Last updated on September 8th, 2021 at 12:12 pm
Marcus Corp. chief executive officer Greg Marcus says the only way out of the COVID-19 pandemic is for companies and organizations to support vaccine requirements for employees or for those attending public gatherings, he said during the Milwaukee Press Club’s Newsmaker Luncheon Wednesday.
“While we must continue to address the questions and concerns of the unvaccinated, I’m convinced the most progress will come through vaccine requirements,” Marcus said. “Whether those requirements are to work or to gain access to things like Summerfest or other things people want to do. I applaud the hospital systems for what they’ve done along with other key employers. That is what is going to get us to the other side of this.”
Summerfest recently began requiring proof of vaccination to enter its grounds or proof of a negative COVID-19 test within 72 hours of entry while some employers, including Northwestern Mutual, have implemented their own vaccine requirement for employees.
Marcus Corp. has taken several steps to ensure the safety of its hotel, theater and restaurant guests throughout the pandemic including extended and temporary closures, social distancing and mask-wearing. However, the company has not rolled out an organization-wide vaccine requirement, Marcus said, adding that any new protocol would be industry-specific.
“On the property side, we haven’t yet made that decision,” Marcus said of vaccine requirements. “We’re following what the industries are doing. For example, we have a property in New York and New York is starting to require it. So, where there’s a requirement, we’ll do that.”
Marcus Corp. endured its most financially challenging year in its history when the hotel, movie theater and restaurant chain operator reported total revenues of $237.7 million in 2020, down about 71% from fiscal 2019 when the company recorded earnings of $820.9 million. In fact, the company was losing about $10 million per month around this time a year ago, Marcus said.
But over the summer, downtown Milwaukee hotel business returned to 2019 levels, Marcus said, although he doesn’t expect the trend to continue in the fall and winter months as business travel wanes.
“The hotels are actually cashflow positive for the whole quarter with a number of properties reporting positive operating income,” Marcus said. “So, hotels have really seen an early positive swing but theaters (have) as well.”
Overall, hotel revenue was down 42% in the second quarter while occupancy was 51% compared to 77.9% in 2019, according to a Securities and Exchange Commission filing.
The company says its hotel business benefitted from the Milwaukee Bucks’ playoff run to the NBA championship while the return of weddings and large-scale events such as the Ryder Cup later this month have contributed to increased bookings.
As for its movie theater business, Marcus Corp. began fiscal 2021 with just 52% of its theaters open, a number that has grown to about 95% as of July 1 with the majority operating seven days a week and with normal operating hours.
For the first half of the year, total revenues from theaters were about $75 million compared to $111 million for the first half of 2020, according to an SEC filing. However, much of its theater revenues in 2020 came during the first quarter before the pandemic’s impact on consumers took full effect.
Although Marcus Corp. has seen improved performance during its second quarter, it may take until 2024 for a “full recovery,” Marcus said.