Cinema companies in Malaysia tighten belts amid revenue downturn from MCO

Cinema chains in Malaysia like GSC and TGV are taking steps to remain afloat during the ongoing Covid-19 pandemic. — Picture by Hari Anggara
Cinema chains in Malaysia like GSC and TGV are taking steps to remain afloat during the ongoing Covid-19 pandemic. — Picture by Hari Anggara

KUALA LUMPUR, May 26 — Faced with the spectre of the ongoing Covid-19 pandemic, cinema chains across Malaysia have begun taking steps to remain afloat while attempting to lessen its impact for the rest of the year.

One such organisation is TGV Cinemas Sdn Bhd, which operates 36 cinemas nationwide. Its chief executive officer Yeoh Oon Lai said the closure of places where large crowds can gather, as a result of the movement control order (MCO) first implemented on March 18, meant its revenue stream has presently dried up.

“The environment whereby our cinemas are closed is obviously very difficult but a necessary sacrifice. We have cut discretionary expenses as much as possible,” he told Malay Mail.

Yeoh said this meant reducing activities including marketing and promotional expenses, adding that other measures to be taken may include reduced operating hours upon reopening as business is gradually scaled up over a period of time. Over 80 million admissions were recorded in Malaysian cinemas for 2018 and 2019.

He said cost-cutting measures that are being evaluated include measured salary cuts for staff, but stressed that TGV aims to minimise the negative impact for its employees while ensuring their wellbeing is looked after.

“Presently we are liaising with the government on safety considerations and opening guidelines, and we hope to be fully open nationwide by July.

“Although we are certainly not closing any outlets, we will nonetheless consider a phased opening as well as shorter operating hours initially. This will allow us to fine-tune our new standard operating procedures (SOP) and ensure that the customer experience is as safe and pleasant as possible,” Yeoh said.

The SOPs to be implemented upon the reopening of TVG’s cinemas include placing hand sanitisers throughout all locations; temperature checks on each customer at the ticket tearing point; social distance markers at queue zones as well as social distance seating with two empty seats and an alternating row between each patron; and increasing time in between movie sessions to allow more thorough cleaning and sanitisation, among others.

Similarly, fellow entertainment company Golden Screen Cinemas (GSC) Sdn Bhd, which operates 37 cinemas nationwide, has tightened its belt in response to the downturn in business. Its chief executive officer Koh Mei Lee said all cinema refurbishments planned for this year have been pushed to 2021.

“We have also ceased all discretionary and non-essential spending and increased operational efficiency through manpower management and are also in discussions with our landlords on rental reductions during this difficult period,” she said.

An interesting development resulting from the MCO is the apparent longing by moviegoers for cinema snacks. Koh said requests were made on social media for food like popcorn and chicken nuggets.

“We are pleased to share that from May 2, we have been offering these cinema snacks via GrabFood delivery from three cinemas — GSC Mid Valley Megamall, GSC Melawati Mall and GSC 1 Utama.

“Furthermore, we have also planned a variety of attractive value promotions that will be available when we reopen for business. These promotions are part of our efforts to invite customers to return to the cinemas and rediscover the immersive, state-of-the-art entertainment experience on the big screen,” she said.

In the vein of TGV, GSC has also greatly reduced operational expenditure, refocusing its expenses on essentials that are needed to keep the organisation up and running.

“More importantly, we have placed a greater emphasis on ensuring that our family of staff is well taken care of during these trying times. Despite the loss of revenue, we have not cut the salaries of our full-time staff, who continue to undergo training and work from home throughout in preparation for our reopening.

“However, contract workers are currently furloughed temporarily in view of the long closure, as a measure to manage our manpower effectively. While we expect these measures to ease when the business picks up again in August, we may have to explore other measures should the situation not improve in the latter part of the year,” Koh said.

As with everything else, GSC will change the daily operation routines for its cinemas once they reopen, primarily by implementing safety and precautionary measures to protect the wellbeing of both staff and customers.

“Moreover, we are planning on a steady and gradual approach to opening by starting with fewer screenings and limited operational hours, which will also mean that we will require a smaller workforce.

“While there will be significant changes in the cinema industry, we do not predict the closure of any of our cinema branches following the lifting of the MCO,” she said.

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