DR Andargachew Gedebo Abete

PROJECT PROPOSAL ON THREE STAR (G+5)
INTERNATIONAL TOURIST HOTEL
Project Location: - Arbaminch town
Promoted by: Dr. Andargachew Gedebo Abite
August, 2024
Arbaminch
Table of Contents
Basic Information........................................................................................................................................4
1. INTRODUCTION.........................................................................................................................5
1.1. Investment in Ethiopia...................................................................................................................5
1.2. Hotel and Tourism sector in Ethiopia............................................................................................6
1.3. Promoter Background....................................................................................................................7
1.4. Ambition of creating the hotel project...........................................................................................7
1.5. Purpose and Amount of Loan........................................................................................................7
2. The Project Description.................................................................................................................8
2.1. Project description and Justification..............................................................................................8
2.2. Project Objective...........................................................................................................................8
2.3. Mission and goal.........................................................................................................................9
2.4. Project location and justification...................................................................................................9
3. MARKET STUDY......................................................................................................................11
3.1. General Overview........................................................................................................................11
3.2. Present supply in Arbaminch.......................................................................................................12
3.3. Demand for hotel services...........................................................................................................13
3.4. Demands Evaluation Mechanism................................................................................................15
3.5. Capacity and service programme................................................................................................16
3.6. Marketing strategy.......................................................................................................................17
3.7. Competitors Overview.................................................................................................................18
4. TECHNICAL STUDY................................................................................................................19
4.1. Design and particulars.................................................................................................................19
4.2. Physical appearance.....................................................................................................................19
4.3. Core facilities...............................................................................................................................19
4.4. Hotel Furniture and Equipment’s................................................................................................22
4.5. Inputs/ raw materials and utilities................................................................................................23
B. UTILITIES.......................................................................................................................................25
C. TECHNOLOGY AND ENGINEERING........................................................................................25
A. Source of Technology..................................................................................................................27
B. ENGINEERING..........................................................................................................................27
DR. Andargachew Gedebo three star hotel projectPage 2

C. Land, Building and Civil Works..................................................................................................38
4.6. Environmental impact assessment...............................................................................................39
4.7. Implementation Schedule............................................................................................................40
5. ORGANIZATIONS AND MANAGEMENT.............................................................................42
5.1. Organizational Structure..............................................................................................................42
5.2. Management................................................................................................................................43
5.3. Manpower Requirement..............................................................................................................43
5.4. Training Requirement..................................................................................................................46
6. FINANCIAL ANALYSIS...........................................................................................................47
6.1. FINANCIAL ANALYSIS.............................................................................................................47
6.2. TOTAL INITIAL INVESTMENT COST.....................................................................................47
6.3. FINANCIAL STATEMENTS.......................................................................................................48
6.4. FINANCIAL EVALUATION........................................................................................................51
7. ECONOMIC BENEFITS.......................................................................................................52
8. SOCIO ECONOMIC AND ENVIROMENTAL IMPACT........................................................52
9. REPORTING, MONITERING AND EVALUATION...............................................................52
9.1. MONITERING..........................................................................................................................53
9.2. REPORTING.............................................................................................................................53
9.3. EVALUATION.........................................................................................................................53
10. CONCLUTION...........................................................................................................................53

Basic Information
 Name of the Promoter: Dr. Andargachew Gedebo Abite
 Type of the Project: Three Star International Tourist Hotel
 Type of Business: Sole proprietorship
 Project Location: Arbaminch Town
 Project capital: The total investment capital of the project is estimated at birr
55,000,000 of which:-
 Birr 52,600,000 (95.64%) is for fixed investment cost
 Birr 2,400,000 (4.36%) will be assign for working capital
 Source of finance: The total investment capital of the project is to be financed
from the promoter’s equity and bank loan.
 Birr 16,500,000(30%) is contributed by the promoter
 Birr 38,500,000 (70%) is to be financed by local banks.
 Man power requirement: 120 employees will be benefited within this project,
out of which 80 permanent and 40 casual workers during construction phase.
 Land requirement: The total area of 1500 m2 of land is required for the project

1. INTRODUCTION
1.1. Investment in Ethiopia
Ethiopia is now becoming more and more investment friendly country. The
Government is creating favorable condition that would highly encourage the private
Sector to be engaged in almost all areas of the economy. The country with
population of come 80 million offers significant domestic market for locally for
locally produced goods and service the country is also a member of the
common Market for eastern and southern Africa COMESA offering huge benefit
of Exporting commodities in preferential tariff rates to a wider regional market.
Privet investment should be encouraged to increase form year to year and
Investment constraints have to be alleviated in order to pave development ways so
that investment s e c t o r happens to be determinant about factor of economic
development of the country like Ethiopia.
It is usually considered as the engine of the economy .both private and
government Bodies in many ways have commonly agreed this idea economic
development in Any case needs both efforts of the privet as well as the public
sector. There are Investments that could not be undertaken by privet sector due to
its difficult nature I .e high initial capital and long gestation period.
However, the passed command economy system and the lack of experience
between both sides have made it so hard for a private sector to flourish. But
now a day as Ethiopia follows free market economy ‘the roll of private sector
for the achievement of the economy policy. Accordingly, the Ethiopia federal
democratic government is encouraging investors to invest their records to contribute
to the development of the country in all sectors by avoiding all barriers and
facilitating all the mince for the investment

1.2. Hotel and Tourism sector in Ethiopia
Ethiopia has vast potential for development of various economic sectors. Although
agriculture is the mainstay of the country’s economy the opportunity to invest in
other sectors especially in Hotel, Tourism and various recreation activities are there.
Although Ethiopia is endowed with many natural and manmade tourist attractions,
these resources have not been sufficiently exploited. The country’s geographical
location and the remarkable physical features and climate have endorsed it with rich
and varied natural heritages. Despite considerable demand, tourism sector remains at
relatively low stage of development.
The Hotel and recreation service facilities in Ethiopia have been found at a lower
level of development. The number of Hotel service establishments in the country
has remained insignificant to respond to the customer’s demand. Only few Hotels
have the capacity or quality to provide good accommodation and catering facilities to
fulfill tourists need. There are only few hotels in the capital, Addis Ababa, and other
big towns of the region states that organized on international standard to fulfill the
consumer’s needs.
The government of Ethiopia has devised a long term strategy that gives due regard to
the preservation, development and promotion of the country’s tourist attraction. This
includes plan for expansion of tourist facilities and the necessary infrastructure.
Indeed in the wider sense the country has a good potential for the development of
high standard hotels, recreation and market center and there is a growing
realization that this sector holds a significant development perspective, which
should be fully exploited in the planned and controlled manner.
In adopting a planned and regulated approach the country is in a position to expand

its hotel and tourism sector in a way that emphasizes environmental conservation and
enhances the quality of the overall tourist experience. This will contribute
substantially towards improving the standard of living and the quality of life of the
population.
The past trend shows that most of the high standard hotels and recreation centers are
concentrated in the capital, Addis Ababa. The number of hotels and recreation
service facilities in other regions of the country has remained insignificant to respond
to the customers demand.

By taking this encouraging as an opportunity the promoter project plan to establish 3 star
international/tourist Hotel service in Arbaminch town for the benefit of the promoter,
the district community as well as the country as a whole.
1.3. Promoter Background
The promoter, Dr. Andargachew Gedebo Abite has a work experience in hotel and
management business activities. During this time, the promoter gained a
vast knowledge and skill. With this reliable experience, Dr. Andargachew
Gedebo Abite knows how to manage and lead any organization to profit and also
know how to handle different challenges in the working environment. Moreover
Dr. Andargachew Gedebo Abite has a very good reputation with banks and
different financial organizations.
1.4. Ambition of creating the hotel project
According to the preliminary market research, the demand for hotel service is very
high and yet the supply is limited leaving a huge service gap to the customer.
Unfortunately there is no saturated standard hotel (3 stars) in the area. Although
few less than three star hotels have already working in the area, but still huge gap
is there in between demand and supply in the town. The service (3 star hotels) is
widely accepted in Arbaminch town, Government employees, Private employees,
Tourists, local customers, and to some extent even in rich house-holds. So there is
good scope for establishing the units for establishing and maintain 3 star standard
/international and tourist hotel service in Arbaminch as well as in the region. Due to
this, it has become imperative to build and maintain 3 star standard hotels service for
the mankind in prevailing conditions.
1.5. Purpose and Amount of Loan
Purpose and amount of loan requested: The purpose of the loan is to import machineries
and purchasing steel for building construction. Beside this the promoter believes that, the
loan will strengthen the relationship between the investor and the bank. Furthermore, the
investor gets strength to advance to various viable economy sectors in the country. The
source of the project finance is from the promoter’s equity and bank loan. Out of the total
investment capital 16,500,000(30%) is to be contributed by the promoter while the

remaining balance of Birr 38,500,000 (70%) is to be covered by the local bank.
2. The Project Description
2.1. Project description and Justification
International standard tourist hotel is high class hotel where services like bedroom,
catering, meeting rooms, multipurpose assembly hall, Spa (Hot Spring), gymnasium,
sauna and massage, other sports facilities.
A hotel is an establishment that provides paid lodging on a short-term basis.
Facilities provided may range from a modest-quality mattress in a small room to
large suites with bigger, higher-quality beds, a dresser, a refrigerator and other
kitchen facilities, upholstered chairs, a flat screen television and en-suite bathrooms.
Small, lower-priced hotels may offer only the most basic guest services and
facilities. Larger, higher-priced hotels may provide additional guest facilities such as
a swimming pool, business center (with computers, printers and other office
equipment), childcare, conference and event facilities, tennis or basketball courts,
gymnasium, restaurants, day spa and social function services. Hotel rooms are
usually numbered to identify their room.
2.2. Project Objective
The main objective of the project is aimed at to maximize the return on invested
capital in the form of profit for the promoter. However, its implementation will
benefit the employee, the consumer society and the government at different levels. In
this respect the project is aimed to promote the following objectives:-
 To maximize the return on invested capital through modern Hotel services

 To raise the significance and importance of the sector and thereby raising
its contribution to the national economic development
 To give quality and standard hotel service
 Effectively use local inputs and strengthening the linkage between
agriculture and other sectors of the economy
 To provide gainful employment to a large segment of the population of the
project area and augment earning capacity at the grassroots level,
 Increase government revenue through the different forms of taxes, which
in turn used to facilitate social and economic development.

