Hotels: A market-sizing exercise (part 3 of ???)

Now back from the break, I continue my ongoing analysis of the hospitality market in Vietnam. Now where were we? I had put together estimates for international visitors. And I had backed into estimates for domestic tourists and hotel nights. Now I wanted to do two things, which will probably mean that the posts will be split over two days. First, I wanted to check and see what happens if I take my estimates and apply them to historical numbers. Do they make sense? Are they at least close enough that I can feel comfortable that they are correct?

So, how do we test our estimates? First, we go backwards in time. I had assumed the following: that only 50% of domestic travelers stay overnight; that foreigners stay 5 nights but domestic overnights are for only 2.5 nights on average; that there are on average 1.5 guests per hotel room. I then calculated the total guest nights, which is rooms x 365 x guests per room x occupancy rates. That gets me the “estimated guest nights” in the chart to the right. I then used actual figures for foreign and domestic travelers to come up with estimated foreign and domestic guest nights, again using 5 nights for foreigners and 2.5 nights for locals.

As you can see in the chart, the line fits actually pretty well. It is a bit of an underestimate in some periods, which is my bent – I would rather underestimate than overestimate long term forecasts. But overall, I am pretty happy with this.

Tomorrow, we will use these figures to get future estimates for hotel guests and hotel rooms needed.

BLUE FIGURES ARE ESTIMATES SOURCE: VIETECON.COM ESTIMATES

USING OUR ESTIMATES FOR NIGHTS AND GUESTS, WE HAVE A PRETTY CLOSE FIT SOURCE: VIETECON.COM ESTIMATES