1. MARINA BAY SANDS:
PRICING STRATEGIES
MARKETING 313
Prepared by: Charles Hanley Flinn V| Lin Daohui | Simon Raun Madsen | Zhang Qian Wen

2. 1
CONTENT PAGE
Executive Summary .............................................................................................................................................................. 2
Introduction.............................................................................................................................................................................. 3
Analysis Of Pricing Strategies And Tactics ................................................................................................................ 4
CASINO.................................................................................................................................................................................. 4
Psychological Effects ................................................................................................................................................. 4
MEMBERSHIP.................................................................................................................................................................... 5
Membership Strategy................................................................................................................................................ 5
Comparison with RWS ................................................................................................................................................... 6
MEETING, INCENTIVES, CONFERENCING & EXHIBITION (MICE) ...................................................... 7
1st Degree Price Discrimination ........................................................................................................................... 7
Add-ons............................................................................................................................................................................ 7
Comparison with RWS ................................................................................................................................................... 7
Bundling........................................................................................................................................................................... 8
HOTEL ................................................................................................................................................................................... 9
Versioning....................................................................................................................................................................... 9
Yield Management...................................................................................................................................................... 9
Lowest Price Guarantee.........................................................................................................................................11
Price Promotions.......................................................................................................................................................11
Segmentation By Occassion .................................................................................................................................13
Comparison with RWS............................................................................................................................................13
Recommendations...............................................................................................................................................................14
Facilities Membership..................................................................................................................................................14
“All-You-Can-Stay” Membership.............................................................................................................................14
Partner with Tourist Attractions ............................................................................................................................14
Difficult Comparison Effect for RFP.......................................................................................................................15
Order Bias...........................................................................................................................................................................15
REFERENCE............................................................................................................................................................................16
APPENDIX...............................................................................................................................................................................16
Appendix 1 – Resorts World Sentosa Loyalty Programme ........................................................................16
Appendix 2 - Types of rooms in Marina Bay Sands........................................................................................17
Appendix 3 – Price Of RWS Festive Hotel Deluxe Room Observed Over 70 Days...........................19
Appendix 4 – Dynamic Nestling Observation In Room Bookings (MBS Deluxe Room) ...............20
Appendix 5- Room versioning in Resorts World Sentosa...........................................................................21

3. 2
EXECUTIVE SUMMARY
This paper aims to analyse the various pricing strategies and psychological influences that
Marina Bay Sands (MBS) uses in pricing its various products, and also recommend some ways of
achieving the pricing goal. The goal of MBS pricing strategies is to maximize utilization of their
capacity while also capturing as much customer value as possible due to the high fixed cost
structure and perishable nature of the experience they are selling. These strategies will also be
critically compared with those Resorts World Sentosa’s (RWS), which is MBS’ only competitor in
Singapore.
The pricing analysis will be focused on the main revenue drivers – Casino, M.I.C.E. and Hotel.
There is no clear pricing strategy for MBS casino but they use psychological influences of
prospect theory and mental accounting to increase revenues. Both MBS and RWS also tie in
their membership program with their casinos to increase switching costs and create a stronger
lock in effect.
In M.I.C.E, both MBS and RWS use Request for Proposal and add-ons for its pricing strategies –
they customize each proposals according to events’ requirements and sales managers work
within a price range for venue rentals. Both venues have similar venue rental pricing. However,
MBS earns higher margins through their add-ons like renting audio visual equipment while
RWS earns more through their quoted prices in the proposal.
In the hotel sector, MBS uses versioning, price discounts, and yield management in its pricing
strategies. To primarily segment its market, MBS leverage on festivities and occasions to frame
its hotel rooms to become more attractive and increase potential guest’s propensity to purchase
the room packages. RWS, on the other hand, leverage on its 8 different themed hotels to appeal
to different guests with different utility functions.
We recommend that MBS use subscription models for their facilities and less occupied rooms to
further increase utilization of these fixed cost facilities. These programs would essentially
provide free revenue for them because of their cost structure. The facilities membership would
be priced like a typical fixed quantity transferable golf country club membership. The hotel
room membership would include limitations such as blackout periods and extra surcharges for
peak periods so that MBS does not lose on potential revenue from non-members. We also
recommend that MBS bundle their rooms together with tourist attractions to increase perceived
customer value. MBS could also make use of the order bias and difficult to decrease the price
sensitivity of their consumer and business customers respectively.

