This San Diego luxury movie theater survived the pandemic. Now what?
Since recently reopening his Liberty Station and La Jolla locations, The Lot CEO Adolfo Fastlicht says he hopes he’ll have enough employees by mid-June when cinemas will be allowed to be open at 100 percent capacity
Will Memorial Day weekend bring streaming-weary San Diegans to the movies? Adolfo Fastlicht, CEO of luxury cinema company The Lot, hopes so.
Though movie theaters in San Diego County received the green light to resume operations in March, Fastlicht decided to hold off for a few months. The Lot, which has four California locations, officially reopened its La Jolla and Liberty Station venues on May 6 and 21, respectively. This is the second reopening for the San Diego-based company since the pandemic hit more than a year ago.
The high-end theater and dining complex is just one of many businesses across the county that were crushed by COVID-19. In 2019, The Lot’s four venues sold more than a million tickets. Between movie and dining offerings, the La Jolla and Liberty Station locations generated approximately $20 million in sales alone. Last year, sales were one-tenth that, reaching just under $2 million, Fastlicht said.
Though both venues are now open for screenings and dining, The Lot faces a new dilemma: a shortage of employees. Fastlicht said that for a variety of reasons — previous staff members moving away, starting other jobs, or staying on unemployment — the company has not been able to approach the staffing numbers it had in 2019.
Currently, The Lot has approximately 80 employees between both San Diego locations. To return to pre-pandemic operations — including longer hours, more showtimes and a full menu — The Lot would need at least 150 staff members. With movie theaters now permitted to operate at 50 percent capacity, Fastlicht says he still needs more workers to return to a fuller operation now and still more once California fully reopens June 15 when capacity restrictions will be lifted.
Toward that end, Fastlicht has launched an aggressive hiring strategy, offering signing bonuses as high as $1,000 as long as an employee commits to at least 90 days of work. He is holding job fairs and will pay $250 referral bonuses to those who can find him front-of-the-house workers.
Until The Lot is able to ramp up with new hires, the venues will continue with reduced showtimes and a limited menu. Both theaters are closed Mondays and Tuesdays and have limited their hours of operation. Its stalled plans for a restaurant revamp — originally scheduled to launch summer 2020 — will remain on hold. Fastlicht remains hopeful that he will have the staffing he needs come June 15.
“We’re casting a wide net to recruit and hire staff,” he said. “It’s certainly our objective to be open at 100 percent, and we’re confident we can get there but it’s not a slam dunk.”
Even with the limited menu it is currently offering, The Lot still has plenty of offerings to satisfy diverse palates, from Impossible burgers and truffle fries to sausage and barbecue chicken flatbreads. Fastlicht says he isn’t ready to reveal his still-to-come new menu but describes it as coastal grill-inspired, with influences drawn from Baja California cuisine. Miso-glazed sea bass and Japanese rib-eye tacos are among the menu items he says will be on the new menu.
The Lot is following all state and county health guidelines for COVID-19, such as mask requirements and cleaning protocols. Patrons are encouraged to buy tickets online or through The Lot’s mobile app. The app allows customers to buy food and beverages during movie screenings. Come June 15, the mask requirement may no longer be enforced, although that will depend on guidance from health officials, Fastlicht said.
The Lot, which at one time employed approximately 250 individuals in San Diego, was forced to lay off the majority of its staff during its first closure in March 2020. To stay afloat, the company relied on government aid. It received a Paycheck Protection Program (PPP) loan in April 2020, and a second PPP loan at the beginning of 2021. It also relied on support from its investors, vendors and landlords. Fastlicht said he is still waiting to hear back on his April 2021 application for the Shuttered Venue Operators Grant, administered through the Small Business Administration.
Although indoor theaters were not cleared to reopen until last September, The Lot —described by Fastlicht as “an experience business” rather than a traditional cinema — was able to generate revenue from its full-service restaurants until then. For a period of time, it also hosted an outdoor cinema program called “Movies Under the Stars” that screened old classics and family films in its parking structure. Additionally, it invited customers to rent out theater space for small private parties; visitors logged in to their streaming service accounts and viewed that content on the big screen.
When The Lot was able to open its indoor movie theaters to the general public at 25 percent capacity in the early fall, it was short-lived. By November, the venues were forced to shutter yet again.
“That was like a dagger to the heart,” Fastlicht said.
Asked about his projections for this year, Fastlicht said it would be “foolish to say a number” but hopes to get to 50 or 75 percent of the business the company had in 2019. Based on what he says is a strong movie lineup, as well as feedback from eager customers, he remains optimistic about The Lot’s future. Regardless of how the remainder of the year pans out, he predicts that 2022 will be a “more normal year” for the business, projecting sales closer to pre-pandemic numbers.
Fastlicht said his luxury cinema’s all-inclusive, experience-first approach — versus a traditional movie theater setting — puts The Lot in a good position for a strong comeback. He also thinks there’s something unique about movie theaters that can’t be replicated at home, likely resulting in a surge of demand from San Diegans, especially after more than a year stuck inside.
“There’s a symbiotic relationship (between theaters and studios) — at the end, people want to go out,” he said. “People want to experience an immersive, communal experience that only cinema can afford.”
While Fastlicht said he thinks “cinema will be here for many years to come,” he acknowledges that the rising popularity of streaming poses a threat to the industry. While studios are now distributing movies back to theaters, some are also releasing these films on their premium streaming services, waiving the 90-day exclusive window previously granted to the venues.
Case in point: This Memorial Day weekend, which Fastlicht syas is historically a busy time for movie theaters, two major films will hit the big screen: Disney’s “Cruella” and “A Quiet Place Part II” from Paramount Pictures. However, “Cruella” will be available for customers to watch from home on Disney+ the same day as its theater release.
“It would be naive to say it wouldn’t affect us at all,” Fastlicht said.
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