Sie fahren ins Theater.
Two issues:
FahrenFahren: to driveto drive, but also to goto go
InsIns - in dasin das - means that the destination is inside the theatre. AkkusativAccusative is directional - going there.
The combination of fahrenfahren and inin is a bit confusing, but completely understandable.
Sie fahren in dem Theater. This one uses Dativ -stationary. They are driving in the theatre.
This one uses dative - stationary. They are driving in the theatre.
sieSie fahren zum Theater. In this case, they are driving/going to the theatre, but do not necessarily go in. The destination is not inside. Many time, it is the implied destination, but the sentence could go on with: Dann steigen sie um und fahren ueber die Bruecke. Or: Dann biegen sie rechts ab und kommen zur Autobahnauffahrt.
In this case, they are driving/going to the theatre, but do not necessarily go in. The destination is not inside. Many time, it is the implied destination, but the sentence could go on with: Dann steigen sie um und fahren über die Brücke. Or: Dann biegen sie rechts ab und kommen zur Autobahnauffahrt.
The use is the same with Kino, HotelKino, Hotel etc.