Abduselam Aliyi Project Proposal

PROJECT PROPOSAL ON AL-LODE I N T E R N A T I O N A L HOTEL AND RESORT
Project Location: - Oromia Region, West Arsi

Zone, Bishan Guracha Town
Promoted by: NABIL MUHAMMED AMAN
JANUARY, 2023
Table of Contents
Basic Information .............................................................................................................................. i
Abstract ................................................................................................................................................ ii
1. EXECUTIVE SUMMARY ................................................................................................... 1
2. INTRODUCTION .................................................................................................................... 4
3. The Project ........................................................................................................................... 8
3.4. Mission and goal ............................................................................................................................. 9
3.3.3 Topography ................................................................................................................................. 11
4. MARKET STUDY ................................................................................................................. 12
4.9 Stakeholder analysis....................................................................................................................... 21
5. TECHNICAL STUDY ......................................................................................................... 22
6. ORGANIZATIONS AND MANAGEMENT .................................................................. 30
7. FINANCIAL STUDY ........................................................................................................... 31
8. SENSITIVITY ANALYSIS ................................................................................................ 37
9. RISK ANALYSIS ................................................................................................................. 38
10. MONITORING AND EVALUATION............................................................................... 39
11. CONCLUSION AND RECOMMENDATION .............................................................. 39
APPENDIX1:- Machinery and equipment List With Costs ....................................................... 40
APPENDIX 2: - Stakeholder Analysis ................................................................................................ 49
APPENDEX 3: - ORGANIZATIONAL STRUCTURE ..................................................................... 50
APPENDIX 3:- MANPOWER REQUIREMENT .............................................................................. 51
APPENDIX 4:-IMPLEMENTATION PLAN (GANT CHART) ........................................................ 52
APPENDIX 7:- Table 7.10 Loan Repayment Schedule ......................................................... 53
APPENDIX 8:- Table 7.12 Summary of project Annual production costs ........................ 54
APPENDIX 9:- Projected Profit/loss statement .......................................................................... 58
APPENDIX 10:- Projected cash flow ........................................................................................... 59
APPENDIX 11. BALANCE SHEET............................................................................................. 60
APPENDIX 12:- Viability and other measurement .................................................................... 61
APPENDIX 13:- PROBLEM TREE ................................................................................................... 62
APPENDIX14:- OBJECTIVE TREE .................................................................................................. 63
REFERENCES .................................................................................................................................... 64
1
Basic Information
➢ Name of the Promoter: Nabil Muhammed Aman
Contact Address: 0910824534
➢ Type of the Project: A L - L O D E I N T E R N A T I O N A L H O T E L A N D R E S O R T
➢ Type of Business: Sole proprietor ship
➢ Project Location:
➢ Project capital: The total investment capital of the project is
estimated at 73,571,629 dollar of which:-
• Birr 47,797,310 (65%) is for fixed investment cost
• Birr 25,774,318 (35%) 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 22,071,488(30%) is contributed by the promoter (Nabil
Muhammed Aman)
• Birr 51,500,140 (70%) is to be financed by local banks.
➢ Man power requirement: 300 employees will be benefited within this
project, out of which 125 permanent (100 skilled & 25 unskilled 8th
grade) and 175 casual workers during construction phase.
➢ Land requirement: The total area of 5000 m2 of land is required for the
project
i
Abstract
The project feasibility study proposed on Al-lode international resort investments
has been promoted by Nabil Muhammed in Oromia region, west Arsi zone.
Ethiopia is a fast economic growing country and it is home to the African Union,
the UN Economic Commission for Africa, foreign missions, regional NGO’s and
the UN Conference Centre. Due to its regional political status Ethiopia is often
referred as the political capital of Africa. Al-lode International resort is high
class resort where services like standard bedroom, catering, conference hall, Spa
(Hot Spring), gymnasium, sauna and massage, other sports facilities like tennis
or squash court, min-golf or badminton, bowling, table tennis and children
playground, night club with dancing to live music or discotheque or cabaret etc.
The total investment capital of the project is estimated at birr 73,571,629 of which birr
47,797,310 (65%) is for fixed investment cost of which 65 % of the fixed cost is need foreign
currency while the remaining balance of birr 25,774,318 (35%) will be working capital. The
socio economic benefit of the project is also very high. The promoter, Nabil
Muhammed has a work experience in different business activities. During this
time, the promoter gained a vast knowledge and skill. With this reliable
experience, Nabil Muhammed knows how to manage and lead any organization to
profit and also know how to handle different challenges in the working environment.
The project will provide 125 permanent employs, Generate revenue to government
in the form of taxes. The Project is found to be operationally profitable, viable &
has significant socio-economic benefits. We recommended that according to this
attractive financial and economic benefit of the project all concerned offices &
financial institutions should give their support to facilitate the implementation of this
plan.
ii
1. EXECUTIVE SUMMARY
The project feasibility study proposed on Al-lode international resort

