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Multiplexes Will Emerge Stronger, Smarter And Battle Hardened: Alok Tandon, CEO, Inox Leisure
Multiplexes were hit almost immediately as theatres throughout the country were closed and major movie releases postponed due to COVID-19 outbreak.
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Among the earliest casualties of the COVID-19 pandemic were the exhibition and multiplex players. The industry was hit almost immediately as theatres throughout the country were closed and major movie releases postponed due to the virus outbreak in the country.
So far the revenues have dropped to nil and the movie business might take a while to get back on its feet, post the situation is under-control. The road to recovery is slow for the industry but with innovation and precautions the cinemas will continue to entertain its audiences in times ahead.
In an interview with BW Businessworld, Alok Tandon, CEO, Inox Leisure Ltd spoke about the impact of COVID-19 on the multiplex and exhibition industry and about the road to recovery.
How has the Covid-19 crisis impacted the multiplex industry in India?
Never ever in the history of mankind, any event would have left such an impact like what we are witnessing right now, with virtually the entire world under lockdown.
Cinemas have been extraordinarily impacted. You can create counter-plans for weak quarters, you can plan for recessionary spells, you can counter slowdowns, but you cannot plan for a situation with 100% shutdown of cinema operations. But we are looking at it from a humanitarian perspective.
We are ascertaining various scenarios, and how we are going to emerge out of those. There is no doubt that once we survive this phase, which has to culminate at some point of time, we will emerge stronger, smarter, battle hardened, good enough to face any challenges in the future.
What is the financial impact of the crisis and how are you managing the cash flows?
The impact on financials is significant, especially if you look at it on a Y-o-Y basis, but we had already braced ourselves for this impact, and are prepared to take it into our stride. It is now a question of emerging out of it and bouncing back to our usual buoyancy, which we, as a company are known for.
In a situation like this, wherein revenues have plummeted to zero, the first thing which comes to mind, is reducing expenditures. We are having a close look at every expense item, and working on ways to control the same.
No doubt, since the cash registers have not been ringing, there is a tremendous impact on the cash flows. But our balance sheet hasn't completely destabilized. We have our feet firmly on ground and we are monitoring the situation closely.
In your view, how will the road to recovery pan out?
Considering that it is a nationwide epidemic, the resumption of operations entirely depends on the decisions taken by the health authorities and the government. While it is a stressful situation from a business perspective, we would want the country to be virus-free at the earliest. Whenever we get a go ahead, we will ensure the best of hygiene and safety. The other important aspect is going to be the decisions made by the studios as well.
What are some of the measures that you plan to take for a safe cinema experience?
Besides ensuring hygiene and safety would be to gain the confidence of our patrons. We have identified various ways to deal with it. On the operational front as well, we will have to innovate and think differently to ensure social distancing once the cinemas resume services. We will continue to carry out non-invasive temperature checks at the entrances. Hand sanitizers will remain available across the floor. Deep cleaning and disinfecting processes will continue to remain intense.
Cross-allocation of seats is one measure, which would allow us to ensure that two guests are not assigned adjacent seats. We will have to block the seats accordingly, so that the seats are available in this manner, whether booking at the box office, or on an online platform.
Other measure can be to program the shows in such a manner that intermissions of two shows do not occur simultaneously. This will help us to ensure that the food counters and restrooms do not get too crowded. We will keep the intensity high on kitchen stewarding.
We are absolutely certain that the cinemas across the country will witness the same vibrancy and sentiment post the resumption. We have complete faith in the passionate cinema lovers of our country, and we know for sure that their appetite for the giant screen would know no bounds, whenever normalcy would be restored.
What are your expectations from the government for a smooth revival of the industry?
Support from the Government is also much-needed for us to come out of this situation. The Multiplex Association of India has written to the relevant ministries and sought support on various fronts. We have requested for financial support in the form of salary subsidies, interest-free loans for 3 years, exemptions from various taxes and duties, like GST, Show tax, LBETs and Property taxes for a period of 1 year, waiver on electricity minimum demand charges for 1 year and auto renewal of licenses and permits for the next 1 year.