Hoyts looks at new cinema format
Now under new owners, Hoyts Corp. plans to expand its circuit of premium screens and to introduce a new brand which will be pitched between a standard and top-of-the-range cinema.
Hoyts CEO Damian Keogh tells IF the company will add at least six premium cinemas, branded Lux, in Australia and New Zealand this year.
He likened the new mid-range cinemas to the premium economy section of an aircraft, with reclining seats and more legroom than standard seats, but without the in-cinema dining component of the premium cinemas.
ID Leisure Ventures, a company controlled by Chinese billionaire Sun Xishuang, bought the Hoyts group from Pacific Equity Partners for a rumoured $900 million just before Christmas.
PEP had acquired Hoyts in 2007 from West Australian Newspapers and Publishing and Broadcasting Limited for about $440 million.
David Kirk has stepped down as chairman of the Hoyts group as his position has been abolished. A new local board is being assembled.
“We expect the new owners will have a longer-term view on return on investment than private equity,” Keogh says. He and his senior management team will embark on a roadshow of the company’s locations in Australia and New Zealand next month to prioritize a new capital investment strategy to present to the new owners.
Last November Hoyts Cinemas began upgrading its premium cinemas to compete with Event Cinemas' and Village Cinemas' Gold Class locations, starting with Hoyts Lux at Hoyts Broadway, consisting of three screens each with 31 reclining seats, a bar and in-cinema waiter service of food and liquor.
Previously its premium offering consisted of La Premiere (rows of seats at the back of auditoria) and Directors Suite bars.
In the past two months the Lux brand has opened at 10 locations including Hoyts Entertainment Quarter, Highpoint, Melbourne Central, Victoria Gardens and Sylvia Park in New Zealand.
The results have been impressive. “We have more than doubled admissions at our premium sites,” he says.
In mid-2014 the company decided to shelve Video-on-Demand service Hoyts Stream which had been in development for more than two years, figuring the hefty upfront investment was too risky.
Keogh hasn’t changed his mind on VoD, observing, “It is not a core focus for the business right now.”