Interview Question

Product Owner Interview

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Booking.com

How much risk does a business take on a given guaranteed price based on the price of the guaranteed product with the non-guaranteed product? This was given with actual numbers and I needed ot figure out the answer.

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Guaranteed product in Booking.com's case refers its model (agency - where it doesn't guarantee rooms) to its competitors (merchant/guaranteed - where rooms are pre-bought like wholesale in advance). The risk calculation needs to factor in - What price can the rooms be pre-bought at? What price can it be sold at (i.e. margin) - What probability is it that they will get sold (here the risk is of buying the room but not managing to sell it forward) - How will they be placed in search when compared to rooms which aren't pre-bought (conflict risk?) And some more complicated angles to dig deeper might be how it affects other hotels, whether you need to prebuy for the whole year or for a season or for just a short period, or how long in advance you need to prebuy (since youre competing with other people also trying to prebuy) etc PS - I was actually asked this question in a mock interview on preptick.com, and got this answer from an ex-Booking guy, so I'm pretty sure its accurate ;)

Anonymous on

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My humble attempt: Analogy. Uber's scheduled rides vs. on-demand rides with a fixed price given source, destination and nature of taxi. Loss mostly boil down to (a) loss of new & existing consumers due to non-guarantee of taxis in scheduled rides (b) consumer security in the event of non-guarantee (c) more consumer cancellations affecting drivers due to learnt behaviour

Karthik on

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