In general, the project is believed to have significant social and economic benefits that
accrue to the society, the region and the country beyond the financial returns to its owner.
2.3. Mission and goal
Mission
 Mission of the particular project is to expand the standard star hotel system
and to give quality service.
 To prove to other people that struggle for a better life and economic
independences can do business and bring change and can make a difference if
opportunities are given.
 To become financially liquid and guaranteed more than ever.
Goal
Objectives are the goals toward which activities of the business are directed and one
of the most important functions the business owner must perform is setting
objectives. This important aims of this sole proprietorship business among others
include the following highly interrelated general goals with each other.
 To create employment opportunities for 125 permanent and 175 causal
 To achieve standard tourist hotel and give quality service.
2.4. Project location and justification
Location
Arba Minch (formerly called Ganta Garo) is a city and separate woreda in the southern part
of Ethiopia. "Arba Minch" means "40 springs", originated from the presence of more than
40 springs. It is located in the Gamo Zone of the Southern Nations, Nationalities, and
Peoples Region about 500 kilometers south of Addis Ababa, at an elevation of 1285 meters
above sea level. It is the largest town in Gamo Zone and South Ethiopia Region. It is
surrounded by Arba Minch Zuria woreda. This Town has plenty of natural gifts including
the bridge of God, Crocodile ranch, crocodile market, different fruits and vegetables,
different fishes farmed from Chamo and Abaya Lakes, more than 40 springs, different
cereals, and crops, surprisingly having the two big Lakes in the country, lake Abaya and
Chamo, respectively, next to Lake Tana, etc. This makes the town one of the tourist
destinations in Ethiopia, which comprises Nech Sar National Park, home to the country’s
varied wildlife and plant species.
Climate:

In Arba Minch, the wet season is warm and overcast and the dry season is hot and
partly cloudy. Over the course of the year, the temperature typically varies from 60°F
to 91°F and is rarely below 55°F or above 95°F.
Based on the tourism score, the best times of year to visit Arba Minch for warm-
weather activities are from mid-June to early October and from late October to late
January. Geography: Arba Minch is located at latitude 6.03333 and longitude 37.55. It is
part of Africa and the northern hemisphere.
Demographics:
As of the latest 2007 population census conducted by the Ethiopian national statistics
authorities, Arbaminch has a total population of 143955 urban inhabitants. For the
capital city 29378 households were counted, which results in an average of 4.9
persons to a household. Although all Ethiopian ethnic groups are represented in
Addis Ababa because it is the capital of the country, the largest groups include all
nation nationality
Tourism: Tourism is a growing industry within Addis Ababa and Ethiopia as a

whole. The country has seen a 10% increase in tourism over the last decade,
subsequently bringing an influx of tourists to Arbamnich.

3. MARKET STUDY
3.1. General Overview
The hotel industry consists of many different services, including accommodation,

restaurants, and cafes and catering. The market for the hotel industry, especially
classified hotels in a developing country like Ethiopia, is closely linked to the tourism
industry, because a majority of consumers for the sector services come from international
tourists.
According to the United Nations Statistical Commission, Tourism comprises the
activities of persons traveling to and staying in places outside their usual environment
for not more than one consecutive year and staying at least 24 hours in the country
visited.
The total number of international tourists arriving in Ethiopia is steadily increasing. The
highest number of tourist arrival is in 2005 i.e. 227.4 thousand. As can be seen from
Table 3.3, during the period 1991-2005 except for the decline observed in year 1998,
the number of tourists visiting the country was consistently growing. The growth rate
registered varies from year to year; the lowest was in 1992 (2%) and the highest in 1997
(27.7%). However, on average during the period under consideration tourist arrivals have
been increasing by about 8 % per annum.
Table 1 Total Tourist arrivals in Ethiopia
Year Number Growth Rate
1991 81,581 -
1992 83,213 2
1993 93,072 11.9
1994 98,070 5.4
1995 103,336 5.4
1996 108,885 5.4
1997 139,000 27.7
1998 112,000 -19.4
1999 115,000 2.7
2000 135,954 18.2
2001 148,438 9.2
2002 156,327 5.3
2003 179,910 15.1
2004 184,079 2.3
2005 227,398 23.5
Source: - Ethiopian Tourism Communion.

During the same period (1991- 2005), on average about 17% of the total number of
tourists that have visited the country were for vacation purpose while those who
visited the country for business account 22% of the total. Regarding the others,
transit accounts for 18%, visiting relative 9%, conference 11% and those who did
not stated their purpose account for 22% of the total.
3.2. Present supply in Arbaminch
Accordingly, assuming 365 working days, currently international standard hotels

in Addis Ababa have a total of 597,140 per annum tourist night room capacity.
Based on discussion with various private hotel managers and other knowledgeable
persons the average stay of tourists in a hotel is assumed to be 4 days.
In order to project tourist arrival in to Ethiopia, the past trend in tourist

arrival is considered. During the period 1991-2005, the total tourist arrival in the
country has registered an 8.2% average growth rate. Accordingly, assuming that
this growth rate will continue in the future and taking year 2005 figure (227,398)
as a base, tourist arrival is forecasted. Moreover, in order to compute the
unsatisfied demand the total annual capacity of international standard hotels
in Addis Ababa, which computed to be 597,140 rooms per annum, is taken
as the existing capacity. The projected tourist room requirement, which is
calculated by taking the projected tourist arrival and multiplying it by the average
hotel stay of tourists (4 days), the unsatisfied demand, is shown in Table 4.3.

Table 2. Existing hotel capacities, projected and unsatisfied demand
Projection of Room Night Existing Hotels Un

Year Tourist Arrival Demand Annual Satisfied
Capacity Demand
2008 286,456 716140 597,140 119,000
2009 309,372 773430 597,140 282,283
2010 334,122 835305 597,140 381,283
2011 360,852 902130 597,140 488,203
2012 389,720 974300 597,140 603,675
2013 420,898 1052245 597,140 728,387
2014 454,570 1136425 597,140 863,075
2015 490,935 1227338 597,140 1,008,535
2016 530,210 1325525 597,140 1,165,635
2017 572,627 1431568 597,140 1,335,303
2018 618,437 1546093 597,140 1,518,543
2019 667,912 1669780 597,140 1,716,443
2020 721,345 1803363 597,140 1,930,175
Accordingly, based on the market study and other considerations a three star
hotel with room capacity of 75 to 100 is recommended.
3.3. Demand for hotel services
The feasibility study conducted for this project deals with the demand and supply
analysis for the hotel project to be established in the area by taking the number of
international and national tourist, investors, employers and government directly
related with the level of development of the economy in general and the tourism
sector in particular. It is a function of the number of both domestic and foreign
tourist travelers in the area, travelers for the commercial or business purposes,
travelers for conference and other assembly purposes, residents in the area (in fact it
depends up on the standard of the hotel and the living status of the residents) etc.
Hotel supply and its growth

Promoters with stronger balance sheets, technical support and access to foreign
currency have a higher likelihood of completing their developments. The result of
this is a more measured and appropriate supply pipeline of new hotels. New supply
is increasingly branded with this growing

3.4. Demands Evaluation Mechanism
The following are some of the methods which can be used to evaluate the demand of
the services. By use of Customers feedback follow up form
High GDP growth and increasing corporate entry is driving hotel demand in the
business and conference segment. Ethiopia has a strong domestic economy which
is driving demand growth in the mid-market.
Investment
Arbaminch has received significant investment into the hotel sector in recent years,
with a number of successful local entrepreneurs investing in hotels. This has largely
shaped the type of supply in the market, with few of these investors having turned to
global brands to manage their properties. The extensive list of branded hotels that
has been announced is evidence that this trend has changed. The easier access to
finance and technical service expertise associated with having a brand are driving
this change.
Outlook
Corporate demand growth prospects are positive with strong GDP forecasts and
growing regional demand, complimenting the significant and well established aid
and diplomatic markets that are already present in the city. Performance will be
shaped by the extensive supply pipeline of hotels across the city during the
coming years. Many of these projects have stalled the expectation of further delays
and projects being put on hold are likely to offer existing players in the market some
respite. On the whole we are positive about the performance outlook, yet caution
against potential oversupply.
What drives Arbaminch demand?

Addis Ababa has three distinct demand segments, namely the corporate market, aid
and diplomatic markets. The corporate market is primarily domestically driven, with
a limited presence of international companies despite the high growth in the
economy. This segment typically uses 3-star unbranded hotels. There are signs that
the Ethiopian economy is opening up and although this trend is anticipated to be
gradual, it will ultimately increase corporate entry into the market and subsequently

hotel demand from the international corporate market. We are already starting to see
this happen with the number of regional and business travelers to the market
growing steadily.
Pricing
The pricing of hotel services depends considerably on the quality of service

rendered and its location.
The hotel service will also earn revenues from the sale of food and drinks and other
hotel services. The total revenue earned from this service is estimated at 35 per cent
of the revenue obtained from room rents.
3.5. Capacity and service programme
Capacity
From the market study, it is observed that there is a great demand gap
between the demand and supply of international tourist standard hotel service.
Therefore, taking in to account the market study and economic scale of service
provision the envisaged international tourist standard hotel will have capacities as
shown below:
Table 3. service capacity of the envisaged international tourist standard hotel
Sr. No. Type of Service Feasible Service Capacity

1 Bedroom 80 rooms, 20 will be double rooms, 50 single rooms
and 10 suits.
2 Bar and Restaurant
Restaurant (Modern and 200 at a time each
traditional
Coffee Shop 10- 15 seats at a time
3 Sauna and steam bath 20 heads/day
4 Gymnasium 20 heads/day
5 Swimming pool (Big and 45 Heads/day and 20 head/day
small pools)
6 Meeting room 50x3 seats
7 Night club 300 at a time

Service Programme:
At the initial stage of the service provision period, the hotel would require some
years to penetrate into the market and capture a significant market share.
Therefore, in the first and second year of service the capacity utilization rate will
be 75% and 90%, respectively. Full service provision shall be attained in the
third year and then after. The proposed service provision program is shown in
Table 4.7.
Table 4 service provision programe
Sr. Service Service Year

No. 1 2 3- 10
1 Service provision rate (%) 75 90 100
3.6. Marketing strategy
As discussed earlier the major target groups of hotel sector are tourists who arrives
the country for business, leisure, conference and other purposes. Providing quality
services and consistently improving with the changing situations should be the
promoters’ objective. Hence, according to the feasibility study, the promoter has the
following marketing strategies:
 Contacting government and private agencies affiliated with tourism on a
regular basis, informing them of any corporate rate, discount programs,
availability of services, etc.
 Emphasizing the access of the proposed hotel to support client’s

attractions, as well as the services and amenities available,
 Special effort will be made to emphasize the price-value relationship of the
service available,
 Actively marketing the hotel prior to the completion and opening,
 An aggressive local marketing effort and promotion of the hotel market to
enable the hotel to capture a more than proportionate share of support within
the market,
 Working with local people to establish a competitive amenity package
responsive to specific requirements.

