I guess going from the demand side will be quite challenging so I'm trying to find a supply-side approach but I'm not very satisfied with what I've come up so far.
Many thanks !
How would you approach a market sizing of the hotel industry in any given country (US or France for instance)
Hi,
I would try to make an estimation from demand side:
- We cant split market value into two components: $ spent by citizens of given country and $ spent by people from abroad. I think that we can make a decent estimation of percentage of reservations from abroad. I guess that for US it is less than 10% and for European countries slightly more (10-20%?). Not sure about that, but certainly it is not more than 20-30%, so we are not making huge mistake.
- Now we need to calculate how much $ do citizens of, let's say, US spend annualy. In order to calcualate that, I would split it into business travels and holidays.
- For business travels: x% of people 18-65 y.o. do business travels y times a year. Each travel is on average z nights and one night costs u.
- The same for holidays, but I would look at families
- edit: I forgot to mention that for 3. and 4. we need to include % of travels within given country
I checked numbers for US and it seems that this approach has passed sanity check. What do you think?
(edited)
Related BootCamp article(s)
Market Sizing
Market Sizing Cases are used to test your quantitative and reasoning skills. The interviewer evaluates your structure, numbers-handling and business sense.
20 Comment(s)Important Facts
It's essential to know some key figures regarding geographies, population, economies for your case interviews. We summarized them for you here.
9 Comment(s)Related case(s)
Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise ... Open whole case
You have inherited the “Old Winery” from your grandfather, a winery which has been family owned for five generations and can be dated back to the 16th century. Half of the eleven hectares are used to grow white grapes, the other half to grow red grapes. They are grown in the conventional way, i.e. ... Open whole case
Onlinestar, an online retailer of furniture and garden products (core business), has grown significantly in recent years as a result of an expansion of its product portfolio. The company mainly imports goods from Chinese manufacturers but also operates its own production of cat lavatories (special b ... Open whole case
Nutripremium is a very well-known premium nutrition food company in Europe (€1 billion revenue last year). It is based in Spain and has an excellent market share not only in its home country but also in Portugal, France, Italy and Germany. Nutripremium has two main lines of products: Vitamin-supp ... Open whole case
Beyer, one of the biggest pharmaceutical companies in the world, just invented a very reliable vaccine against Chickenpox, a disease that affects children in the age from 2 to 16 years. Beyer came to you wondering what their potential sales in Europe in the first year would be if they launched this ... Open whole case
Similar questions
