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Product Management Root Cause Analysis Question: Investigating Airbnb's luxury booking value decline in Paris

Why has the average booking value for Airbnb's luxury listings in Paris decreased by 15% over the past month?

Data Analysis Problem Solving Strategic Thinking Travel Hospitality Luxury Accommodations
Data Analysis Root Cause Analysis Pricing Strategy Market Dynamics Luxury Travel

Introduction

The recent 15% decrease in average booking value for Airbnb's luxury listings in Paris over the past month is a concerning trend that requires immediate attention. To address this issue, I'll employ a systematic approach to identify, validate, and resolve the root cause while considering both short-term and long-term implications for Airbnb's business in the luxury Parisian market.

Framework overview

This analysis follows a structured approach covering issue identification, hypothesis generation, validation, and solution development.

Step 1

Clarifying Questions (3 minutes)

  • Looking at the timing, I'm thinking there might be seasonal factors at play. Has this decrease coincided with any particular events or seasons in Paris?

Why it matters: Seasonal trends can significantly impact booking patterns and prices. Expected answer: Information about any seasonal events or patterns. Impact on approach: If seasonal, we'd need to compare to historical data for the same period.

  • Considering the specificity of the decrease, I'm curious about the data integrity. Has there been any recent change in how we calculate or report average booking value?

Why it matters: Ensures we're addressing a real issue, not a reporting anomaly. Expected answer: Confirmation of consistent calculation methods. Impact on approach: If there's a calculation change, we'd need to reassess the data first.

  • Given the focus on luxury listings, I'm wondering about our competitive landscape. Have there been any notable changes in luxury hotel pricing or availability in Paris recently?

Why it matters: Competitive pressures could be driving price adjustments. Expected answer: Information on competitive landscape changes. Impact on approach: If competition has increased, we'd need to assess our pricing strategy.

  • Thinking about user behavior, has there been any shift in the demographics or origin of users booking luxury listings in Paris?

Why it matters: Changes in user composition could explain shifts in booking value. Expected answer: Data on user demographics and origin for recent bookings. Impact on approach: If user composition has changed, we'd need to analyze new user preferences and behaviors.

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