3.7. Competitors Overview
My service compared to the competitors looks like:

 I keep the promise I make
 Quality service is my motto
 Transparent price setting and fair price will be bases to win the competitors
 The promoter long term experience and goodwill that he has achieved from
his respected customers will allow me to win the competitor. In addition to the
above, the failure stories that we have observed from others and the comments
collected from our customers will help us to win our competitors.
 In conclusion, his service compared to the competitors looks like:

4. TECHNICAL STUDY
4.1. Design and particulars
The project owner interest, as regards to how the overall building design looks like
and the level of service to be rendered by the envisaged project, is dependent on the
area at which the buildings to be placed. The owner has already decided to commit
himself to construct a three star hotel having the full knowledge what is required
by the national and international standard of Hotels in Ethiopia. The standard by
the way its exhaustiveness as well as being explicitly specific on the level of the
service expected under the selected category, determines also the physical and
financial requirement of the project. Hence, in effect the contents of project
components to be described below are the derivatives of the requirements mentioned
above.
4.2. Physical appearance
The hotel would have G + 5 building placed on an area of 1500 m 2. The architecture
of the buildings are influenced by the modern design setting holding the characters of
attracting customers from out ward and allowing the maximum comfort it can
provide from service point of view. Apart from the need to add a new look within the
locality, exterior of the building will be dominated by a glass panel at the strategic
corners to provide a maximum opportunity for guest to have, a look at the
important land escape/scenery of the area.
4.3. Core facilities
The envisaged hotel should have sufficient and comfortable space to accommodate
the core services as per the requirements of the three star hotel. Actually this has
been considered seriously at the design stage of the building along with the
allocation of appropriate area and placement of each components with the building
accordingly. On the other hand, it is also important to figure out the layout of each
component not only from the perspective of having compliance for the standard but
for the benefit exploring possibilities of bringing complementary services under the
same location and allow maximum convenience in the work processes.
The sizes (area) of each service, which will be explained below, determine the
holding capacity of guests as it determines the level and quality of service. Other
than the critical factors mentioned above the market aspect i.e. customers need and
resource availability are considered in which case they are the determinants to give
the final set up of the facilities.
(a) Bed rooms

A total of 80 classes are allotted for room services with options to avail two different
types of accommodations. In the interest of following the trend in the industry single
and double bedrooms actually the standard requires allowing maximum 30% from
the total while the rest can remain with big double bed rooms or any other
smaller rooms. On the bases of the above considerations under this component, the
hotel will have 50 single, 20 double and 10 suit king bed rooms
(b) Bars
Standard Five star hotels must have at least one bar with a superior comfort and
service quality. The furniture and equipment’s, as being the basic sources of
customer’s attractions, need to be fashionable of higher quality commensurate with
the expectation of guests who happen to prefer this class. Therefore, the envisaged
hotel, having the requirements considered too, will have one main bar at the ground
floor adjoining the reception area. Another bar preferably with smaller space but
furnished with cozy furniture will be placed at top floor of the building. This is just
to add another attractive look for the hotel as it will be placed at a strategic location
for customer to have a panoramic view of the area. The minimum carrying capacity
of the bars is estimated 200 persons per day.
(c) Main restaurant
Technically a hotel to be classified under Five stars of as such this one must have at
least two dining places having the size proportional to the guests who have
checked in as normally customers do not prefer to worry about going out once they
have settled. The area determination has to take into account this. Hence, the hotel
must provide the maximum range of varieties at all times.

The hotel will have the capacity entertaining 200 guests and allow maximum
efficiency in the service by having the restaurant located nearer to the main kitchen.
(d) Banquet/Conference hall

A hotel with t h r e e stars needs to have a conference/banquet hall of larger area
which can be used for banquet or conference interchangeably. This project considers
this component as the second important function next to the room services as this
area has a higher potential for such services. The holding capacity of the main
conference hall will be 500 persons.
Business center (mini market shop)
A three star hotel needs to have also a business center with the service that would the
customers need. For such a service, the envisaged project will allocate a relatively
bigger area preferably separate rooms at the ground floor. Rooms are allocated to
secretarial service, executive rooms for business meeting and shopping corners. The
secretarial service will be furnished with all the machines and equipment to handle
any business enquiry that may be raised by hotel guests. The shopping corner also
accommodates mini boutique, cosmetics and d/t type of shop
(e) Suppor
ts Kitchen
Two kitchens, with the processes of multiple varieties of food preparation and a
proportional capacity to handle the maximum guests to be served in the main
restaurant as well as in banquet hall, is the critical requirement for the proposed
hotel. It should be large enough also to accommodate the working areas of cold and
hot meals on the one hand and pastries and bakery on the other.
In order to allow reasonable space for workers to move around as well as to avoid
the possibility of contamination and spoilage, the pastries and bakery will be placed
at the nearest door joining the main buffet at the gate of the restaurant. On the other
hand, the kitchen should be provided with a space to add a small store with a
flexible structure to contain butchery and cold rooms. These are critical for easy
facilitation of cooking’s. Moreover, the kitchen will have a well-connected washing
corner with at most margin of clearance to make the area safe and clean.
Power House
For the service of the hotel to continue uninterrupted, a power house is already
planned to be placed in the underground or back to the building. Hence, the power
house will be supplied with a generator r planned to be fixed for emergency service.
Store
Alike the capacity projection made on the kitchen, the envisaged project requires a
store as big as the varieties of items that are needed to be kept as stock. The store
will need to have a systematic management for stocks properly placed and identified
at the time of delivery and inventory. Hence, it is the required procedure to organize
the stock items in separate sections so that the proper handling of stocks shall be
maintained. In view of this, the hotel requires a number of stores with sections for
food items, beverage, glass wares, silver wares, soft furnishings, cleaning and
sanitary materials, stationery materials all placed according to their physical
appearances. The store will be placed in locations nearer to kitchen or leisure service.
Car Parking
The hotel must provide the service of car parking with 24 hours protection at least
for those customers who have checked in. Again, it should be large enough to
accommodate as many vehicles as the hotel is going to entertain a large crowd. In
view of this, a parking space for about 17 vehicles is planned to be allocated with the
standard width and height of the drive in routes.
4.4. Hotel Furniture and Equipment’s
Furniture and equipment required to furnish the envisaged hotel depend on the space
to be available as well as on the quality and volume of service to be rendered.
Normally the quantity required will also depend on the standard of the hotel i.e. Five
star hotel. To the extent that the engineering design of the building align with the
requirements of the standard, the projection of furniture and equipment’s has to be
consistent with the size and number of rooms, bars, restaurants and leisure
center. However, one has to be realistic in the sense that the forecasting trend to link
with the technical feasibility particularly with that of the envisaged service capacity.
Moreover, the balance to be between image building and income generation capacity
has the same level of influence as said above.
Therefore, for this particular category of forecasting two levels of considerations are

taken into account. One, by the fact that the design of building directly determines
the space available for every item, size will be governed by this and again the
quality required furniture will determine base on the kinds of facilities available. In
any case the required quantities are forecasted based on the components stated
below:
 80bed rooms,
o 10 king size luxury bed rooms
o 20 standard Double bedrooms
o 50 standard Single bed rooms
 Special Bar and cafeteria
 Traditional and international restaurant
 conference rooms,
 Massage room
 Sauna and steam bath room
 Physical fitness room
 Night club (dancing area)
 Indoor and outdoor game facilities,
 Management office and store,
 Other civil works including land escaping, parking area, fountains and inter
campus paving.
Secondly, in order to fulfill the basic requirements of hotel service, the quantities
forecasted for the above facilities have to be reviewed against the national standard.
Such consideration gives the benefit of consciously sorting out what item goes with
what kind of facility or service. Once this is determined the forecast of quantity will
follow accordingly. The project detail design work has already been undertaken and
the planned facilities of the project and the required quantities are forecasted in
section 5.
4.5. Inputs/ raw materials and utilities
The annual cost and list of raw materials are indicated in Table 7
Table 7 ANNUAL MATERIALS AND CONSUMABLE REQUIREMENT AT FULL
SERVICE CAPACITY
Sr. No. Description Unit of Measure Qty. Total Cost (000)

Birr
I Sauna /steam bath
1.1 Set of towels Set 600 180
1.2 Gripping plastic floor mat Pcs 50 5000
1.3 Head cover Pcs 1000 200
1.4 Sauna oil scent (115 ml) Bottle
1.5 Eucalyptus fragrance aroma Bottle 1500 225
1.6 Cedar fragrance aroma Bottle 1000 150
1.7 Winter green fragrance aroma Bottle 1000 150
1.8 Menthol fragrance aroma Bottle 1000 150
1.9 Sauna soap (200 pcs/pkt)
1.10 Pine scent Pkt 200 400
1.11 Birch scent Pkt 200 400
1.12 Sauna brush with long handle Pcs 100 20
1.13 Sauna head & back rests Set 80 4
1.14 Sauna sponges Pcs 500 25
Sub-Total 1706.5
II Massage
2.1 Bolsters pillows and supports Set 3 6
2.2 Multi purposes massage cream Lump sum 10
(assorted size)
2.3 Massage oil (assorted size) Lump sum 10
2.4 Massage gels (Assorted size) Lump sum 10
2.5 Linens & covers (Assorted size Lump sum 5
Sub-Total 41
III Laundry Center
3.1 Cleaning Agent (Assorted) Lump sum 80
3.2 Swing thread (Assorted) Lump sum 0.2
Sub-Total 80.2
V Multipurpose Assembly Hall
4.1 Instrumental Audio CD (Assorted) Lump sum 5
4.2 CD-cleaner 0.15
Sub-Total 5.15
V Modern & Traditional Restaurant, Bar
and coffee shop
5.1 Food ( 35% of revenue) 142
5.2 Beverage ( 35% of revenue) 123
Sub-Total 265
VI Swimming Pool
6.1 Toilet soap Pcs 40

