While box office returns in 2020 will suffer an estimated 80% global drop due to COVID-19, the Kingdom of Saudi Arabia is bucking this downward trend, having grown since 2019 to become the Middle East’s top grossing territory this year to date.

Fresh figures released during the recent META Cinema Forum exhibitors’ conference reveal that Saudi Arabia this year has overtaken the United Arab Emirates and is currently the region’s top-grossing territory, with more than $73 million in theatrical movie ticket sales over the past 40 weeks — a roughly $2 million increase in box office returns compared with the same period in 2019.

The UAE during the same 2020 period has generated roughly $51 million, roughly a quarter of its 2019 box office draw.

“We believe that Saudi Arabia is the only cinema market globally to have expanded in 2020,” says Cameron Mitchell, CEO of prominent Middle East exhibitor VOX Cinemas, which is leading the way in Saudi. He sees the Saudi market as having increased by roughly 4% year to date — despite the fact that, due to the pandemic, cinemas where shuttered there between March and the middle of June — and is forecasting an 8% growth by year’s end.

Mitchell notes that as a theatrical market, the Middle East in 2019 was worth $600 million, of which Saudi accounted for a $110 million share and the UAE roughly $250 million. This excludes releases of Indian and Arabic films and some indie content.

“This year our numbers are telling us that the UAE is going to be worth about $60 million, and Saudi is going to be worth $120 million,” Mitchell says.

In bigger picture terms Mitchell thinks that Hollywood will value the Middle East at about $220 million in 2020 and that “Saudi’s contribution is going to be half of that this year,” he says.

David Hancock, an analyst at London-based Omdia, points out that Saudi Arabia was “nothing until two years ago” when removal of a 35-year-old ban on movie theaters prompted a mad dash by exhibitors such as VOX to open shop. In May 2018, the company opened the first Saudi cinema in Riyadh, the Saudi capital.

“The fact that Saudi has now overtaken the UAE, albeit in a weird year, is suddenly a milestone for the Saudi Arabian cinema market,” he says. Hancock expects the country will be a billion dollar market “in 3 to 5 years,” depending on recovery from COVID-19 which he estimates this year will cause an 80% global box office drop, with losses totalling up to $30 billion.

Hancock also says Saudi is on track to become the dominant market in the region “and one of the top 10 or 15 markets in the world.”

An interesting aspect of Saudi Arabia’s current box office upswing is that grosses in the country are currently generated from a mere 260 screens — less than half the 614 screens operating in the UAE.

Average occupancy levels in cinemas across the Middle East have not gone beyond 20%, and Saudi is no exception. But in terms of generating box office, Saudi has the cushy advantage that the average ticket price there is $17.60, the highest in the region. In the UAE, that figure is $12.80, and in Kuwait, which is the region’s third market, it’s $11.90.

Also, VOX has obtained permission to keep its venues in Riyadh, Jeddah and Dammam open 24 hours a day.

Since cinemas re-opened in June, the two biggest releases across the Middle East have been “Tenet” and “Mulan,” which Disney has released theatrically in the Middle East where its Disney Plus platform has not yet launched. Russel Crowe-starrer “Unhinged” also performed handsomely in the region, though figures were not readily available.

Meanwhile, screen growth in Saudi is going forward undeterred, with Vox projecting there will be 340 screens in operation in the country by year’s end, and close to 700 by the end of 2021.

Besides VOX, the other exhibitors operating in Saudi include Cinepolis, Empire Cinemas and AMC which has five Saudi venues in operation and is expected to open three more in coming months.

Having a market like Saudi can help Hollywood studios offset some of their losses, says Mitchell, who is worried that due to COVID-19, the supply chain is drying up.

To overcome the challenge posed by the lack of new content, VOX is stepping up its offer of alternative content such as live soccer matches, opera and concerts, and also classic re-releases.

They’ve also teamed up with local players Image Nation and MBC Group to produce a slate of Arabic films, at least three of which they plan to release in 2021 as part of a plan to release up to 10 Arabic self-produced titles annually.

Where the Middle East differs from other regions is that “people here go to the cinema, not to a specific movie,” Mitchell notes.

“People will walk into a venue with, say, 24 screens and say: ‘I’ll go see that!’ And if you don’t have enough product to fill those screens, then there is a risk that they will lose that habit,” he says.