Based on available data gathered from Singstat.gov.sg and the Singapore Tourism Board, I estimated the market size for hotel micro stays in Singapore. The key information I relied on were (1) international visitor arrivals that stayed in Singapore for less than a day, and (2) the number of transit passengers.
Thereafter, the figures were used to estimate the Serviceable Addressable Market (SAM) and Serviceable Obtainable Market (SOM) for the product in Singapore.
International Visitor Arrivals By Length of Stay
Assumptions
- Data was only available till July 2022; extrapolated Aug - Dec 2022 data by assuming a 5% month-on-month growth
- 20% of travellers who visited Singapore for under 1 day book hotel micro stays
- Booking.com holds a 7% market share
Scheduled Aircraft and Transit Passengers
Assumptions
- There is an estimated total of 80,000 transit passengers in 2022 due to the recovering travel industry
- 20% of transit passengers book micro stays while awaiting connecting flights
Market sizing - TAM SAM SOM
The market sizing analysis above reinforces the hypothesis that the Singapore market may be too small, and the growth opportunities for the hotel micro stay product lie largely in other markets.
Before penning the user interview questions, I constructed a user persona to reinforce contextual understanding of the scenario in which a user may consider booking a hotel micro stay. In addition, I mapped out a typical hotel room reservation process to better understand the potential problems, goals and sentiments of the user during different phases of the customer journey.
User persona and customer journey map
I conducted interviews with 3 users and aimed to understand the scenarios in which they would (or would not) book a micro stay, as well as to gain further insights into their motivations, considerations, and alternative solutions that would solve the same underlying problem. The goal was also to synthesize the interview findings to validate the risky assumptions / hypotheses identified earlier.
One of the key insights gathered was that there is minimal demand for hotel micro stays in a tourist or holiday context. Reasons include:
- Tourists are inclined to book hotel rooms for overnight stays, not for a few hours on an ad-hoc basis
- Tourists are likely to make full use of their time exploring the destination country
- Tourists may have alternative workarounds, such as requesting for early check-ins or leaving their luggage in the hotel lobby.
Through the interviews, I gained a higher level of assurance that the two core uses identified were indeed the scenarios in which users see a potential need to book micro stays. This raised my level of confidence in the product's value proposition.
User interview questions and responses
Next, I set out to brainstorm a prototype to help further validate the product, as well as define the success criteria for the risky assumptions to be validated.
Riskiest assumptions and success criteria
In the context of this case study, I focused only on the demand-side assumptions to be tested. This is notwithstanding that the supply-side assumption (i.e. hotels are willing to offer micro stays) remains a critical hypothesis to be tested and validated.
I determined that it would be most efficient to leverage the existing Booking.com product and infrastructure to implement a landing page + concierge prototype. This is because the website (and app) are natural customer touchpoints that may lead to higher conversion rates for micro stay reservations.
Prototype ideation
The option to book micro stays could trigger upon specific conditions being met. For example, when (1) user books a transit or connecting flight with a substantial layover duration (e.g. 6 - 8 hours) or (2) user books a red eye business class flight and a return flight on the same day.
Fixed banner
Micro stay landing page
Auto-triggering of option to book micro stay
Booking.com already has a large existing user base to be tapped on to test the hypotheses. One way to find users is to announce the micro stay feature to Booking.com’s email subscriber list and invite users who fit the user persona(s) to participate in prototype testing.
Another method is to run a lucky draw where participants test and give feedback on the prototype in exchange for prizes such as flight / hotel discounts.
As the key assumptions to be validated requires qualitative input, the method of testing could be in the form of a moderated user interview and moderated / unmoderated usability test.
For the usability test, the metrics that could be considered include:
- Task completion rates
- Duration of booking
- Rating on user booking flow
The qualitative and quantitative data gathered during the prototype testing phase will facilitate further validation of assumptions, iterations, and improvements on the MVP prior to committing technical resources to develop the features.
Next, I constructed 7 sets of user stories to outline the customer's wants and objectives, and brainstormed features for each user story.
User stories & potential features
After determining the features, I estimated the impact on the overall product offering and the complexity / effort required to build them. The must-have features include basic / primary functions of the micro stay product and result in the most value-add for the end user.
Feature prioritization by value
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Effort / Value map used for feature prioritization
In practice, the prioritization process would include input from other stakeholders (e.g. software engineering team, business analysts, product designers), and consideration of budget & timeline constraints. Alignment of the prioritized features is especially important as this ensures that the members of the product team and the stakeholders have the same objectives and expectations in mind.
Combining both the value and effort required to build each of the features identified, I then prioritized the features to be built into the minimum viable product.
Effort / Value map used for feature prioritization
After research and analysis, it seems that the market in Singapore is limited and launching a full-scale hotel micro stay product in Singapore is likely to be a sub-optimal decision with a low return on investment (ROI). Instead, my recommendation would be to reframe the product strategy and regard the Singapore launch as a soft launch / test market. This will allow Booking.com to test the idea with real users in the market before committing additional budget and resources to developing a fully-fledged product.
With the learnings from the Singapore market, the micro stay product can be further improved and refined, in preparation for future expansion into markets that are primed for a higher level of growth. I believe this approach will significantly improve the product's chances of success in the market.
