Business Econs - Marina Bay Sands

BEC1007 BUSINESS ECONOMICS PROJECT

COMPANY NAME: MARINA BAY SANDS SINGAPORE HOTEL

TUTORIAL GROUP: TB17

Name Admin Number

1 Eunice Tan Shu Yi 1902061I

2 Nurhidayah Binte Suhaimi 1902099I

3 Siti Hajar Putri Binte Muhammad Hatta 1905380J

4 Uzzi Binte Abdul Rahim 1902221I

5 Zoe Tay Hui Min 1901161H

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CONTENT PAGE

S/N Page

1 Introduction

Background Information

Target Consumer 1

2 Factors Affecting Demand

Taste and Preference

Income

Prices of Related Goods (Substitutes) 2

3 Factors Affecting Supply

Prices of Productive Resources

Technology and Productivity 4

4 Elasticity 5

5 Reference 7

6 Annexes 8

1 INTRODUCTION

Background information

Marina Bay Sands is operated by Las Vegas Sands Corporation and opens on 23 June 2010 as an Integrated Resort (IR) which offers hotels, casino, retail mall, entertainment venues and convention facilities within a gross floor plans of 570,000 square meters.

Marina Bay Sands Hotel houses more than 2,600 hotel rooms within 3 towers and features three towers that were popularised by an astonishing sky park and the famous infinity pool. The hotel is also known for its personalised services rendered to its customers.

Target Consumer

Primary Consumer

Marina Bay Sands hotel’s primary target audience is tourists who would want to experience Singapore in luxury.

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With Singapore high tourist arrival of 17,424,611 in 2017, 55% of the tourist arrivals stay in a hotel which makes tourist Marina Bay Sands’ primary target. (refer to Annex 1)

2 FACTORS AFFECTING DEMAND

Taste and Preference

Services and packages offer

Marina Bay Sands Hotels provided services such as booking a room together with flight, in-room dining, housekeeping, surprise floral arrangements. In addition to the services provided, the hotel also offers various packages.

Currently, they are having one of their most popular offers, the “Splash into Summer”, where customers can save up to $40 per night, enjoy 1-for-1 cocktails at their rooftop bar, half-priced wine bottles and more. Guests will also be given bonus privileges where they can get complimentary vouchers worth more than $150, such as vouchers to the Skypark Observation Deck, Sampan Ride and more.

Facilities

36423601303020Picture SEQ Picture * ARABIC 1 Taken from:

00Picture SEQ Picture * ARABIC 1 Taken from:

right4795100Hotel guests who are staying at the hotel and are invited to attend a Meetings, Incentives, Conferencing and Exhibitions (MICE) events with clients and companies are able to use the nearby convention facilities that are offered and conveniently located at Marina Bay Sands Expo and Convention Centre.

69852153920Picture SEQ Picture * ARABIC 2 Taken from

Picture SEQ Picture * ARABIC 2 Taken from

69853409950Expectation of future price

left1768838Figure SEQ Figure * ARABIC 1 Taken from

Figure SEQ Figure * ARABIC 1 Taken from

With major yearly events such as F1 and Singapore National Day that are usually held during a specific time frame, both the tourists and guests will be expecting the price of hotel rooms will be higher when nearing the date of the event (future price). The customers will book months in advance when the price is still affordable, therefore this can increase the demand for hotel rooms from this hotel.

Income

Inferior Products

Customers with a lower income will prefer cheaper alternatives such as V Hotel as compared to Marina Bay Sands Hotel. A standard hotel room at V Hotel costs $97.00 whereas a standard hotel room at the Marina Bay Sands Hotel costs $359.00.

Prices of related goods (Substitute)

Airbnb

Airbnb is an accommodation sharing site where users such as tourists and backpackers can rent someone’s home to stay for a few days or for the desired period. By staying in an Airbnb, users are able to have accommodation for the desired period at a cheaper price than a standard hotel room. Users will also be able to experience a local’s life and Airbnb is suitable for those travelling in a large group.

Figure 1 Demand Curve

FACTORS AFFECTING SUPPLY

Prices of Productive Resources

Green Building

Marina Bay Sands was designed in such a way that it requires an abundance of sunlight to brighten up the indoor areas which reduce the need for additional lighting which helps to lower the cost as a whole and elevators that are equipped with a regenerative drive which is energy efficient. And, is also equipped with cutting-edge technologies that help to reduce energy consumption.

Technology and Productivity

In-House Forecasting Solution

Marina Bay Sands’ In-House Forecasting Solution is a combination of its fleet of cars and rental cars for the limousines provided for its guest. The system accurately schedules its drivers and renting cars when required. Also, a module was developed to inform near real-time on when to substitute for rental vehicles.

