As of October 1st, Cineplex theatres will be raising ticket prices by 22 to 51 cents per ticket. In a released document, the reason given for the increase was to compete with the recent rise in minimum wage in Ontario from $11.25 to $11.40 per hour for adults and $10.55 to $10.70 for students.
The released document by Cineplex is labelled as “Management Only” and explains directions for how to answer guest inquires about the recent price increase. Largely, the price increase is due to minimum wage increases in some provinces by as much as 29 percent. In Cineplex’s second quarterly report it states that 89 percent of 13,000 employees make minimum wage.
Cineplex spokesperson Sarah Van Lange also states that minimum wage increases are not the only reasons for the rising prices. Van Lange explains that prices must remain competitive to supply operating costs, real estate, and locations of theatres in urban and rural areas.
In the past, the rise of ticket prices has resulted in a boost in the company’s revenue. In 2012, the rise of ticket prices resulted in the company doubling their profits at the box office, and promotional exercises increased concession sales.
In the Financial Post, RBC Capital Markets analyst, Haran Posner states that Cineplex would be able to increase revenue substantially if the company were to make a slight increase to ticket prices for new release films on weekends, where the company makes 70 percent of their revenue.
Rising ticket prices can also risk attendance numbers for the theatre that monopolizes 80 percent of the market share. Patrons may chose to find a cheaper theatre, buy tickets but skip out on concessions, or not attend the movie at all.
It also states in the quarterly report that box office revenue decreased 12.9 percent to $162.1 million and food service revenue decreased 10.7 percent to $96.8 million as a result of a 14.4 percent decrease in attendance for the year.
The decreases in revenue and attendance is suspected to be due to the top three grossing movies for the year: “Captain America: Civil War,” “The Jungle Book,” and “Finding Dory,” not overcoming the highest grossing movies from the previous year: “The Avengers: Age of Ultron,” “Jurassic World,” and “Furious 7.”
The decision to increase ticket prices cancels out the perk of a rise in minimum wage. Cineplex’s part-time employees receive two free movie tickets per pay period as employee benefits, but for students, a single movie may cost at least an hour of their working time.