6.2 Cleaning agent (Assorted) Lump sum 70
Sub-Total 110
VII Other miscellaneous items 50
Sub-Total 50
Grand Total
30,057.85
B. UTILITIES
The utilities required for the service provision are electricity for lighting, for
running of facility and equipment, and cold water for all services available,
gardening, drinking, etc. The hotel also needs telephone for both local and
international communication including Internet service and LPG gas for various
kitchens, diesel and petrol fuel for diesel generators and for running vehicles.
Based on past trends of utilities consumption by the existing facilities of similar
hotels, the annual requirement of utilities by the envisaged international tourist
standard hotel is estimated at Birr 775444. The details of the utilities required
with their corresponding annual cost are shown in Table 8.
Table 8 UTILITIES REQUIREMENT AND COST
Description Qty. Cost ('00Birr)
Electricity, kWh 400,000 189,44
Water, m3 200,000 650,00
LPG, lt 1,000 15,000
Diesel, lt 100,000 690,000
Total 775,444
C. TECHNOLOGY AND ENGINEERING

A. TECHNOLOGY
1. Service Process
a) Bedroom
The hotel will have bedrooms and will offer versatile services
and facilities of the total 80 rooms, 25 will be double rooms,
50single rooms and 5 suits.
Bedrooms will be more spacious allowing ample and generous
ease of movement, comfort and relaxation for guests. Among

the features of the guest rooms the major ones are:
Rooms of excellent quality smoking and non- smoking, and
with luxurious standard of furniture, wall coverings quality
paintings and excellent quality floors,
Wares and fittings,
Bar and Restaurant
 Bar
The bar will provide in-house and terrace food and beverage
services .Its total capacity is estimated to be 60 persons at a
time.
 Restaurant
Two restaurants one modern and the other traditional with a
capacity of 200 at a time each will be established. The
restaurants will basically serve breakfast, lunch and dinner by
providing daily menu, weekly buffet, and other choices of
customers.
 Coffee Shop
A small - cozy coffee shop will be established with a capacity of 10- 15
seats
b) Multipurpose Assembly Hall
The proposed capacity of multi-purpose assembly hall is 715 seats. The
hall is planned to accommodate and serve multiple purposes. It can be
used for multi-purpose activities by rearranging of seats and adding
appropriate facilities on time and site. The hotel has various options to
use available rooms such as for conventions, wedding services, training,
workshops, and others other public gatherings.
c) Gymnasium
The envisaged gymnasium will composed of one machine room (200sq.
mt), one Aerobics studio (100 sq. mt)
d) Laundry Center
The laundry center provides in-house cleaning service to bed room, and
sauna/stem bathrooms by providing clean towels, linens, covers and
uniform of the employees with the required time and quantity. The main
processes of laundry center are sewing (if any), washing, and squeezing
drying, folding and pressing.
The laundry center will have a daily capacity of providing 200 clean sets
of towels, 300 sets of linen and cover 100 sets of uniforms and other
miscellaneous items.
e) Swimming Pool
A swimming pool of having bigger size (50 m long x 25 m width x 1 m to 4
m slopping depth) for male and female and small size (20m long x 10 m
width x 30 cm to 80 cm slopping depth) for children shall be constructed.
The swimming pool service will be provided to customer from guest room
or from outside. Lockers are provided for customers for clothing and
other belongings. The lockers require a coin to be inserted as deposit or
payment. Showers are also ready for customers (male and female), before
and after swimming. Other service requirements (deserts, hot and cold
drinks) are also provided to customers
f) Children’s Play Ground
The facilities included in the children’s playground are swings, sliding
stands, tunnels, merry go round, sand filled pits, and coin operated toy
vehicles and different kinds of arcade video games. The whole area of the
playground shall be free from any obstruction that could result in
accident and the recreational tools are installed in such a way that they
will not cause any accident. The arcade coin operated video game room
having an area of about 100 m2 will be constructed from prefabricated
material with ventilation and lighting, and it will be carpeted. It should
also be free from any visible electrical connections and free from an
accident or hazard.
The provision of such service doesn't have any adverse impact on
environment.
A. Source of Technology
The technical data has been complied by visiting the existing
international hotels with in Addis Ababa and discussion with various
professionals in similar fields and review of technical documents about
the international tourist standard hotels.
B. ENGINEERING
Machinery and Equipment
The total cost of machineries, equipment, articles and accessories
required by the envisaged hotel is estimated at Birr 20, 100,000. The
complete list of machinery and equipment together with estimated cost
are shown in Table 9
Table 9 MACHINERY AND EQUIPMENT REQUIRED AND COST

Sr. Unit Total Price
Description Qty Unit
No. of (Birr)
Measu Price
re (Birr)
1 Bed rooms
1.1 Foldable Rest chair Pcs 20 1000 20,000
1.2 Foldable rest bed Pcs 14 800 11,200
Wall mirror (1x 1.5mt), Supply and
1.3 Pcs 18 800 14,400
Installation
1.4 Sofa Guest chair (Three seat) Pcs 20 15,000 300,000
1.5 Wardrobe with coat hungers Pcs 14 1,500 21,000
1.6 Receptionist table, Pcs 2 1,200 2,400
1.7 Swivel chair Pcs 2 810 1,620
Satellite dish with Color TV 21" &
1.8 Set 1 20,000 20,000
antenna
1.9 Public addressing system Set 1 5,000 5,000
1.1 Wall watch Pcs 1 500 500
Sub-
396,120
Total
2 Laundry center 0
Laundry center (Supply and
2.1 LOT 1 300,000 300,000
Installation) comprising of
Sub-
300,000
Total
3 Sauna and Steam bath 0
3.1 Sauna Electric heater Pcs 8 10,000 80,000
3.2 Sauna bucket, wooden 4 lt. Pcs 8 10000 80,000
Sauna Ladle (Dipper), Wood,
3.3 Pcs 8 30000 240,000
Birch, 381mm Long
Sauna thermometer Wood, Shows

3.4 Pcs 10 5000 50,000
ºF and ºC, 140mm Square
3.5 Electronic sauna timer 90 Minute Pcs 10 200 2,000
3.6 Sauna hygrometer Pcs 8 800 6,400

3.7 Steam generator Pcs 1 30,000 30,000

3.8 Clothe hunger (Peg rack) Pcs 10 150 1,500
3.11 Pcs 12 350 4,200
Installation
3.12 Sofa Guest chair (Three seat) Pcs 20 3,500 70,000
Wall mounted Lockers, supply and
3.13 Pcs 10 1,500 15,000
installation, 10 lockers in
One 0
3.14 Receptionist table, Single pedestal Pcs 1 1,200 1,200
3.15 Swivel chair Pcs 1 810 810
3.16 Set 1 20,000 20,000
antenna
3.17 Public addressing system Set 1 5,000 5,000
3.18 Wall watch Pcs 1 100 100
Sub-Total 0
4 Physiotherapy 0
Infrared heaters, for facial
4.1 Pcs 6 10,000 60,000
treatment
4.2 Aerobics 0
Public addressing system (supply
4.2.1 Set 1 15,000 15,000
and installation)
4.2.2 Aerobics dumbbell Set 5 2,000 10,000
4.2.3 Stepping rocks (assorted) set 100 150 15,000
Wall mounted mirror (supply and
4.2.4 m2 30 150 4,500
installation)
4.3 Physical fitness (Machine) 0
4.3.1 Bike protus pcs 3 50,000 150,000
4.3.2 Track tread mills (electrical) pcs 1 50,000 50,000
4.3.3 Track tread mills (manual) pcs 2 25,000 50,000
Heart rate monitors and
4.3.4 pcs 3 1,000 3,000
pedometers
4.3.5 Body solid endurance up right pcs 1 50,000 50,000
4.3.6 Muscular dynamics pcs 1 12,000 12,000
4.3.7 Simplex II series pcs 1 14,000 14,000
4.4 Massage 0
Portable massage table with tools
4.4.1 pcs 1 100,000 100,000
and accessories
4.4.2 Massage bodywork tools Set 2 20,000 40,000
Massage chair with tools &
4.4.3 pcs 1 50,000 50,000
accessories
4.4.4 Massage store heater Set 1 1,000 1,000
Massage table electric warming
4.4.5 pcs 2 2,000 4,000
pad
4.4.6 Fleece massage table pad pcs 1 500 500
4.4.7 Massage music and video kit Set 1 5,000 5,000

4.4.8 Pillows/body support/ back care Set 2 4,000 8,000
4.4.9 Cleaner and sanitizers Set 2 2,000 4,000

4.4.10 Pcs 5 350 1,750
Installation
4.4.11 Sofa Guest chair (Three seat) Pcs 20 3,500 70,000
4.4.12 Pcs 30 1,500 45,000
One 0
4.4.13 Receptionist table, Pcs 2 1,200 2,400
4.4.14 Swivel chair Pcs 2 1,620 3,240
4.4.15 Set 2 5,000 10,000
antenna
4.4.16 Public addressing system Set 2 5,000 10,000
4.4.17 Wall watch Pcs 2 100 200
Sub-
1,407,800
total
5 Multi-Purpose Assembly Hall 0
Foldable sofa chair supply and
5.1 Pcs 715 400 286,000
installation
5.2 Guest chair with arm seat Pcs 10 400 4,000
Laminated conference table
5.3 Pcs 2 1,850 3,700
(200x100x175)
Window curtain, Valance type
5.4 Sq.Mt. 645 250 161,250
(supply and installation)
Stage lighting (decorative quartz
5.6 Set 1 8,000 8,000
flood lights and spot lights)
(assorted) 0
5.7 Multimedia projector Unit 1 35,000 35,000
5.8 LCD projector Pcs 1 22,000 22,000
5.9 Overhead projector Pcs 1 3,000 3,000
Projector screen with portable
5.1 Pcs 1 2,500 2,500
tripod (250x250)
Wall mounted projector screen
5.11 Pcs 1 5,000 5,000
(300-350x300-350)
Public Addressing System,
5.12 Lot 1 77,000 77,000
Auditoria type (supply &
Installation) 0
5.13 Sink with two bay(for the kitchen) Pcs 1 500 500
Multimedia service (Supply and
installation) comprising 20 brand
desktop computers with
accessories, 17” monitor (20
5.14 nodes), Server Network Lot 1 350,000 350,000
accessories (Terminals, patch
cords, patch panels,
switches/hubs, cables, cable trays,
etc) Tele broad

band service line etc. 0
Heavy duty & color photocopy
5.15 Pcs 1 250,000 250,000
machine
5.16 Binding machine Pcs 2 3,500 7,000
5.17 Laminating machine Pcs 1 3,000 3,000
5.18 Pcs 1 250,000 250,000
machine
Kitchen working table with
5.19 Pcs 2 3,000 6,000
drawers, 3m x90cm
5.2 Kitchen cabinet Pcs 2 1,500 3,000
Cabinet for coffee, tea cups,
5.21 Pcs 2 2,000 4,000
spoons etc
Sink with two bay for washing tea
5.22 Pcs 1 500 500
and coffee cups, draft
glasses, water glasses etc 0
Digital satellite dish with all
5.23 Pcs 1 5,000 5,000
accessories
Steel legged adjustable height
5.24 Pcs 10 450 4,500
chairs around the balcony
5.25 Plastic chair Pcs 200 500 100,000
5.26 Oval shaped plastic table Pcs 50 800 40,000
5.27 Umbrella Pcs 20 400 8,000
5.28 Presidential desk 75x32x100cm) Pcs 1 15,000 15,000
5.29 Law back swivel chair Pcs 1 5,000 5,000

