Market sizing case

Market analysis market estimation market size Market sizing
New answer on Jan 22, 2020
3 Answers
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Anonymous A asked on Jan 19, 2020

Hi there,

I have been recently interviewed by Bain and they have asked me how many tourists there are in Paris in a year? How would you estimate it?

Thanks a lot!

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Luca
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replied on Jan 19, 2020
BCG |NASA |20+ interviews with 100% success rate| 120+ students coached |GMAT expert 780/800 score

Hello,

You could approach the problem in 2 different ways:

  1. Estimating the number of hotels and airbnb apartments in Paris and their occupancy (then you can increase it by a small percentage to include people that are hosted by friends/relatives)
  2. Estimating the number of flights and trains that arrive in Paris in a given day. This way is more complex because you have then to estimate the percentage of passengers that are tourists. Furthermore, you are not considering tourists coming by car

I would follow the furst methid and then propose to do a sanity check of the result using the second one.

Does it make sense?

Best,
Luca

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Anonymous B on Jan 20, 2020

Is it possible to do the above process in 5 minutes (given this is a market sizing question in a case)?

Udayan
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replied on Jan 22, 2020
Top rated MBB coach with many offers /Ex McKinsey EM in New York /6 years McKinsey recruiting experience/Real cases

Hi

There are a few ways to estimate the number of tourists in Paris. One quick way is highlighted below.

Take the total population of Paris - ~10M

Assume on average in any given day ~2.5% of the population are some form of tourists (this includes domestic, int'l, EU, business etc.) - so 250K people on any given day

Assume that on avg, a tourist stays in Paris for maybe 3 days (Some more and some less)

That means every 3 days there is a new set of 250K people coming into Paris. Which means in one year, 122 sets of 250K tourists visit Paris (365/3)

122*250K is ~30M tourists annually in Paris.

You can play with these assumptions to get a different number

Hope this helps,

Udayan

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Clara
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replied on Jan 21, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

The most important thing in cases like this one is to be very structured and not loose your nerves. I would go with calculating the maximum hotel (hotels/appartments/places where turists stay) capacity and then calculate the % during the months (e.g., calculate 95% in June but only 80% in December)

Hope it helps.

Cheers,

Clara

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Luca gave the best answer

Luca

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