4. 3
INTRODUCTION
Marina Bay Sands (MBS) is one of the two Integrated Resorts (IRs) built in Singapore. It offers a
wide range of products, ranging from hotel, retail, M.I.C.E, casino and attractions. In this report,
we will explore a few of the pricing strategies MBS has used over the past two years in its
different segments. We will be analysing MBS’ pricing strategies against Resorts World Sentosa
(RWS) as it is MBS’ only competitor in Singapore.
In the following section, we will analyse on three important revenue generating segments in
MBS – Casino, M.I.C.E and Hotel. MBS and RWS offer similar products which offer somewhat
similar value albeit a different kind of experience. However, RWS has a slightly lower perceived
price as it is targeted at families, who could be more price sensitive.
FIGURE 1: PRICE-BENEFITS MAP

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ANALYSIS OF PRICING STRATEGIES AND TACTICS
CASINO
There is no clear pricing strategy for the casinos. The levy for entry into the casino is not part of
the pricing strategy due to the fact that it is mandated by the government.
PSYCHOLOGICAL EFFECTS
Prospect Theory – Framing & Diminishing Sensitivity
FIGURE 2: PROSPECT THEORY
Prospect theory works in that framing a transaction as a loss makes people take more risk than
framing it as a gain. When gamblers put money on the table to gamble, it would most likely be
perceived as a loss and people will take more risk. Following this logic, the more they lose the
more risk they take and so on. As the losses increase, the gambler gets desensitized to the pain
of losing money, and hence this propels them to gamble more (Figure 2).
This benefits the Casino in the long-run because the “house” typically has an advantage from 1%
up to as high as 30% depending on the game being played (UNLV, 2012).
Mental Accounting
The casino also uses chips to their advantage, which resembles fake money. This replaces the
pain of losing real money and causes gamblers to be less sensitive as to how much they are
spending. In addition, the concept of mental accounting states that customers who win money
while gambling feel like they are winning “free money”, and could be looser with the winnings,
potentially spending it at the resort again, or perhaps at the retail space

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MEMBERSHIP
MBS ties their membership program into their casino, creating switching cost to retain
customer loyalty (Figure 3).
FIGURE 3: MBS REWARDS PROGRAM
MEMBERSHIP STRATEGY
MBS offers 4 tiers of Sands Rewards Club memberships including Premier, Gold Platinum, and
Diamond. Each level includes benefits geared towards attracting and rewarding more frequent
and high spending customers. Figure 4 shows how MBS structures their membership cards: the
more the customer spends, the higher the customer moves up, and they get rewarded with
significantly more benefits.

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FIGURE 4: MBS SANDS DOLLARS EARNING CHART
Switching Cost
The Sands Rewards Club creates switching cost and lock-in effect, retaining customer loyalty.
The cost of earning the same reward level at RWS may be perceived as higher than benefits
because they would have to re-spend the same amount of money just to get similar benefits.
Shared cost effect
Another strategy this membership program incorporates is the shared cost effect. As customers
spend more money, they earn more points. This gives customers the perception that the points
they are spending are not their own money which would make them less price sensitive, and
spend more.
COMPARISON WITH RWS
RWS also offers a similar program to the Sands Reward Club called the Genting Rewards
(Appendix 1) program. This program is structured similarly to the Sands Reward Club.
One different program that RWS has introduced is the RWS Invitees program, which follows a
subscription model. Upon paying the $150 per year membership one is entitled to one of six
exclusive events and invitations to VIP events throughout the year
This is a form of price discrimination because the people who want these perks would have to
pay for it, and the segmentation hedge is strong because they would have to show their
membership cards to get these perks.
As with any loyalty program, an important benefit to the Integrated Resorts (IRs) is that it gets
information on the customers and can better serve their needs through customer relationship
management, and targeted marketing. This helps to increase customer value and could
potentially increase the amount of value extracted by the IR.

