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 !

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 !

1 answer

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)

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