Laminated conference table
5.3 Pcs 1 8,000 8,000
(200x100x175 cm)
5.32 Sofa guest chair with arm seat Pcs 8 10,000 80,000
5.33 Oval coffee table Pcs 1 5000 5,000
5.15 Pcs 1 250,000 250,000
machine
5.16 Binding machine Pcs 2 10,000 20,000
5.17 Laminating machine Pcs 1 3,000 3,000
5.18 Pcs 1 250,000 250,000
machine
Kitchen working table with
5.19 Pcs 2 15,000 30,000
drawers, 3m x90cm
5.2 Kitchen cabinet Pcs 2 25,000 50,000
Cabinet for coffee, tea cups,
5.21 Pcs 2 2,000 4,000
spoons etc
Sink with two bay for washing tea
5.22 Pcs 1 500 500
and coffee cups, draft
glasses, water glasses etc 0
Digital satellite dish with all
5.23 Pcs 1 5,000 5,000
accessories

Steel legged adjustable height
5.24 Pcs 10 450 4,500
chairs around the balcony
5.27 Umbrella Pcs 20 400 8,000
Open shelf and sliding door office
5.34 Pcs 1 20,000 20,000
cabinet
5.35 Open book shelf (151x78x35) Pcs 1 20,000 20,000
Wooden filling cabinet, four
5.36 Pcs 1 15,000 15,000
drawers
5.37 Coat hunger Pcs 6 320 1,920
5.38 Executive sec. Desk and chair Set 1 10000 10,000
5.39 Office desk (140x75x75) Pcs 1 923 923
5.4 Arc joint table (75x75) Pcs 1 263 263
5.41 Computer table (90x75x75) Pcs 1 1,352 1,352
5.42 Mobile drawer Pcs 1 750 750
5.43 Swivel chair Pcs 1 810 810
5.44 Sofa Guest chair Set 1 250000 250,000
5.45 One seat Pcs 1 25,000 25,000
5.46 Two seats Pcs 1 30,000 30,000
5.47 Three seats Pcs 1 35,000 35,000
5.48 Oval coffee table Pcs 1 690 690
5.49 Filling cabinet, four drawers Pcs 22 5,000 110,000
5.5 Metallic storage cabinet Pcs 1 20,000 20,000
Office desk (180x75) with mobile 3
5.51 Pcs 7 1,833 12,831
drawers
5.52 Managerial chair, high back Pcs 7 5000 35,000
5.54 Wooden office shelf (165x30x180) Pcs 12 1,820 21,840
5.55 Coffee table (100x50x50) Pcs 13 450 5,850

Open shelf office cabinet with
5.56 Pcs 6 1,800 10,800
drawer shelf office cabinet,
Metallic 0
Metallic L-shape secretarial desk
5.57 Pcs 6 2,192 13,152
(150x75x75)
5.58 Secretary swivel chair Pcs 6 800 4,800
Office desk (120x80) with mobile 3
5.59 Pcs 13 1,109 14,417
drawers
5.6 Guest chair Pcs 26 250 6,500
5.61 Open wooden shelf Pcs 13 1,109 14,417
5.62 Office desk w/o pedestal Pcs 12 845 10,140
5.63 Chair with arm seat Pcs 12 200 2,400
5.64 Metallic storage cabinet, slide Pcs 4 1,347 5,388
5.65 Dixon shelf (250x100x50) Pcs 8 600 4,800
5.66 Meeting room chairs with arm seat Pcs 40 300 12,000

5.67 Meeting room table (200x100x125) Pcs 2 600 1,200
5.68 White board (200x150) Pcs 1 350 350
5.69 Cash safe box Pcs 1 3,400 3,400
5.7 Brand desktop computer Set 10 9700 97,000
5.71 Laser jet printer Pcs 7 3,250 22,750
Fax machine (with scanner &
5.72 Pcs 1 3,000 3,000
copy)
5.73 Electronic type writer Pcs 1 2,500 2,500
5.74 Photocopy machine Pcs 1 12,750 12,750
5.75 Carpet, woolen strip (160x230cm) Pcs 1 2,500 2,500
5.76 Carpet, woolen strip (160x230cm) Pcs 1 2,500 2,500

Window curtain, Blind vertical
5.77 Sq. Mt 105 200 21,000
fabric 1st grade (Supply and
installation) 0
Floor carpet (Supply and
5.78 Sq. Mt. 32 250 8,000
installation)
Floor carpet (Supply and
5.79 Sq. Mt. 178 150 26,700
installation)
Window curtain, Blind vertical
5.8 Sq. Mt 105 200 21,000
fabric 1st grade (Sup and inst.)
5.81 Coffee machine 2olt. Pcs 1 20,000 20,000
5.82 Water glass Set 20 20 400
5.83 Coffee cups with saucer Set 20 100 2,000
5.84 Tea cups w/saucer Set 20 50 1,000
5.85 Butter plate Pcs 2 150 300
5.86 Bread plate Pcs 30 20 600
5.87 Sugar dispenser size 6 Pcs 20 25 500
5.88 Juice glass Set 20 50 1,000
5.89 Tea spoon Pcs 50 1 50
5.9 Coffee spoon Pcs 50 1 50
5.91 Juice strainer pcs 2 120 240
5.92 Oil & vinegar holder Set 22 20 440
5.93 Kitchen knife Set 3 150 450
5.94 Refrigerator, 240 lt Pcs 1 5,000 5,000
5.95 Deepfreeze 500lt Pcs 1 10,000 10,000
Gas burner with cylinder,
5.96 12kg,two gas and two electric Pcs 2 4,000 8,000
stoves
5.97 Frying pans Set 4 200 800
5.98 Dishes with two handle Set 4 500 2,000
5.99 Pressure cooker (1 up to5 bars) Set 3 1,500 4,500
Medical Equipment, tools,
5.1 Lump 5 500,000 2,500,000
instruments and furniture for the
Clinic sum 0 0
Sub 6,054,213

Total
6 Swimming Pool 0
6.1 Pcs 20 1,500 30,000
One 0
6.4 Lawnmower Pcs 2 2,000 4,000
6.5 Chemical mixing tank, Pcs 1 3,000 3,000
Chemical dosing pump, supply and
6.6 Pcs 2 5,000 10,000
installation
6.7 Coffee machine 10 lt Pcs 1 8,000 8,000
6.1 Umbrella Pcs 10 400 4,000
6.12 Tea spoon Pcs 50 50 2,500
6.13 Coffee spoon Pcs 50 50 2,500
6.19 Ice cream box Pcs 1 5,000 5,000
Sub
122,440
Total
7 Park and Recreation Center 0
7.1 Lawnmower Pcs 5 2,000 10,000
7.2 Wheelbarrow Pcs 10 400 4,000
7.3 Metal Scrapper (fork) Pcs 10 40 400
7.4 Coffee machine 10 lt Pcs 1 15,000 15,000
7.7 Umbrella Pcs 10 400 4,000
7.9 Tea spoon Pcs 50 1 50
7.1 Coffee spoon Pcs 50 1 50
7.16 Ice cream box Pcs 1 5,000 5,000
7.17 Water sprinklers Pcs 30 40 1,200
Water hose nylon rope reinforced
7.18 Pcs 4 250 1,000
25.4 mm dia, 36 mt length

with clamp 0
7.19 Gardener kit Set 2 2000 4,000
7.2 Children Play ground 0
Two chain rope swing with steel sit
7.21 Set 1 5,000 5,000
and stand
Plastic made Slide and hide tower
7.22 Set 2 5,000 10,000
(2-8 years)
15ft x 42 in. plastic made play
7.23 Set 1 5,000 5,000
tunnel
7.24 Merry-go-round (made of steel) Set 1 10,000 10,000
7.25 See-saw (made of steel) Set 1 5,000 5,000
7.26 Sand filled pits, 5m2 Set 3 10000 30,000
7.27 Coin operated toy vehicles Set 2 25,000 50,000
Coin operated video game
7.28 Set 6 45,000 270,000
machines (different type)
Sub
463,340
Total
8 GUEST ROOMS 0
8.1 BED ROOMS Pcs 0
Bed sets - queen size, 2 by 1.90
8.2 Pcs 6 25,000 150,000
m(for 3 suite rooms)
Bed sets – single, 1.20 * 1.90m
8.3 Pcs 48 20,000 960,000
( for 24 double/twin rooms)
8.4 Bed -2*1.90 Pcs 6 30,000 180,000
8.5 Bed-1.2*1.90 Pcs 48 25,000 1,200,000
Bed side armoires-wood with 2
8.6 Pcs 54 5000 270,000
chest drawers
Sofa- single seat upholstery 2 for
8.7 Pcs 54 3500 189,000
each room
8.8 Coffee table- round glass top Pcs 30 5000 150,000
8.9 Chair- wooden Pcs 30 500 15,000
Writing table- wooden with 4 chest
8.1 Pcs 30 2500 75,000
drawers
8.11 Luggage rack- movable & flexible Pcs 30 250 7,500
Wardrobe – wooden built-in with

8.12 Pcs 30 2500 75,000
partitions
8.13 TV set – 14 inches , flat screen Pcs 30 15,000 450,000
8.14 Telephone Pcs 30 1,200 36,000
8.15 Bath Pcs 30 5,000 150,000
8.16 Shower Pcs 30 1000 30,000
8.17 Toilet seat Pcs 30 10000 300,000
8.18 Washing basin Pcs 30 10000 300,000
8.19 Mirror Pcs 30 185 5,550
Sub
4,543,050
total
9 MODERN RESTAURANT Pcs 0