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MEETING, INCENTIVES, CONFERENCING & EXHIBITION (MICE)
FIGURE 5: MBS AND RWS M.I.C.E VENUES
1ST DEGREE PRICE DISCRIMINATION
MBS and RWS utilize Request for Proposal (RFP) when quoting prices (MBS, 2013). Interested
parties are encouraged to submit their event description to the MBS and RWS websites, and the
IRs would customize their proposals accordingly. They are also able to price their products to
match event’s perceived value.
Sales managers tailor their quotations based on some price guidelines. Not stating these
guidelines publicly gives them the flexibility to adjust prices according to the client. In this
regard, they use first-degree price discrimination in setting prices. This helps them to maximize
their share of the customer surplus.
Majority of the events held in both venues are corporate, resulting in lower price sensitivity, due
to the shared cost effect. However, price still needs to be competitive as companies usually
require three quotes to justify their choice of venue to management.
ADD-ONS
Besides the rental and F&B prices quoted in the proposals, both venues practice add-on pricing
strategies. The venues charge additional prices to the rental of audio equipment or any other
supports required for the event.
COMPARISON WITH RWS
Although RWS and MBS have similar prices in its quoted proposal for the same event (Figure 6),
we observed that MBS charges slightly higher for its rental of Grand Ballroom. However, this
could be attributed to its slightly bigger ballroom than RWS. However, all other components are
quoted lower. Notably, F&B is priced slightly lower in MBS and this price difference could play a
huge difference in events with high attendance. MBS could possibly earn more if F&B is charged
slightly higher. However, with reference to its pricing for add-ons (Figure 7), MBS charges
higher for its rental of audio equipment than RWS. This strategy could help MBS to earn more
revenue from clients who prefer convenience.

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FIGURE 6: MBS & RWS EVENT SPACE PRICING
FIGURE 7: M.I.C.E ADD-ON PRICES
BUNDLING
FIGURE 8: MBS & RWS VENUE PACKAGES
In order to improve their MICE venues’ attractiveness, both MBS and RWS bundles their
facilities into one price (Figure 8).

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MBS bundles the usage of meeting rooms, food & beverage, hotel stays, and other
complimentary products, increasing revenue. Putting the services together in a package also
complicates comparison with competitors, using the difficult comparison effects to decrease
price sensitivity. Furthermore, clients would perceive to have gained through this price
bundling as price is lower in this package as compared to renting the venue without any
package and the complimentary products increases the perceived value.
RWS has not announced similar meeting packages into their website till date.
HOTEL
The goal of hotel pricing is increase revenue per available room (RevPar). In order to achieve
this goal, they can do this by matching price with willingness to pay such that more customers
are encouraged to purchase, and they can extract value from each customer.
VERSIONING
MBS does versioning of rooms. MBS has a total of 9 different kinds of rooms and two distinctive
categories of rooms – rooms and suites (Appendix 2). Versioning helps MBS to segment the
market effectively; people who want more facilities and privileges would have to pay more. The
segmentation hedge is that these privileges can only be enjoyed by staying in the room or
showing their identification – an effective segmentation hedge because it is easy to implement
and not leaky.
YIELD MANAGEMENT
MBS uses yield management to price their hotel rooms. Error! Reference source not found.11
shows the prices for the Deluxe Room over 70 days, and it reflects a dynamic relationship over a
broad range of prices, starting from $359 - $900.
FIGURE 9: MBS DELUXE ROOM NET PRICE BAND
MBS is able to segment the market by selling rooms at a few fare classes (Appendix 4), and
change the availability of pre-defined fare classes over time through yield management. Yield

11. 10
management works such that customers who book the same room for a different day at a
different time would pay a different price. This strategy maximizes the value extracted because
it does not offer unnecessary price concessions.
As per observed, there is a dynamic nestling with booking control as room availability changes
over the different booking days (Appendix 4). MBS shifted booking limits and this strategy could
possibly help MBS to increase its hotel’s revenue.
However, the dynamic pricing at work here does not depend solely on the time of the booking,
as seen by the lack of constant relationship between days to check-in and price (Figure 10).
Therefore, we infer that there are other factors coming into play such as the uncertain demand
for the different fare classes. Since the only observable factor is day of week, the variation of
prices with day of week is shown (Figure 11). When plotted against average prices for each day,
the prices show that Friday and Saturday check-ins are the most expensive, perhaps due to
“staycations” or tourists coming in for the weekend.
FIGURE 10: MBS DELUXE ROOM PRICING VS. DAYS TO CHECK IN
FIGURE 11: MBS DELUXE ROOM PRICE VS DAY OF WEEK

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LOWEST PRICE GUARANTEE
MBS utilizes lowest price guarantee to capture guests to book through their website instead of
3rd party websites (Figure 12). MBS may be doing this in an attempt to capture more customer
value for themselves instead of giving a commission to the 3rd party. This also allows them to
guide the customer through the purchase process in a way to optimize their capturing of the
consumer value, and provide a consistent brand image while retaining control from all touch
points.
FIGURE 12: MBS LOWEST PRICE GUARANTEE
PRICE PROMOTIONS
The goal of these price promotions is to try and transfer the surplus in demand for lower priced
rooms1 to the higher priced Club Rooms and suites, increasing utilization and preventing lost
sales.
The early booking privilege offer (Figure 13) incentivizes customers to confirm their booking
early, decreasing uncertainty in demand and guaranteeing revenue. This time gap between
payment and consumption of the good also decouples the two, increasing the pleasure of
consumption.
1 There are many days when Deluxe Rooms are not available (Appendix 4) – evidence of over demand and
possibility of lost sales.

