← Business Metric: Operational (all topics)
Occupancy rate
What it is
Seats filled as a percentage of seats available across all shows. Exhibition is a high fixed-cost business - rent, common area maintenance, staff and utilities are largely invariant to how full the auditorium is
Break-even for Indian multiplexes sits around the low 30s in percentage terms, so the gap between a good year and a bad one is a few percentage points of occupancy
Impact on industries
- Extreme operating leverage in both directions - once fixed costs are covered, incremental admissions drop through at very high margin
- Entirely content-dependent and outside management control: a weak release slate empties auditoria regardless of how well the circuit is run
- Screen additions dilute it mechanically, so the industry's growth strategy works against its most important profitability metric
- Rent and CAM are contracted with escalation clauses, so the cost base rises annually whether or not occupancy does