9.1 Tables- round Pcs 80 5000 400,000
9.2 Chairs Pcs 200 2500 500,000
9.3 Side service tables Pcs 5 2500 12,500
9.4 Service trolleys Pcs 2 380 760
9.5 Cupboards Pcs 2 420 840
9.6 Main dish Plate with rim- 20 cm Pcs 200 46 9,200
9.7 Soup cup with saucer Pcs 80 32 2,560

9.8 Salad plate Pcs 200 150 30,000
9.9 Bread plate Pcs 50 250 12,500
9.1 Salt & pepper –set Pcs 50 70 3,500
9.11 Butter holder/dish Pcs 50 80 4,000
9.12 Coffee cup with saucer Pcs 80 22 1,760
9.13 Tea cup with saucer Pcs 80 100 8,000
9.14 Soup spoon Pcs 80 100 8,000
9.15 Main dish knife Pcs 300 200 60,000
9.16 Forks Pcs 300 50 15,000
9.17 Salad knife Pcs 200 100 20,000
9.18 Dessert bowl Pcs 200 120 24,000
9.19 Water glass Pcs 200 80 16,000
9.2 Red wine glass Pcs 50 150 7,500
9.21 White wine glass Pcs 50 150 7,500
9.22 Champagne glass Pcs 30 100 3,000
9.23 Liqueur glass Pcs 200 150 30,000
9.24 Cocktail glass Pcs 30 100 3,000
9.25 Beer glass Pcs 120 80 9,600
9.26 Wine cooler with stand Pcs 4 206 824
9.27 Ashtray Pcs 50 250 12,500
9.28 Cash register Pcs 1 5,000 5,000
9.29 Wine storage shelf Pcs 1 80,000 80,000
Sub
1,287,544
total
10 BAR Pcs 0
10.1 Tables Pcs 40 5000 200,000
10.2 Chairs Pcs 70 2500 175,000
10.3 Bar counter Pcs 1 3,650 3,650
10.4 Beverage shelve/ cupboard Pcs 1 100,000 100,000
10.5 Bar stool (counter chairs) Pcs 20 500 10,000
10.6 Bar coffee machine Pcs 1 6,450 6,450
10.7 Mixer & Juicer Pcs 1 5000 5,000
10.8 Beverage dispenser Pcs 1 1,300 1,300
10.9 Water glass Pcs 40 26 1,040
10.1 White wine glass Pcs 20 28 560
10.11 Red wine glass Pcs 20 28 560
10.12 Wine cooler Pcs 2 206 412

10.13 Ice bucket Pcs 1 54 54
10.15 Ashtray Pcs 40 250 10,000
Sub
521,526
total
11 Traditional Restaurant Pcs 0
11.1 Short-leg traditional chair Pcs 120 2500 300,000
11.2 Short-leg traditional table Pcs 30 1,714 51,420
Traditional sofa – set (3,2,1 seats
11.3 Pcs 10 15,000 150,000
with table)
11.4 Traditional lamp shed- big size Pcs 4 860 3,440
11.5 Traditional ordinary stool Pcs 20 86 1,720
11.6 Food & beverage serving trays Pcs 10 32 320
11.7 Sauce (wet) preparing pot- big size Pcs 5 325 1,625
11.8 Sauce “ “ - medium size Pcs 3 210 630

11.9 Sauce “ “ - small size Pcs 6 130 780
11.1 Refrigerator - Pcs 2 8,400 16,800
11.11 Counter with shelve and drawers Pcs 1 12,100 12,100

11.13 Washing basin unit Pcs 1 2,600 2,600
Sub
545,125
total
12 COFEE SHOP Pcs 0
Coffee shop counter unit- custom
12.1 Pcs 1 20,000 20,000
built
12.2 Coffee machine Pcs 1 25,000 25,000
12.3 Long-leg counter stool Pcs 5 190 950
12.4 Chair with coffee table (set) Pcs 2 10,000 20,000
12.5 Coffee cup with saucer Pcs 30 200 6,000
12.6 Tea cup with saucer Pcs 20 500 10,000
12.7 Sugar holder (for all outlets) Pcs 12 200 2,400
Sub
84,350
total
13 KITCHEN 0
Electrical & gas grill with six
13.1 Pcs 1 100,000 100,000
burners
13.2 Microwave oven-20nos Pcs 1 50,000 50,000
13.3 Salamander Pcs 1 50,000 50,000
13.4 Deep fryer Pcs 1 18,400 18,400
13.5 Mixer Pcs 1 15,000 15,000
13.6 Silcer Pcs 1 4,300 4,300
13.7 Hot – water bath ( bain maire) Pcs 1 25,000 25,000
13.8 Freezer Pcs 1 100,000 100,000
13.9 Stock pot(50 liters) Pcs 4 10,000 40,000
13.1 Sauce pan Pcs 3 10,000 30,000

13.11 Sauce pot(50 liters) Pcs 5 10,000 50,000
13.12 Boiler( 30 liters) Pcs 4 50,000 200,000
Sub
682,700
total
13.13 Baking pan Pcs 3 1,710 5,130
13.14 Roasting pan Pcs 5 1,710 8,550
13.15 Scale(portion) Pcs 1 1,000 1,000
13.16 Scale Pcs 1 3,200 3,200
13.17 Measuring spoons Pcs 2 5,140 10,280
13.18 Chef’s Knife (10 in.) Pcs 5 310 1,550
13.19 Salad knife (6 in.) Pcs 2 240 480
13.2 Vegetable knife (2in.) Pcs 3 240 720
13.21 Boning (6in.) Pcs 4 240 960
13.22 Slicer knife (12in.) Pcs 2 240 480
13.23 Bucher’s knife(12in.) Pcs 2 240 480
13.24 Cleaver (4in.) Pcs 1 240 240
13.25 Vegetable peeler (set) Pcs 1 85 85
13.26 Cutting Board – hard rubber Pcs 4 310 1,240
13.27 Pastry wheel Pcs 1 105 105
13.28 Kitchen spoon ( perforated) Pcs 2 176 352
13.29 Kitchen spoon( solid) Pcs 5 176 880
13.3 Skimmer (long) Pcs 2 208 416
13.31 Tongs (long) Pcs 2 126 252
13.32 Grater (normal size) Pcs 1 132 132
13.33 Strainer Pcs 2 182 364
13.34 Can opener Pcs 1 190 190
Kitchen counter top, with
13.35 Pcs 1 5,700 5,700
cupboard unit
13.36 Sink unit (900 / 1600mm) Pcs 1 4,910 4,910
13.37 Wall attached shelves Pcs 2 3,500 7,000
Refrigerator (self-contained)-
13.38 Pcs 2 35,000 70,000
1500lt
13.39 Hot cupboard (warmer) Pcs 2 5,000 10,000
13.4 Toaster Pcs 1 850 850
13.41 Ice cream machine Pcs 1 15,000 15,000
13.42 Ice cube machine Pcs 1 4,940 4,940
13.43 Dishwashing machine Pcs 1 50,000 50,000
Sub-
205,486
Total
14 HOUSEKEEPING Pcs
14.1 Cleaning trolley Pcs 3 2,450 7,350
Supplies and linen storage shelf
14.2 Pcs 1 3,712 3,712
unit
Wet and dry floor cleaning
14.3 Pcs 2 2,710 5,420
machine
14.4 Vacuum cleaner (upright) Pcs 3 5,000 15,000

14.5 Mop trolley with squeezer Pcs 3 35 105
14.6 Buckets big size Pcs 5 82 410
14.7 Buckets small size Pcs 10 71 710
Sub
32,707
Total
Stand By Generator Set With 3,500,00
15 Unit 1 3453599
Canopy And 0
Accessories(100KVA)
Sub
3453599
Total
Grand Total
20,100,000
C. Land, Building and Civil Works

Land requirement by the envisaged hotel is estimated at 1500 m2. The hotel
floor area is estimated to cover 1000 m2 and the remaining 500m2 is left for
construction of, generator house, guard house, parking lot, children play
ground, swimming pool garden, shops and walk ways. The type of buildings
and its corresponding civil construction cost is given on Table 10.
Table 10 TYPE OF CONSTRUCTION AND ITS RATE (BIRR/m2)
Sr. No.Building Total Rate per m2 Total cost (Birr)
Area (m2) (Birr)

1Hotel building 1,000 19,500 19,500,000
2Swimming pool, park and 500 16000 8,000,000
recreation center,
walk ways etc
Total 1500M2 27,500,000 .00
As shown on Table 10, the total cost of building and civil work is estimated at
Birr 27,500,000 According to the Federal Legislation on the Lease
Holding of Urban Land (Proclamation No 272/2002) in principle, urban land
permit by lease is on auction or negotiation basis, however, the time and
condition of applying the proclamation shall be determined by the

concerned regional or city governments depending on the level of
development.
Moreover, advance payment of lease based on the type of investment ranges
from 5% to 10%. For those that pay the entire amount of the lease will
receive 0.5% discount from the total lease value and those that pay in
installments will be charged interest based on the prevailing interest rate of
banks. Moreover, based on the type of investment, two to seven years grace
period shall also be provided. The lease price is payable after the grace
period annually.
Regarding, the terms and conditions of land lease the South Ethiopia
Government have adopted Article 6 of the Federal Legislation with very
minimal changes. Therefore, for the purpose of this project profile since the
project is engaged in social service, 99 years lease period, 50 years lease
payment completion period, 5% down payment and seven years grace period
is used.
Accordingly, the land lease cost of the project, at rate of Birr 30 per m2 for 99
years of holding is estimated at Birr 27.37 million. Assuming 5% of the total
cost (Birr 6.37) will be paid in advance as down payment and the remaining
Birr 21 million will be paid in equal installments within 50 years, the annual
lease payment is estimated at Birr 120,095.
4.6. Environmental impact assessment
The project will seriously involve itself protecting conserving and developing the
natural and flora of the project area in line with the millennium development goal.
To this to will play a vital role in participating the varies organization and the
community around the project area to from an environmental commute in charge of
all environmental issues to be handled in accordance to varies environmental and
water policies of 97/99.
The owner of the project believes to undertake several environmental issues for the
conservation development and creation of sustainable environmental around the
project area.

