Booking.com·Product Manager·Hiring Manager Screen·Senior

Senior

Jun 2026

Summary

PM interview at Booking.com with a classic estimation question about cancellation rates. Short and focused, probably a screen or early-round case.

Questions Asked (1)

What do you think the global booking cancellation rate is at Booking.com, and why?

Product Analytics & MetricsProduct Sense & Ideation

Author's notes

This tripped me up more than it should have.

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AI HintsAI Generated

Suggested Approach

Start by clarifying the scope of the question—global cancellation rate for all bookings or a specific segment—then break down the metric into its components (e.g., free cancellation vs. non-refundable, lead time, property type). Use a structured estimation approach, anchoring on known industry benchmarks and Booking.com's business model, and conclude with a plausible range and key drivers.

Pro tip: Acknowledge that cancellation rates vary widely by segment (e.g., free cancellation vs. non-refundable) and that Booking.com's rate is likely higher than the industry average due to its flexible booking options; this shows you understand the business model and avoid giving a single number without context.

1. Clarify the metric and scope

Define what 'global booking cancellation rate' means: is it the percentage of all bookings that are cancelled before stay, including no-shows? Consider whether to include only direct bookings or all channels, and whether to segment by region or property type.

2. Segment the booking types

Break down bookings into categories such as free cancellation vs. non-refundable, and short lead time vs. long lead time. This helps identify which segments drive cancellations and provides a more accurate estimate.

3. Estimate using benchmarks and logic

Use known industry data (e.g., average hotel cancellation rates around 20-30%) and adjust for Booking.com's higher mix of free cancellation bookings, which likely pushes the rate higher. Consider that non-refundable bookings have near-zero cancellation rates.

4. Calculate a weighted average

Assume a mix (e.g., 70% free cancellation, 30% non-refundable) and apply plausible cancellation rates (e.g., 40% for free cancellation, 5% for non-refundable) to compute a weighted average, yielding a range (e.g., 25-35%).

5. Validate and discuss implications

Sanity-check the estimate against known facts (e.g., Booking.com's focus on flexibility) and discuss why the rate matters for the business (e.g., impact on inventory, revenue, and customer experience).

Key Points to Mention

Industry benchmarks: average hotel cancellation rates are typically 20-30%, but vary by segment.
Booking.com's business model: high proportion of free cancellation bookings, which increases cancellation rates.
Segment differences: free cancellation vs. non-refundable, lead time, and property type (e.g., hotels vs. vacation rentals).
Weighted average calculation: combine segment rates based on their share of total bookings.
Seasonality and regional variations: cancellation rates can spike during holidays or in certain markets.
Business impact: cancellations affect inventory management, revenue forecasting, and overbooking strategies.

AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.