Forecasting Report On Drive-In Theatres

WHAT ARE THE IMPORTANT CHARACTERISTICS OF A DRIVE-IN THEATRE?

A major characteristic of box-office and food sales at a drive-in theatre is weather conditions. For instance, it is true that drive-ins do not operate during the late fall and winter seasons (between October and mid-April) and therefore there would be no forecasted demand. It is most likely true that demand would be lower during the early spring and fall months due to cooler temperatures at night and the presence of insects, such as mosquitoes. Also, business would be slower during the late summer (August), as people are away on vacations and as the temperature and humidity are at a season high, which would result in a less comfortable experience. Presumably, un-forecasted extreme weather conditions, such as heavy rainfall or a heat wave, would result in less box-office sales ÐŽVthese would be random or irregular events. If box-office sales are low then it is presumed that food sales are similarly affected.

A second characteristic is weekly seasonality. It can be assumed that the weekends would have the highest sales as families and individuals have more time for leisure; children also have the weekend off and therefore, it would be more practical for them to watch movies in the evening. By the same token, days at the beginning of the week (Monday and Tuesday) would have the least sales.

Another characteristic is the type of movies playing on a given night. ChildrenÐŽ¦s movies would most probably result in higher box-office sales, since it costs less to take a family to view a drive-in movie versus going to the traditional movie theatre. Similarly, food sales would be higher during childrenÐŽ¦s movies for various concessions such as popcorn, candy, and pop. Also, the criticsÐŽ¦ review of a new film would most likely affect movie-goers ÐŽVif the movie was rated well then demand would presumably be higher.

The size of the surrounding population as well as the conditions impacting population growth and trends would be additional characteristics. The larger the population and the larger the growth of that population, the more likely that there will be an increase in business volume as more families and couples enter the market. Also, the population demographics such as the average age, family make-up of persons in the area, car ownership and income status would affect business activity. As stated previously, couples (with or without children) would be good candidates for drive-in theatre sales.

Finally, the proximity of competitive theatres may affect the demand for drive-in movies. The modes of transportation available to indoor competitive theatres may also be important. For instance, if major bus routes, highway access, and automobile parking are available, drive-in attendance may be affected. In addition, indirect competition from cable and satellite providers who provide movies-on-demand may affect the attendance rate at drive-ins, especially if the surrounding population has easy access to these services.

IN ANALYZING THE DATA PROVIDED, WHAT ARE THE DOMINANT CHARACTERISTICS?

When observing sales of food and box office over the entire range of dates (from 2002 to 2004), it appears that the trend for box-office sales is slightly positive (positive slope of 2.79), which indicates growth in sales. Some possible reasons for this increase could be a growth in population, increases in incomes or even cultural changes. The trend for food sales, however, has been relatively stable over the years (it has been slightly negative with a slope of -0.16), which indicates that sales of food and refreshments have barely changed even though ticket sales have increased.

Over the yearly operating months (April/May to September), there is a decreasing trend in food and box-office sales as well as in the number of kid tickets sold in all years -the average sales of food and box-office tickets as well as the number of kid tickets sold are highest during the month of May, followed by the month of June and July. Furthermore, there seems to be daily seasonal variation. It appears that average sales of food and box-office tickets as well as the number of kid tickets sold are highest on Saturday (Day 6), followed by Friday (Day 5) and Sunday (Day 7). The averages are lowest on Monday (Day 1), followed by Tuesday (Day 2). Wednesday and Thursday seem to be relatively close in sales. In comparison, Saturday night sales are approximately four times that of Monday nights.

Some other points to consider include:

„X the last week of May and the first two weeks of June appear to have the highest box-office sales