Airbnb. Cheaper nights.
More profit?
A lower price can fill more nights. Work out whether it fills enough of them, and what it does to profit, with less help than the Spotify case gives you.
4% lower average nightly price
3% more nights booked
Do bookings grow?
Does profit?
A hypothetical price test. You will separate it from Airbnb’s reported results.
You are asked one question at a time, not told each formula.
Each exercise gives you the business question and the cells to fill. How you get there is up to you. Try it, then check it: the grader accepts any formula that calculates the right thing from the right cells.
After your first check, a worked solution explains the method and the mistakes people commonly make. Hints are there if you are stuck. Both are recorded with your attempt, so work you did on your own can be told apart from work you did with help.
- Starting data
- Calendar 2025 actuals
- Forecast
- Four quarters of 2026
- Level
- Intermediate, after the Spotify case
- What you need
- Spreadsheet formulas; a laptop or desktop for the browser sheet
One model, five exercises.
Nights × average daily rate make gross booking value. Part of it becomes revenue, which pays for costs. Earlier steps are filled in for you; sign in to carry your own work forward.
- 10 min
The price-cut challenge
Decide whether a cheaper night can grow bookings, before any method is shown.
- 8 min
Rebuild the reported numbers
Rebuild 2025 GBV from its drivers and find how much of it became revenue.
- 10 min
Forecast bookings and revenue
Build 2026 nights, prices, bookings and revenue from the drivers.
- 8 min
Costs and operating profit
Carry revenue through costs to 2026 operating profit and margin.
- 10 min
Does the price cut pay?
Find the gross-profit break-even and explain the assumptions behind it.
Times are authoring estimates, not a timed assessment.
Explain the assumptions behind your answer.
The last exercise asks for a short written recommendation. The worked solution shows a model answer to compare it with. Your explanation is not graded; the grade covers the spreadsheet calculations only. A good answer:
- States a recommendation and cites the revenue and gross-profit results behind it.
- Distinguishes the nights needed to hold revenue from the nights needed to hold gross profit.
- Names the assumptions that decide it: how many nights a lower price buys, and which costs follow nights.
- Says what evidence would change the answer.
The data behind the case
Nights and Seats Booked, gross booking value, average daily rate, revenue and fourth-quarter costs come from Airbnb’s Q4 2025 shareholder letter, published on 12 February 2026. First-, second- and third-quarter costs come from Airbnb’s Form 10-Q filings for those quarters. Figures are as reported; later 2026 results are excluded.
Forecast growth, cost ratios and the price test are hypothetical. Revenue divided by gross booking value mixes Airbnb’s fees with the timing between booking and stay, so it is not a fee rate. Operating profit is not cash flow.