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FIGURE 13: MBS EARLY BOOKING PRIVILEGE OFFER
The Club Room upgrade offer (Figure 14) tries to capture additional customer value from
people who may have only considered the cheaper room. This discount also increases perceived
customer value.
FIGURE 14: MBS CLUB ROOM UPGRADE OFFER
RWS also utilizes promotions and bundling for their hotels. On occasion RWS uses price
promotions of up to 50% off standard prices at a select few hotels (Festive Hotel, Hard Rock
Hotel, Hotel Michael, Equarius Hotel). This may be an attempt to fill up their hotel rooms by
lowering prices on nights when they expect a low probability of selling out the rooms. These
bundles bundle hotel stays with their attractions (Universal Studios, SEA Aquarium, etc.), or
dining options.

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SEGMENTATION BY OCCASSION
MBS segment its market through the different festivities and occasions, effectively funneling
customers into the same rooms in the same hotel. As people would have different price
sensitivities, MBS bundled and packaged its rooms based on the different the occasions.
Through this segmentation, MBS would be able to attract groups of guests who have different
spending abilities, and different price sensitivities based on these occasions.
FIGURE 15: MBS ROOM OCCASSION PACKAGES
COMPARISON WITH RWS
In comparison, RWS has 8 hotels, each with a different theme and appeal (Appendix 5).
This segmentation caters toward different customer preferences. Different hotels cater to
different interests (art, nature, ocean, etc.), and different customer groups (couples, families,
friends, etc.). The hotels in RWS also use yield management to price their prices, but each hotel
has fewer fare classes than MBS, with an average of only 4 classes in RWS as compared to 9
classes in MBS (Appendix 3 & 4). Prices seem to be consistently higher for weekends than
weekdays, perhaps due to the family-oriented nature of the resort.

15. 14
RECOMMENDATIONS
FACILITIES MEMBERSHIP
MBS contains numerous facilities that on several occasions go largely underused, such as
the infinity pool and a world class gym. Locals who do not wish to stay in the hotel every
night, but would like to be able to utilize the facilities would provide an opportunity for
substantial revenue at a low marginal cost by purchasing a facilities membership.
To preserve its positioning, MBS would only allow limited amounts of transferrable
memberships to be circulated and let the market decide how much prices would be. The
pricing for these memberships could be a base charge plus a yearly maintenance fee. Since
their facilities are award-winning, the membership prices would likely be high, not affecting
their premium positioning.
To ease the strain on the capacity, MBS could stagger the timing of the payment of the
maintenance fee.2
“ALL-YOU-CAN-STAY” MEMBERSHIP
MBS could also use a subscription model for their rooms. It could address the issue of under-
occupancy for their more luxurious rooms, such as the Club Rooms and Grand Club Rooms.3
This membership targets locals.
This membership would allow a maximum of 4 nights per month in the Club Rooms or Grand
Club Rooms, excluding blackout periods, and including fees during peak periods. In order to
retain customers every year they could add extra nights for each year of renewed membership
that maxes out at 15 nights per month. The membership could also have additional perks and
better services to increase perceived value. As this is a monthly or yearly memberships
guarantees a constant stream of revenue which would benefit MBS.
As with all memberships, they can take advantage of people’s overestimation of their future
behaviour, further increasing revenue at no cost.
PARTNER WITH TOURIST ATTRACTIONS
Another advantage that RWS offers over MBS is the amount of attractions they have in-
house. RWS also has collaborations with other tourist attractions such as the Duck Tour.
MBS could collaborate with several different famous attractions around Singapore such as
the Singapore Flyer, Singapore Zoo, and the Night Safari, by bundling their hotel rooms with
2 People feel the pain of payment right after they pay it so the use of facilities right after payment is due is
high and tapers off as time goes by. By staggering payments across all members, this ensures that the
facilities are not overloaded by everyone rushing to the facilities at the same time. (Gourville & Soman,
2002)
3 Although MBS managed to have more than 90% occupancy rate in the past years, the higher priced
rooms are frequently not fully occupied. This is based on empirical data when we tried to book rooms for
70 days. Since they are currently running offers for the Club Rooms, we assume that these rooms are less
occupied.

