Interview Questions › Guesstimate

Estimate total number of hotel bookings worldwide per month

Estimate the total number of hotel room bookings made worldwide in a single month across all Online Travel Agencies (OTAs) and direct hotel reservations.

Context

Global travel encompasses business corporate travel, leisure vacations, domestic weekend trips, and conference attendees.

Clarifying questions to ask first

• Are we counting room-nights or unique reservation bookings? (Unique reservation bookings).
• Does this include vacation rentals / Airbnb or commercial hotels only? (Commercial hotels).

How to approach it

1. Supply-side: Estimate global hotel room inventory (~18-20 million commercial hotel rooms globally)
2. Apply global average occupancy rate (~65%) and average length of stay per booking (~2.5 nights)
3. Calculate monthly room-nights occupied and divide by average length of stay to get total unique bookings
4. Sanity check against Booking Holdings (~90M room nights/month) and Expedia filings

Framework: Monthly Bookings = (Total Global Rooms × 30 Days × Occupancy Rate) / (Average Length of Stay in Nights)

Sample answer

• Total global hotel rooms: ~18.5 Million rooms
• Average monthly occupancy: 65% -> Occupied room-nights/month = 18.5M × 30 × 0.65 = ~360 Million room-nights
• Average length of stay (ALOS): 2.5 nights per booking
• Total Monthly Bookings = 360M room-nights / 2.5 nights = ~144 Million bookings/month

1. Step 1: 18.5M rooms × 30 days = 555M available room-nights
2. Step 2: 65% occupancy = 360M occupied room-nights
3. Step 3: 360M / 2.5 nights = ~144M unique hotel bookings/month

Executive estimate: ~140 to 150 Million hotel bookings made worldwide per month (~360M room-nights, generating ~$45B monthly GMV).

What interviewers look for

• Global Hotel Room Inventory (~18M)
• Global Occupancy Rate (~65%)
• Average Length of Stay (ALOS ~2.5 nights)
• OTA Market Share Validation