Now, in reality there are second-hand effects, of course - like people getting adjusted to the below-cost ticket prices and being even less incentivized to buy at the normal price.
Now, in reality there are second-hand effects, of course - like people getting adjusted to the below-cost ticket prices and being even less incentivized to buy at the normal price.
If it is free to show the movie then there is no penalty to running extra sessions. If it isn't free, someone is being paid. If that is a different someone to where ticket money goes they care more about sessions than viewings.
If you lower the price too much, you get a different sort of clientele. The sort of person who wrecks the place and annoys all the other patrons nearby.
Then the cleanup costs a lot. Often more than the amount of revenue collected on the room.
It absolutely makes more sense to keep the hotel room empty than to lower the price to keep it fully occupied.