Harkins Theatres president and CEO Mike Bowers divides the recent challenges into two distinct phases, noting that each presented its own challenges. First was the mandated closure period, and then there was the period of reopening during a continuing pandemic. “When the closure occurred, my attention was focused on our team,” he says. Initially, Harkins continued to pay everyone at full compensation. Then, Bowers says, “Once the CARES Act was passed, with the pandemic unemployment benefits, we were able to strategically furlough members of our team knowing that they would be eligible for unemployment benefits. In addition, we continued to cover 100% of their medical benefits, including the employee premiums, to provide a further level of security. Once this was complete, we were laser focused on reducing expenses across the board, from occupancy cost to office supplies; we scrutinized everything.”
At the same time, the company started working on new revenue-generating ideas. “During times of crisis, our communities have always looked to us to be a sanctuary and escape from the challenges and stresses of daily life,” Bowers notes. “But this time, we were not able to welcome them in. So instead, we innovated and looked for ways to stay connected to our guests and provide flavors of that entertainment experience that they could still enjoy.”
The first innovation was Harkins’ rapid pivot to curbside popcorn and treats. “We have been selling a large take-home popcorn called Harkins Big Party Popcorn to our guests for over a decade, so we had an advantage over our competitors in this area,” Bowers says. “The reaction to bringing this offering curbside was tremendous. We could not pop popcorn fast enough in some locations to satisfy demand, with guests lined up in their cars for almost a mile in some instances to take home some hot fresh Harkins popcorn or nachos for movie nights at home.” Harkins also launched a pop-up drive-in movie experience at the Chandler Fashion Mall, which, despite selling out each show, was not profitable for the company. “But the goal was really to stay connected to our guests and try to provide an entertaining break to the monotony of staying home,” says Bowers.
Permission to reopen brought a new set of challenges, Bowers relates, the first of which was to evaluate whether it even made sense to reopen, with movie studios barely releasing movies — if at all. “Then, we had to determine how to deliver the Harkins Ultimate Moviegoing® experience that our guests expect in a way that we were certain was safe for our team and our guests.” This required new equipment, new hospital-grade filtration, PPE, communication to guests and, most of all, detailed and thorough training and procedures for all employees. “With this done, but still lacking many new movies, we put our energies into finding new and creative ways to entice moviegoers back to the theatres,” Bowers relates. These included discounted pricing, classic films and film series and what turned out to be a great success — Harkins Private Movie Parties. “With Private Movie Parties,” Bowers explains, “we offered private auditorium screenings for as low as $99 for up to 20 guests. This was very well received and led to the launch of Private Gaming Parties where guests could use our giant screens for an epic console gaming experience with their friends.” The party offers had been available prior to the pandemic, but Bowers notes the packaging, promotion and “really attractive price point” were new. “Through a combination of these efforts and the subsequent slow but steady release of some new films, we secured our future through the pandemic.”
The Economic Roller Coaster
Along with the extensive expense reduction efforts mentioned above, Harkins paused on new expansion and shifted its focus to reinforcing its core theaters by completing three full theater remodels that included upgrades to Ultimate Lounger seating, expanded food and beverage offerings, in-lobby bars, adding Harkins Cine1 (Harkins’ premium large-format screens) and upgraded finishes throughout.
Another big focus was outward, says Bowers. “How could we best support our community and employees during the pandemic?” The Harkins Emergency Assistance Relief Trust (HEART) Fund was initiated to provide grants to help employees facing financial hardship immediately after a natural disaster or an unforeseen personal hardship. “And, with the hope of bringing some relief to the communities in which we operate, we donated excess PPE, surprised some healthcare heroes with popcorn and delivered nearly 60,000 bottles of water to local food banks, family shelters and emergency assistance organizations across the Valley.”
Noting that Harkins has been entertaining guests for more than 87 years, Bowers says 2020 was undeniably one of the most challenging years; the company lost more than 90% of its revenues. In fact, Bowers characterizes the impacts of the pandemic on the industry generally and Harkins specifically as “extraordinarily painful.” However, he says, “Harkins entered this crisis in a stronger position than our competitors and, though wounded, will continue to be in a strong financial position for the future.” But that’s a far cry from being recovered. “We are now only slightly improved at this point from a revenue perspective,” he says, “but with the success of some big (Godzilla big) movies this spring, an amazing slate of films for the second half of the year, and the success in the last few months of the vaccine rollout, we are very optimistic that we will start to build back to normal business in the near future.”
Staying Strong and Moving Forward
“I am extraordinarily bullish on our company and our industry going forward,” Bowers says, observing that the pandemic time at home has made it crystal clear that streaming movies at home is no substitute for the full, immersive moviegoing experience. “Our guests are desperate to come back to the movies and have told us and shown us this at every opportunity. With a slate of great blockbusters that have been ready and waiting to come to our giant screens, we are stacked for the rest of this year,” he shares. Following the kickoff with Cruella and A Quiet Place II on May 28, are huge films like Marvel’s Black Widow and In the Heights; Disney’s Jungle Cruise, Space Jam: A New Legacy, Suicide Squad 2, Dune, The Matrix 4 and Free Guy; Marvel’s Eternals, West Side Story, The King’s Man, Snake Eyes, Paw Patrol: The Movie, Peter Rabbit 2: The Runaway, Hotel Transylvania 4, Venom: Let There Be Carnage, Ghostbusters: Afterlife, Resident Evil: Welcome to Raccoon City and Spider-Man: No Way Home; not to mention Top Gun: Maverick and one Bowers shares is his personal favorite: the Bond series with No Time to Die coming to Harkins Theatres in October. “That,” he says, “is an almost unparalleled list of huge blockbuster movies.”
Harkins will also be launching a new website and mobile app this year that Bowers describes as a quantum leap in technology and guest service, while continuing to be “laser focused” on enhancing the value of Harkins’ loyalty program (My Harkins Awards) for its guests, continuing to offer a variety of programming that includes art and independent movies, enhancing its state-of-the-art amenities, offering unique and elevated food and beverage in theatres, and diversifying its e-commerce product portfolio.
Says Bowers, “There is nothing like the magical moviegoing experience on the big screen. There is no comparison to streaming movies at home, any more than watching a game on TV is the same as going to the arena or watching a band on YouTube is the same as going to the concert.” And he shares, “Some of my favorite memories as a kid were on the occasion that I skipped school and spent the entire day watching movies in a cinema (paying for each ticket of course!), and I can still remember each movie I watched that day. That love of cinema and how it can impact people is what drives me today and what will always excite guests back into our theaters.”
Harkins Theatres is one segment of the June 2021 cover story “Fun Is Our Business: Survivors of a year that’s been anything but fun.”
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