Estimation question

How much revenue does Airbnb generate annually in India?

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What this question tests

Estimation combining market penetration and average transaction value for a specific country market.

How to approach it

  1. Estimate India's international and domestic travel booking volume that could plausibly go through Airbnb, using India's large population but currently modest Airbnb penetration relative to hotels.
  2. Estimate the number of Airbnb bookings in India annually, a relatively small figure given India's early-stage short-term-rental adoption, say a few million nights.
  3. Estimate average nightly price for an India listing, meaningfully lower than the US, say roughly INR 2,000-3,000 a night.
  4. Multiply nights booked by average price to get gross booking value, then apply Airbnb's take rate, roughly mid-teens percent, to reach revenue.
  5. State the final figure as an order of magnitude, noting it should be much smaller than the US figure given lower penetration and price levels.

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