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                                                                    Exhibit 99.1




                  [CINEMASTAR LUXURY THEATERS, INC. Stationary]


                                                                  _____ __, 1996




Dear Redeemable Warrantholder:

                  As part of a plan to raise additional capital, CinemaStar
Luxury Theaters, Inc. (the "Company") has temporarily reduced the price at which
each of its outstanding Redeemable Warrants (the "Warrants") may be exercised
and to also offer Class B Redeemable Warrants upon exercise along with the
Common Stock already provided for. From the date hereof until ________, 1996,
unless the offer (the "Offer") is extended, the exercise price of each of the
outstanding Redeemable Warrants has been reduced to $____ per Warrant, and upon
the tender and exercise of each Redeemable Warrant, the holder will receive one
share of Common Stock and one Class B Warrant. The Offer is not conditioned upon
the tender and exercise of a minimum number of Redeemable Warrants. Upon the
conclusion of the Offer, the exercise price of each Redeemable Warrant will
revert to $6.00 until February 6, 2000, the expiration date of the Redeemable
Warrants, with each Warrant exercisable for only one share of Common Stock and
no Class B Redeemable Warrants.

                  I urge you to consider carefully this opportunity to exercise
your Redeemable Warrants pursuant to the Offer. The Offer affords Redeemable
Warrantholders the opportunity to make an equity investment in the Company on
terms more attractive than those otherwise available.

                  The accompanying Prospectus provides important information
about the Company and the detailed terms of the Offer. Please read and consider
it carefully. Any Redeemable Warrantholders electing to exercise Redeemable
Warrants pursuant to the Offer should either (i) fill out the subscription form
on the back of the Redeemable Warrant certificate and forward it along with
cash, a certified or official bank check made payable to "Continental Stock
Transfer & Trust Company, Agent for CinemaStar Luxury Theaters, Inc." or a wire
transfer for the benefit of the Company in the amount of the aggregate exercise
price and any other required documents to Continental Stock Transfer & Trust
Company, or (ii) request a broker or bank to
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effect the transaction, all as more fully described in the accompanying
Prospectus.

                  Redeemable Warrantholders not exercising their Redeemable
Warrants may realize a portion of the economic benefit to them of the Offer by
selling their Redeemable Warrants in the market. You are urged to obtain current
market quotations for the Redeemable Warrants and Common Stock or contact your
broker.

                  Questions and requests for assistance or for additional copies
of the Prospectus should be directed to The Boston Group, L.P., the Company's
soliciting agent, at ______________.

                  Again, I urge you to give your careful consideration to the
Offer described in the accompanying Prospectus.

                                               Sincerely yours,

                                               John Ellison, Jr.
                                               President




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