4.7. Implementation Schedule
The actual implementation of the International 3 star hotel is planned to begin on the
August 2024. The major activities envisaged are processing of land preparation,
construction and delivery, installation and commissioning of the factory line.
Undertaking of civil design works and execution of construction works which will be
carried out by side which opening and processing of L/C will take 3 months. The
FOB delivery of plant machinery and equipment will take 4 months. Allowing
additional one month for sea freight and clearing, the delivery of plant of project site
and thus commencement of installation work requires 5 month. Plant installation and
commissioning will take place for 4 months.
The provision of infrastructural facilities such as Electric Power and water will be
carried out in the course of project implementation schedule. Other activities such us
man power recruitment and training, system development, and procurement of raw
and other supplies will also be duty performed to ensure that everything is in place
by the time the plant is ready for operation. All in all the project is expected to
take 12 months for completion as per the below detailed implementation schedule.
Table 11. Implementation schedule

(Months) in Gregorian Calendar
Description
June
May
Dec
Mar
Apri
Feb
July
sep
No
oct
Au
Ja
Opening & Processing of L/C x x x

Building Construction x x x x x x

Delivery of Plant machinery and x x x x x
Clearing
Installation and Commissioning x x X X
Recruitment of man power x x x x X X
arranging for other works
Customers, timely availability all the week including week end days, customer care,
and quick response to the feedback from clients.

5. ORGANIZATIONS AND MANAGEMENT
5.1. Organizational Structure
The organizational structure of the project is designed by including all the necessary
personal under the right division. At the top of the organizational structure, there will
be a general manager with the responsibility of supervising the overall activity of
plant. Depending up on the nature of the center and the amount of work to be
performs under each will be supervised by the unit head that is accountability for
general manager
CEO
Adviser G/Manager Internal Auditing

& Inspection
Coordinator
Manager/supervis
or
Secretary
Sales & Marketin Admin &

technical g Unit finance
Unit Unit
As clearly shown the organizational structure, the integrated projected center has
CEO three Departments under the general manager, Addition and the internal
Auditing and inspection. The departments are the production Department, the
marketing department and the general service department under each department
there are different section which are undertaking different activities

5.2. Management
As to the management of the project is concerned the owner will be responsible for
the overall project planning, co-ordination and implementation. After project
implementation the promoter serves as a top management body and frequently visits
and supervises the organization.
Cattle fattening farm a business man who has a long year experience in managing
business activities. Therefore, the extensive experience he has enables him to
organize and properly manage the envisaged International 3 star hotel Service.
5.3. Manpower Requirement
For smooth and efficient operation of the organization, it has been

anticipated that each units will have adequate number of qualified and
experienced manpower. The labor component of the International 3 star hotel
Service G/manager will hire qualified and experienced in management whose main
responsibility is to coordinate the overall activity of the project. The distinct units
have their own operational teams under them. To fill in all these work units with the
required manpower the project will provide 120 employees, 80 permanent and 40
casual skilled and unskilled workers. For smooth operation of the project,
employees will be given on job training, clear duties and responsibilities under
the direct supervision of their respective units.

Table 12: Manpower Requirement
Sr. No. Description No. of Persons Monthly Salary Annual Salary
(Birr) (Birr)
I Bed Room
1.1 Bed rooms supervisor 1 2,000 24,000
1.2 Receptionist 3 1,500 18,000
1.3 Casher 3 1,500 18,000
1.4 Cleaner 6 2,100 25,200
1.5 Plumber 1 600 7,200
1.6 Electrician 1 600 7,200
1.7 Guard 3 1,200 14,400
Sub- Total 18 9,500 114,000
II Sauna /steam Bath
2.1 Sauna and Steam bath attendant 4 2,200 26,400
2.2 Cleaner 4 1,400 16,800
Sub –Total 8 3,600 43,200
III Massage
3.1 Massage expert 8 8,000 96,000
3.2 Physiotherapist 2 3,600 43,200
3.3 Receptionist 2 10,000 12,000
3.4 Cleaner 4 1,400 16,800
IV Multipurpose Assembly Hall
4.1 Assembly hall supervisor 1 1, 000 12,000
4.2 Film projector operator 3 2,400 28,000
4.3 Hall attendant 8 4,000 32,000
4.4 Casher 4 2,000 8,000
4.5 Cleaner 20 700 1,400
4.6 Store keeper 2 11,00 2,200
Sub –Total 38 11,200 83,600
V Pastry and Staff Cafeteria
5.1 Cafeteria supervisor 1 1,000 12,000
5.2 Waiter 12 4,800 57,600
5.3 Cook 6 3,000 36,000
5.4 Coffee machine operator 2 1,000 12,000
5.5 Cleaner 6 2,100 25,200
5.6 Pastry attendant 2 900 10,800
Sub- Total 29 12,800 153,600
VI Modern Hotel and
Traditional Restaurant

6.1 Supervisor 1 1,500 18,000
6.2 Purchaser 1 700 8,400
6.3 Driver 2 900 10,800
6.4 Cook 10 7,000 84,000
6.5 Waiter 40 20,000 240,000
6.6 Coffee ceremony attendant 4 1,400 16,800
6.7 Cleaner 20 7,000 84,00
Sub –Total 78 38,500 378,000
VII Swimming Pool
7.1 Supervisor 1 900 10,800
7.2 Waiter 10 4,500 54,000
7.4 Dessert attendant 2 900 10,800
7.5 Life saver 4 2,800 33,600
7.6 Cleaner 4 1,400 16,800
7.7 Casher 4 2,000 24,000
7.8 Plumber 1 600 7,200
7.9 Electrician 1 600 7,200
7.10 Gardener 1 350 4,200
7.11 Guard 3 1,200 14,400
Sub –Total 33 16,250 195,000
VIII Park and Recreation Center
8.1 Supervisor 1 900 10,800
8.2 Waiter 6 2,700 32,400
8.4 Dessert attendant 2 900 10,800
8.5 Children play-ground attendant 12 4,800

8.6 Cleaner 4 1,400 16,800
8.7 Casher 2 1,000 12,00
8.8 Gardener 1 350 4,200
8.9 Guard 3 1,200 14,400
Sub- Total 33 14,250 101,400
VIX Guest Room
9.1 Chief receptionist 1 600 7,200
9.2 Receptionist 4 300 3,600
9.3 Porter 5 250 3,000
9.4 Door attendant 2 280 3,360
9.5 Head housekeeper 1 500 6,000
9.6 Guestroom attendant/ cleaner 4 300 3,600
9.7 Public area cleaner 4 250 3,000
9.8 Laundry supervisor 1 400 4,800
9.9 Laundry attendant 6 300 3,600
Sub –Total 28 3,180 38,160
Total 120 54,640 553,480
Employees benefit 27,320 327,840.00
(25% of basic salary)
Grand Total 68,300 717,400
5.4. Training Requirement
Since the machinery and equipment and services are easy to operate, a special
training arrangement is not needed. But operators, chemists, mechanics &
electricians need a two weeks training during erection, commissioning period on the
production process, raw material and product quality and operation and maintenance
of machinery and equipment by the expert of machinery supplier..

6. FINANCIAL ANALYSIS
6.1. FINANCIAL ANALYSIS
The financial analysis of the international / tourist standard hotel project

is based on the data presented in the previous chapters and the following
assumptions:-
Construction period 2 year
Source of finance 40 % equity 60 % loan
Bank interest 15.5%
Discount cash flow 15.5%
Accounts receivable 30 days
Raw material (perishable) 3 days
Raw Material (nonperishable) 30 days
Cash in hand 5 days
Accounts payable 30 days
Repair and maintenance 5% of equipment cost
6.2. TOTAL INITIAL INVESTMENT COST
The total investment cost of the project including working capital is

estimated at Birr 55 million. The major breakdown of the total initial
investment cost is shown in Table 12.
Table 13 INITIAL INVESTMENTS COST (‘000 Birr)
Sr. No. Cost Items Total Cost
1 Land lease value 370,000

2 Pre operation cost 50,000
3 Building and Civil Work 27,500,000
Hotel Equipment and Office
4 20,100,000
Furniture
5 Vehicle 5,000,000
6 Working Capital 1980000
Total 55,000,000

6.3. FINANCIAL STATEMENTS
REVENUE/INCOME STATEMENT of First Year Operation (in 000 Birr)

The source of revenue for this hotel is bead, food and beverages sale.
Table 14. Revenue/Income Statement of First Year Operation (In 000 Birr)
Price Amount of Amount of Annual

Source of Sales Amount of
Quantity per monthly
Revenue daily incomes
unit incomes
incomes
153 Single bed 500 76500 2,295,000.00 27,540,000
50 Double bed 600 30,000 900,000.00 10,800.000.00
Breakfast for 60
35 2,100.00 63,000.00 756,000.00
persons
Restaurant Meal for 60 persons 55 3,300.00 99,000.00 1,188,000.00
Lunch for 48
55 2,640.00 79,200.00 950,400.00
persons
Beverages
Coffee 6 420 12,600.00 151,200.00
for70
Person Tea 4 280 8,400.00 100,800.00
Milk 10 700 21,000.00 252,000.00
Soft drink Juice and other

10 700 21,000.00 252,000.00
for 70 soft drink
Non- Soft
drink for Beers and Alcohols 40 2800 84,000.00 1,008,000.00
70
meeting
3000 124440 5,000,000
hole 3000
Total 1315 243880 3583200 37,198,400
Table: 15 gross revenue collection

Description Year 1 Year 2 Year 3 Year 4 Year 5
Gross 3794236 3870121 39475239.6 4026474
37,198,400
revenue 8 5.4 7 4

EXPENDITURE /OPERATION COST
Table 16 ANNUAL PRODUCTION COST AT FULL CAPACITY ('000 BIRR)
Cost %
Material and Inputs 300,000 18.72
Utilities 780,879.66 12.81
Maintenance and repair 26.12 4.2
Labor direct 244.404 7.14
Labor overheads 47.042 2.97
Administration Costs 573.92 4.76
Land Lease Cost - -
Total Operating Costs 600,000.00 50.54
Depreciation 2,90162.936 26.82
Cost of Finance 379.493.118 22.63
Total Production Cost 1,095.860 100
BANK LOAN PYMENT PERIOD

