AMC Theaters expects to invest $200 million this year as part of an industrywide response to a post-pandemic reality among consumers reluctant to trade in their cozy at-home movie viewing experience for stiff-backed seats and outdated screens.
The cinema chain, the world's largest, plans to invest in upgrading its theaters to duplicate the high-end amenities found at its best-performing theaters across the country, from plush reclining seats to high-tech laser projection on expanded screens.
This year's planned upgrades are part of AMC's Go Plan, a strategy to spend up to $1.5 billion on global renovations over the next seven years, what it calls "an ambitious investment in the future of moviegoing."
AMC's move comes as Cinemark, the third-largest U.S. cinema chain, aims to invest $225 million this year in its real estate portfolio, including both renovations and new development.
Such real estate commitments are made possible by recent sales gains for theater chains as moviegoers gradually head back to cinemas amid a long slump for the industry, with many customers lured by upscale amenities not available at home.
AMC brought in more than 62 million visitors to its theaters in the fourth quarter, marking a post-pandemic record for the company and a “healthy 20% increase” from a year earlier, according to CEO Adam Aron.
Still, the CEO told analysts that Leawood, Kansas-based AMC Theatres is “still not where we want to be,” but is expecting material growth in industrywide box office this year and beyond as Hollywood studios revive film releases after production pullbacks caused by the pandemic and subsequent actor and writer strikes.
Growing momentum
AMC Theaters, with about 870 locations worldwide including 600 in the U.S., raised revenue and narrowed losses as it chips away at deferred rents owed to retail landlords from the first year of the pandemic when theaters were shut.
The company reported total revenue topped $1.3 billion in the fourth quarter ended Dec. 31, up from $1.1 billion a year earlier, as it narrowed its quarterly net loss to $135.6 million, compared with a net loss of $182 million a year earlier.
The CEO said the pace of studio releases picked up considerably in the second half of 2024, and momentum is likely to build over the course of 2025.
In addition to a growing number of visitors, those moviegoers are spending more per visit on pricier theater offerings as well as food and drinks, executives said.
AMC's investment plan this year is in part based on significant business returns from such upgrades made to three locations that became among its highest grossing of 2024 — its cinema in Burbank near Los Angeles and its Lincoln Square and Empire locations in New York City.
Aron said the company plans to grow its annual investments in upgrades as it attains more growth capital in coming months.
Efficient growth
The company remains cautious about location expansion after opening one new location and closing three underperforming cinemas during the latest quarter. Chief Financial Officer Sean Goodman said AMC is continually evaluating its real estate, closing 192 venues and opening 62 for a net reduction of 130 locations or 13% since the start of the pandemic.
Goodman said AMC continues to shore up its balance sheet by reducing debt and extending loan maturities when appropriate. He said the company’s balance of deferred rent owed to retail landlords from the first year of the pandemic stood at $37.6 million at the end of 2024 — well below the $473 million reported by AMC as of March 2021 — and the company plans to pay down another $8 million of that balance during 2025.
Other cinema chains have responded to what has been slow but steady industry improvement with plans for new amenities and related real estate projects, as they seek to bring in customers with non-movie elements.
Cinemark Theatres, the nation’s third-largest chain, recently said it is returning from a development hiatus with this month’s opening of its first Gamescape by Cinemark in El Paso, Texas. The $20 million venue includes movie auditoriums, bowling lanes, arcade games and laser tag, along with a bar and restaurant, as Cinemark plans to expand the concept to other locations.
The movie theater industry remains far from full recovery. North American box office sales reached $8.7 billion in 2024, down 3.3% from 2023 and still nearly 24% below the $11.3 billion tally for pre-pandemic 2019, according to data firm Comscore.
Industry analysts have projected 2025 North American ticket sales will reach about $9.3 billion, as film releases increase but effects linger from studio production pullbacks of the past five years.