession stand. Just build a standalone entity and offer something completely different from your concession stand.

Restaurants carry the concept of in-theatre consumption to its fullest extent and offer complete dining to the theatre customer. They were not part of any theatre construction until the last 15 years, and have only become truly popular in the last three to five. They vary in range from quick-service restaurants (QSRs) to expensive, upscale restaurants, both intended to entice the customer to come to the theatre for dinner and a movie. These generally must be built into a new theatre design, but fortunately have more space available today. The equipment that is necessary to run a restaurant has also become more efficient and easy to operate, making it an easier endeavor for theatre operations. Some theatres contract this to a chain name restaurant or service company as opposed to hiring the expertise in-house. But either way, adding a restaurant to a theatre can capture all the discretionary spending that the consumer has allocated for the evening, not just entertainment.

It always comes down to the bottom line, and in this context it means you can use all the real estate in the theatre to offer opportunities to engage the consumer. This is really an overall value proposition for the facility that will help you compete with video-on-demand or the next big threat to theatre attendance, whatever it may be. The construction of the theatre must include spaces that are dedicated to current or future consumer trends that we need to incorporate in order to stay ahead of the competition.

Please send comments to Anita Watts at