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tickets to these places. This can be done by offering the option of booking a room only or a
“Resort + Explore Singapore” option.
DIFFICULT COMPARISON EFFECT FOR RFP
MBS can decrease price sensitivity by making their M.I.C.E. proposals difficult to compare to
other venues. For example, MBS could possibly bundle all events requirements into one price
without showing the breakdown of the individual prices. This bundle pricing could making
comparison difficult to other venues as clients would need to increase search cost to identify the
price for each category to determine value. By making RFP difficult to compare, this reduces
price sensitivity and product switching.
ORDER BIAS
MBS currently shows rooms in increasing order for their prices (Error! Reference source not
found.16).
FIGURE 16: PRICES SHOWN FROM LEAST EXPENSIVE TO MOST EXPENSIVE
MBS could show the highest priced rooms and highlight the corresponding in-room amenities
first (Grand Club Room) to anchor people on the higher price and better amenities, making
them less price sensitive.
This will result in more people booking a higher priced room, and also shift demand from the
lower priced rooms. We predict that the demand for lower-priced rooms would not fall to a
level that compromises the occupancy rate because there is currently over-demand. Hence, this
would smooth out demand and increase revenue.

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TOTAL WORDS: 2989 (Excluding captions and appendix)
REFERENCE
UNLV (2012.)Understanding Casino Math. Retrieved 31st Nov, 2013 from
http://gaming.unlv.edu/casinomath.html#he
MBS (2013). Request for Proposal. Retrived 31st Nov, 2013 from
http://www.marinabaysands.com/Singapore-Meetings-Events/Request-For-Proposal/
Smith, T. J. (2012). Pricing Strategic: Setting price levels, managing price discounts, & establishing
price structures. Centage Learning.
Gourville, J., & Soman, D. (2002, september 22). Pricing And The Psychology Of
Consumption. Retrieved from http://www.wright.edu/~tdung/Pricing_consumption.htm
APPENDIX
APPENDIX 1 – RESORTS WORLD SENTOSA LOYALTY PROGRAMME

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APPENDIX 2 - TYPES OF ROOMS IN MARINA BAY SANDS
The improvements in amenities from the next lowest room are highlighted in italiacs.
Room Amenities Breakfast
Price per
night (2
days in
advance)
Deluxe Room 1 King or 2 x twin No 519
Premier Room 1 King or 2 x twin No 549
The Club Room 1 King or 2 x twin
Nespresso machine
iPod/iPhone dock
Yes
Grand Club Room 1 King
42” television
Nespresso machine
Yes 699
Orchid Suite 1 King bed
1 living room
1 bedroom
Yes 819
Sands Suite 1 King
24-hour Butler service
1 Living room
1 bedroom
iPod/iPhone docking station
Nespresso machine
All-in-one printer
DVD Player with library on demand
Yes 1619
Marina Suite 1 King
24-hour Butler service
1 Living room
1 bedroom
iPod/iPhone docking station
Nespresso machine
All-in-one Printer
DVD Player with library on demand
Private bar
Yes 1819
Presidential Suite King and double bed
24-hour butler service
Dedicated team of butlers
2 living rooms
3 bedroom
1 balcony
iPod/iPhone docking station
Nespresso machine
All-in-one Printer
DVD Player with library on demand
Private bar
Yes

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Frette luxury linens
Baby grand piano
Powder room
Exercise room
Media room
Study
3 Walk-in closets
3 LCD TVs
Chairman Suite King and double
bed
24-hour butler
service
Dedicated team of
butlers
2 living rooms
4 bedroom
iPod/iPhone
docking station
Nespresso
machine
All-in-one Printer
DVD Player with
library on demand
Private bar
Baby grand piano
Powder room
Exercise room
Media room
Study
Frette luxury
linens
Games room
7 LCD TVs
Yes

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APPENDIX 3 – PRICE OF RWS FESTIVE HOTEL DELUXE ROOM OBSERVED OVER 70 DAYS

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APPENDIX 4 – DYNAMIC NESTLING OBSERVATION IN ROOM BOOKINGS (MBS DELUXE
ROOM)

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There is dynamic nestling with booking control a because when trying to book rooms on
separate dates, the prices and availabilities were different – some rooms were unavailable on
22nd October, but were on the 28th of October. The figures below show prices available on
different dates – the blue prices were seen on 22nd October 2013, and the red prices were seen
on 28th October for previously unavailable rooms on 22nd October 2013. From this change, we
can infer that they have shifted the booking limit.
APPENDIX 5- ROOM VERSIONING IN RESORTS WORLD SENTOSA