Figure SEQ Figure * ARABIC 2 Supply Curve

ELASTICITY

The factors that are affecting the elasticity of Marina Bay Sands Hotel is the proportion of income spent on the hotel price.

30562554381500Picture SEQ Picture * ARABIC 3 Airbnb Apartment price

Taken from: Airbnb booking Site

Picture SEQ Picture * ARABIC 3 Airbnb Apartment price

Taken from: Airbnb booking Site

2286004347210Picture SEQ Picture * ARABIC 4 Marina Bay Sands Hotel Room price

Taken from: Marina Bay Sands booking site

Picture SEQ Picture * ARABIC 4 Marina Bay Sands Hotel Room price

Taken from: Marina Bay Sands booking site

2667001073150003056544107299200The price of a room may cost $646.17 per night at Marina Bay Sands Hotel as compared to $198.00 per night at an apartment booked on Airbnb. The prices were checked with the same date (28 October 2019 to 29 October 2019) indicated on each booking site.

29489403581400Picture SEQ Picture * ARABIC 5 Amenities provided by Airbnb

Taken from: Airbnb’s booking site

0Picture SEQ Picture * ARABIC 5 Amenities provided by Airbnb

Taken from: Airbnb’s booking site

228603566160Picture SEQ Picture * ARABIC 6 Amenities provided by Marina Bay Sands Hotel

Taken from: Marina Bay Sands’ booking site

0Picture SEQ Picture * ARABIC 6 Amenities provided by Marina Bay Sands Hotel

Taken from: Marina Bay Sands’ booking site

right145003200Both Marina Bay Sands hotel and Airbnb apartment provide similar amenities such as Television, irons, pools and gym. Airbnb is an apartment that comes with 2 bedrooms, 3 beds, 1 shower, study area and a kitchen whereas Marina Bay Sands hotel is a room that comes with 1 bed, 1 shower and study area. The hotel is able to accommodate 2 guests whereas the Airbnb can accommodate 4 guests.

left256640Both Marina Bay Sands hotel and Airbnb apartment are located within Marina Bay and are nearby Singapore’s places of attractions such as Garden By The Bay, Singapore Flyers and Merlion Park.

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Picture SEQ Picture * ARABIC 7 Hotel and Apartment located within the same area

This shows that Marina Bay Sands hotel is elastic as compared to Airbnb apartment which is inelastic due to a higher amount of money is spent on Marina Bay Sands hotel despite located within the same area and having similar amenities A higher proportion of income is spent on Marina Bay Sands Hotel as compared to Airbnb apartment.

Price Discrimination

29413205469255Picture 9 Marina Bay Sands Hotel Room price

Taken from: Marina Bay Sands booking site

Picture 9 Marina Bay Sands Hotel Room price

Taken from: Marina Bay Sands booking site

300228013423900-609605459095Picture SEQ Picture * ARABIC 8 Marina Bay Sands Hotel Room price

Taken from: Marina Bay Sands booking site

Picture SEQ Picture * ARABIC 8 Marina Bay Sands Hotel Room price

Taken from: Marina Bay Sands booking site

-609601356995Price Discrimination is a strategy which a company charges a different price for an identical product to maximise profits. Marina Bay Sands hotel display this strategy by charging higher when a user booked a room closer to the date of booking. The strategy can be seen in the comparison made below despite booking both rooms one month apart on the same date (17 June 2019).

5 REFERENCES

Chua, & Alvin. (2011, November 01). Marina Bay Sands. Retrieved from Marina Bay Sands. (n.d.). Retrieved from Celebrations Package at Marina Bay Sands. (n.d.). Retrieved from into Summer – Hotel Offer at Marina Bay Sands. (n.d.). Retrieved from Offer You Can’t Refuse – Marina Bay Sands Singapore. (n.d.). Retrieved from Pool | Marina Bay Sands | Swimming Pools in Singapore. (n.d.). Retrieved from Hotel Lavender (n.d.). Retrieved from Your Stay (n.d.). Retrieved from Nelson, Sarah, & Pessemier, C. (2019, April 23). What Airbnb Is and Why It’s Better Than Hotels. Retrieved from of Marina Bay Sands Hotel (Singapore). (2019, January 16). Retrieved from

6ANNEXES

right450850Annex 1 – Percentage of tourists that stays in a hotel

Analytics & Insights Department, Digital Transformation Division, Singapore Tourism Board (July 2018). 2017 Annual Report on Tourism Statistics Retrieved from