What Shows Benefit from Broadway’s “Holiday Premium”?
This blog was originally published on my LinkedIn.
As we officially enter into the holiday season, Broadway box office grosses typically soar as tourists flock to the city and locals make time to catch up on shows they might have missed. Lately, I've noticed many producers promoting the holiday season as an ideal time to launch their shows. They argue that opening a production during this period almost guarantees a boost from the holiday box-office spike. And, while it's true that grosses usually increase by ~34% for plays and ~22% for musicals, I wanted to dive into the question: do all shows equally benefit from holiday surge? Intrigued by this, I decided to quantify the holiday premium—the difference between inflation-adjusted average ticket prices during the holiday season versus other times of the year.
The average weekly gross increases by ~34% for plays and ~22% for musicals during the holiday season, but which shows benefit most from the holiday surge?
Unpacking Holiday Occupancy Trends
First, I delved into occupancy rates to gauge the holiday season's impact on Broadway's economy. While occupancy does spike during the peak weeks of Thanksgiving, Christmas, and New Year's, a closer look reveals that this increase isn't as pronounced across the entire holiday season. In fact, when comparing the holiday period to the non-holiday months, average occupancy levels remain surprisingly stable. This observation highlights that the significant rise in total gross revenue may not be due entirely to higher audience numbers but more from increased ticket prices.
While total weekly gross fluctuates significantly during the holiday season, occupancy remains more stable, especially relative to the non-holiday season.
Musicals vs. Plays: Expected Trends in Holiday Premiums
The analysis of holiday premiums on Broadway indicates a predictable trend: musicals tend to enjoy a larger boost in ticket sales than plays, with musicals securing an average premium of $11.42 compared to $7.78 for plays. This disparity is not particularly surprising, given that musicals generally perform better during tourist-heavy periods.
Musicals typically enjoy a larger holiday premium than plays, averaging $11.42 compared to plays at $7.78,
While musicals receiving a bigger holiday boost aligns with general expectations due to their broader appeal during peak tourist times, this factor alone does not fully explain the dynamics of seasonal success on Broadway.
Worth noting, as well -- original musicals and plays command higher holiday premiums than revivals, with musicals earning $12.43 versus $7.62 and plays $9.38 versus $3.96. However, most of these 'original musicals' are often the long-running musicals, which leads us directly to the core focus of our analysis: the distinct advantage that long-running shows have during the holiday season.
The Real Beneficiaries: Long-Running Musicals
As I delved deeper into the data, my attention turned to some of the well-known heavy-hitters. I decided to explore the significant impact of "long-running" shows on total holiday grosses. (To clarify, a "long-running" show is defined as one that has been entertaining audiences for more than a year; initially categorized as "new," a show achieves "long-running" status upon reaching its first anniversary.)
In doing this, I realized that long-running shows, particularly musicals, are the unsung heroes of the holiday season. They dominate this time period, enjoying a significant premium of nearly $6 more in average ticket prices compared to their newer, musical counterparts—$13.70 versus $8.52.
Long-running musicals dominate the holiday season by enjoying a significant premium over their newer counterparts.
Even more revealing is the audience stability these shows maintain. While new productions experience a drop in capacity by about 1.1% during the holiday rush, long-runners barely blink with a mere 0.2% change.
Wrapping It Up (A Bad Pun...)
The analysis of holiday premiums indicates that while all shows experience some uplift during the festive season, it is predominantly the long-running productions that contribute to substantial increases in grosses. This distinction emphasizes the importance of understanding that benefits from the holiday rush are not uniformly distributed, highlighting the critical need for producers and investors to employ strategic, analytics-driven decision-making to optimize financial results.
