Weird market sizing interview question

Hi all, I got really burntout over the past 7 months and now I'm trying to lateral from IB to Consulting. I had a Partner interview this week where I was asked to find out how many hotel beds were there in Country X? Think of Country X as similar to UAE. I got totally lost and think I got dinged... How would you approach this question?

Comments (9)

 
Feb 19, 2021 - 11:44am

That's tough lol. But if I take the UAE example, I would use the cities as benchmark. You can segment it in 2 categories: popular cities (that are attracting tourists) and less populous cities. [You can also establish a boundary at first like you won't count the 2 stars hotels because they are more like motels lol, but that's optional]. So now you can have an educated guess on the number of hotels in those 2 groups. The UAE has 3 main cities, Dubai, Abu Dhabi, and Sharjah. You can say there are 250 hotels in Dubai, 200 in Abu Dhabi, and maybe 150 in Sharjah. For the other group (less populous cities) you can assume in total they have 150 hotels. All those hotels are 3 stars and above.

Then you want to know the average number of floors in the hotels, I would guess 10 to 12 floors. After that you need to know the number of rooms on a floor, I would assume 12 rooms (might be wrong though). Lastly, you need to think about the average number of bed in each room, I would guess 2 beds/room on average.

Once you have these numbers you can multiply them to have the total number of beds in a hotel floor, then in a city, and then in each city group. To get the total number of beds in the country you will just have to sum up the number of beds you found in each city group.

Always tell your interviewer the margin of errors because those are only estimates and assumptions. And always use a top to bottom approach for market sizing.

 
  • Analyst 1 in IB - Ind
Feb 19, 2021 - 2:07pm

Your approach resonates with me. I started off by segmenting the # of hotels to 3 segments: resorts, normal, and boutique (weight them and assume a avg # of rooms per type and multiple with avg # of beds per room). However, the partner told me let's go off another approach so I moved to a Demand driven approach rather than supply. We went from # of tourists visiting the UAE per year -> percentage of them visiting in peak time (Winter) -> distribute equally over 6 months -> with avg stay of 7 days = # of beds. Obviously there is no right or wrong answer but I felt that the guy didn't like my answer and probs I got dinged. The annoying thing was He was a Principal and came in 5 mins late to what should have been a 30 min interview; in between both of our intros and the 5 mins left out in the end for Q&A, we literally only had like less than 15 minutes to do this market sizing "case". I guess RIP to my hopes to transfer to the UAE office, I'll just have to keep grinding in banking...

 
Feb 19, 2021 - 2:30pm

I won't directly say you got dinged though, especially if it was a 1st round. They are usually testing your abilities to adapt to new situations, hence the new approach he asked you to use. Anyways don't lose hope, like you said there is no right or wrong answers, just your ability think critically and how you can present it in a "client-friendly" way.

 
Feb 26, 2021 - 8:37am

Personally I would start from the number of tourist and business travellers and the make assumptions for an occupacy rate etc. Not one correct answer. Just this approach is probably less "basic" if you will

Array

 
  • Analyst 1 in IB - Ind
Feb 28, 2021 - 4:12pm

Is it normal that I still haven't heard back since the date of this post? or is this normal for unstructured interview processes where they're waiting for other candidates interviewing at different day/weeks ?

 
Mar 2, 2021 - 5:44am

Other candidates should not impact your outcome. 

10 days seems quite a long time; most firms will usually get back to you within a few days. 

Who did you interview with?

Array

 
  • Analyst 1 in IB - Ind
Mar 2, 2021 - 11:08am

I know right... One of the Bs in MBB. Didn't receive anything (email/call) positive or negative back after the final round..

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