Bank loan payment completed with10 years
Table 17 ANNUAL LOAN PYMENT Including Interest for BANK Break Down ('000 BIRR)
Principal Interest Total Annual Remaining
Year
Payment (11.5%) Payment in birr Balance
0 0 0 0 38,500,000
1 3,850,000.00 4,427,500.00 8,277,500.00 34,650,000.00
2 3,850,000.00 3,984,750.00 7,834,750.00 30,800,000.00
3 3,850,000.00 3,542,000.00 7,392,000.00 26,950,000.00
4 3,850,000.00 3,099,250.00 6,949,250.00 23,100,000.00
5 3,850,000.00 2,656,500.00 6,506,500.00 19,250,000.00
6 3,850,000.00 2,213,750.00 6,063,750.00 15,400,000.00
7 3,850,000.00 1,771,000.00 5,621,000.00 11,550,000.00
8 3,850,000.00 1,328,250.00 5,178,250.00 7,700,000.00
9 3,850,000.00 885,500.00 4,735,500.00 3,850,000.00
10 3,850,000.00 442,750.00 4,292,750.00 0.00

Table: 18 Profit and loss statement of the project
Description Year 1 Year 2 Year 3 Year 4 Year 5
Gross revenue 37,198,400 37942368 38701215.3 39475239.67 40264744.46
6
Cost of 1,980,000 2079000 2120580 2162991.6 2206251.432
Expenses
Gross Profit 35,218,400 35,863,368 36,580,635 37,312,248 38,058,493
Cost of interest 8,277,500.00 7,834,750 7,392,000 6,949,250 6,506,500

Profit before 26,940,900.00 28,028,618. 29,188,635. 30,362,998.0 31,551,993.0
tax 00 36 7 3
Net profit tax 9,429,315.00 9,810,016.3 10,216,022. 10,627,049.3 11,043,197.5
0 38 2 6
Net profit after 17,511,585.00 18,218,601. 18,972,612. 19,735,948.7 20,508,795.4
tax 70 98 4 7
Cumulative 17,511,585.00 35,730,186. 54,702,799. 74,438,748.4 94,947,543.9
70 68 3 0
Table 19 Cash Flow Statement (in 000 Birr) proposed project 3 STAR
INTERNATIONAL /TOURIST HOTEL
Description Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Owner 16,500,00
Equity 0
Bank Loan 38,500,00
0
Net profit 17,511,585 18,218,601. 18,972,612. 19,735,948. 20,508,795.
.00 70 98 74 47
Deprecation 5260000 5260000 5260000 5260000 5260000
Total cash in 55,000,00 22,771,585 23,478,602 24,232,613 24,995,949 25,768,795
flow 0
Cash out
flow
Investment 52,600,00
on fixed 0
asset
Working 1,980,000
capital
Pre 420,000
Operating
cost
loan 8,277,500. 7,834,750 7,392,000 6,949,250 6,506,500
repayment 00
Tax payment 9,429,315. 9,810,016.3 10,216,022. 10,627,049. 11,043,197.
00 0 38 32 56

Total cash 55,000,00 17,706,815 17,644,766. 17,608,022. 17,576,299. 17,549,697.
out flow 0 .00 30 38 32 56
Net cash 5,064,770 5,833,835 6,624,591 7,419,649 8,219,098
flows
Cumulative 5,064,770 10,898,605 17,523,196 24,942,845 33,161,943
Balance

6.4. FINANCIAL EVALUATION
1. Profitability
Based on the projected profit and loss statement, the project will generate
a profit throughout its operation life. Annual net profit after tax will grow
from Birr 17 million to Birr 20 million during the life of the project.
Moreover, at the end of the project life the accumulated cash flow amounts
to Birr 33.16 million.
2. Ratios
In financial analysis financial ratios and efficiency ratios are used as an
index or yardstick for evaluating the financial position of a firm. It is also
an indicator for the strength and weakness of the firm or a project. Using
the year-end balance sheet figures and other relevant data, the most
important ratios such as return on sales which is computed by dividing net
income by revenue, return on assets (operating income divided by assets),
return on equity (net profit divided by equity) and return on total
investment (net profit plus interest divided by total investment) has been
carried out over the period of the project life and all the results are found
to be satisfactory.
3. Break-even Analysis
The break-even analysis establishes a relationship between operation
costs and revenues. It indicates the level at which costs and revenue are
in equilibrium. To this end, the break-even point of the project including
cost of finance when it starts to operate at full capacity (year 5) is
estimated by using income statement projection.
4. Payback Period
The payback period, also called pay – off period is defined as the period
required recovering the original investment outlay through the
accumulated net cash flows earned by the project. Accordingly, based on
the projected cash flow it is estimated that the project’s initial investment
will be fully recovered within 5 years.
5. Internal Rate of Return
The internal rate of return (IRR) is the annualized effective compounded
return rate that can be earned on the invested capital, i.e., the yield on
the investment. Put another way, the internal rate of return for an
investment is the discount rate that makes the net present value of the

investment's income stream total to zero. It is an indicator of the
efficiency or quality of an investment. A project is a good investment
proposition if its IRR is greater than the rate of return that could be
earned by alternate investments or putting the money in a bank account.
Accordingly, the IRR of this project is computed to be 10.385 % indicating
the viability of the project.
6. Net Present Value

Net present value (NPV) is defined as the total present (discounted) value
of a time series of cash flows. NPV aggregates cash flows that occur
during different periods of time during the life of a project in to a
common measuring unit i.e. present value. It is a standard method for
using the time value of money to appraise long-term projects. NPV is an
indicator of how much value an investment or project adds to the capital
invested. In principal a project is accepted if the NPV is non-negative.
7. ECONOMIC BENEFITS
The project can create employment for 120 persons. The project will
generate Birr 9.42 million in terms of tax revenue per annual. The project
could be one of the sources for foreign exchange earnings by giving
services to international tourists.
8. SOCIO ECONOMIC AND ENVIROMENTAL IMPACT

Concerning socio economic impact, this project will create a good
opportunity for Arbaminch town to have an employ building of modern
international hotel and provide service to the residents. The developer of
this project would cam reasonable profit and the government benefit from
tax collection, many employment opportunities would also be created. The
developments of this project will have varies socio economic impacts such
as opening up of the market and business opportunities for different group
of society.
In fact, the major income for the community comes from treads (whole
selling, retailing and mini trade of different type) is income generating
activities. At present, due to the effective free market economic policy of
the existing government which intern has opened broad opportunities for
the privet sector to involve in any development activity? This indicates
that there is strong establishment of modern and intensively managed
international hotel building in the proposed area.
Concerning environmental impact, since the project is the service

rendering project, it would not have any environment hazard over the
natural environment. However, to avoid any potential population
associated with liquid and solid wests, proper ways of collecting and
turning wests would be considered.
9. REPORTING, MONITERING AND EVALUATION

Monitoring and evaluation will be an integral part of the process of
implementation and period monitoring will be considered by the project. Periodic
monitoring focus on follow up of the day to day activities of each action, project
evaluation on the other hand focuses on the impact based on its achieving will be
processed on particularly approach with its stakeholders.
9.1. MONITERING
Monitoring activates include measuring the physical performance and
quantity of the work done, correlation of the work done with set plan and
time table.
9.2. REPORTING
The project will report major accomplishment of the month to respective
government bodes every six months period. The report will be submitted
to Arbaminch town administration and Gamo zone investment and
industry office.
9.3. EVALUATION
Evaluation will be conducted tree times during the project life years, at the
beginning, in middle and at the end of project life years. The evaluation
based on the overall goal and purposes. The scope of the evaluation will
be;-
 The extent to which purposes the project have be fulfilled

 The expected profit will be maximizing
 Impact contribution to socio-economic development of the region and at
country level.
10. CONCLUTION
Since the proposed project found to be technically visible, economically
variable, financially sound and environmental friendly, the proposed loan
has to be delivered accordingly, so as to motivate local investors and
promote competitive investment throughout the reign. There is growing
demand for high standard level and international hotel in the town. This
project is not sensitive to service fee, operating expenses and investment
coast. Dr. Andargachewe Gedebo three star international hotel has
been delivering services in anew miner after reserving the ownership from
the career owner of the hotel. To help government’s efforts to achieve the
modern hotel service and to realize the organization desire to both
intensively and extensively invest on town promoting the high quality
service program.
There for, it is recommended that the owner;-
 Invest and bulled the hotel building and endeavors to attract

customers by providing as Mach as possible a wide variety of
high quality hotel services.
 Establish a well-organized management team to manage the
busses with special attention to market orientation.
 Endeavor to attract an ever increasing market share in the
sector to utilize the maximum capacity of the resources to
achieve a better position.

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PROJECT PROPOSAL ON THREE STAR (G+5)

INTERNATIONAL TOURIST HOTEL

Project Location: - Arbaminch town

Promoted by: Dr. Andargachew Gedebo Abite

DR. Andargachew Gedebo three star hotel projectPage 2

DR. Andargachew Gedebo three star hotel projectPage 3

 Name of the Promoter: Dr. Andargachew Gedebo Abite

 Type of the Project: Three Star International Tourist Hotel

 Type of Business: Sole proprietorship

 Project Location: Arbaminch Town

 Birr 52,600,000 (95.64%) is for fixed investment cost

 Birr 2,400,000 (4.36%) will be assign for working capital

 Source of finance: The total investment capital of the project is to be financed

from the promoter’s equity and bank loan.

 Birr 16,500,000(30%) is contributed by the promoter

 Birr 38,500,000 (70%) is to be financed by local banks.

out of which 80 permanent and 40 casual workers during construction phase.

DR. Andargachew Gedebo three star hotel projectPage 4

1.1. Investment in Ethiopia

DR. Andargachew Gedebo three star hotel projectPage 5

In adopting a planned and regulated approach the country is in a position to expand

DR. Andargachew Gedebo three star hotel projectPage 6

DR. Andargachew Gedebo three star hotel projectPage 7

2. The Project Description

2.1. Project description and Justification

 To maximize the return on invested capital through modern Hotel services

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Tourism: Tourism is a growing industry within Addis Ababa and Ethiopia as a

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The hotel industry consists of many different services, including accommodation,

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3.2. Present supply in Arbaminch

Accordingly, assuming 365 working days, currently international standard hotels

In order to project tourist arrival in to Ethiopia, the past trend in tourist

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Projection of Room Night Existing Hotels Un

Hotel supply and its growth

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What drives Arbaminch demand?

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The pricing of hotel services depends considerably on the quality of service

3.5. Capacity and service programme

Sr. No. Type of Service Feasible Service Capacity

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Table 4 service provision programe

Sr. Service Service Year

3.6. Marketing strategy

 Emphasizing the access of the proposed hotel to support client’s

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My service compared to the competitors looks like:

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4.1. Design and particulars

4.3. Core facilities

(a) Bed rooms

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(d) Banquet/Conference hall

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Sr. No. Description Unit of Measure Qty. Total Cost (000)