investments has been promoted by Nabil Muhammed in Oromia region, west
Arsi zone. Ethiopia is a fast economic growing country and it is home to the
African Union, the UN Economic Commission for Africa, foreign missions,
regional NGO’s and the UN Conference Centre. Due to its regional political
status Ethiopia is often referred as the political capital of Africa. Ethiopian
Airlines has become a major demand driver, servicing More than 127
international destinations and 22 domestic destinations. Economic growth is
further increasing demand at 11% per annum this is therefore Nabil
Muhammed hotel investment founded its base on it.
Project justification: Al-lode International resort is high class resort where

services like standard bedroom, catering, conference hall, Spa (Hot Spring),
gymnasium, sauna and massage, other sports facilities like tennis or squash
court, min-golf or badminton, bowling, table tennis and children playground,
night club with dancing to live music or discotheque or cabaret etc.
The demand and supply of hotels and its bed rooms service in Ethiopia
has high gab, the supply in Ethiopia has a quality 120 hotels and a total of
15000 bed rooms currently in the market, giving an average number of 125
rooms per hotel. Branded supply is very low; due to this demand and supply
analysis Nabil Muhammed wants to participate and minimizes the gab of
demand and supply standard hotel in Ethiopia.
In this profile study Al-lode international resort is considered to
following provides:-
• 10 King size luxury rooms, 30 standard double bed rooms and 50
single standard bed rooms totally 100 standard bed rooms
services
• International and national restaurant service
• Standard bar and cafeteria
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• Standard massage and sauna bathe service
• Physical fitness room
• Conference hole and others important needs
The total area of the Al-lode international resort investment is about

5000 meter square The area covered and develop the following
infrastructures such as main building (g+10) hotel service and, store,
gourd house, , parking area and other necessaries facilities
The total investment capital of the project is estimated at birr

73,571,629 of which birr 47,797,310 (65%) is for fixed investment cost
of which 65 % of the fixed cost is need foreign currency while the
remaining balance of birr 25,774,318 (35%) will be working capital.
Profitability: The financial analysis of the envisaged project is carried
out for the following ten years. Based on the 10 years financial
projections using the income statement, cash flow statement and
financial internal rate of return (FIRR), the following results are
obtained.
▪ Income statement: According to the projected income statement,
the project will generate profit beginning from the first year of
operation. Based on the 10 years financial projections the projects
average annual net profit after payment of bank interest,
depreciation and tax amounts to birr 13,593,732
▪ Cash flow statement: The cash flow statement also shows a substantial
amount of cash surplus right from the first year of project operation life.
The cash balance grows from birr 21,685,936 in the first year to
cumulative balance of birr,
2
384,396,352 during the 10th year of operation indicating the capacity
of the project to finance itself and generate cash surplus for further
investments.
▪ FIRR Computation: The computation of the project FIRR shows that the
project will profitably generate reasonable return on investment. Before
tax financial internal rate of return is calculated to be 33.9%. This
indicates the project is financially viable with an internal rate of return
(IRR) of 33.9 % and net present value (NPV) 102.2 million at discount
rate 35 %.
▪ Socio economic benefits: The socio economic benefit of the project is
also very high. The project will provide:- 125 permanent employs,
Generate revenue to government in the form of taxes, Facilitate and give
a good service for local and international tourists
▪ Conclusion and recommendation: The Project is found to be
operationally profitable, viable & has significant socio-economic
benefits. We recommended that according to this attractive financial
and economic benefit of the project all concerned offices & financial
institutions should give their support to facilitate the implementation
of this plan.
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2. INTRODUCTION
2.1. 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 120 million offers significant domestic
market for locally produced goods and service the country is also a
m e m b e r o f t h e common Market for e a s t e r n and s o u t h e r n Africa
COMESA offering huge benefit of Exporting commodities in preferential
tariff rates to a wider regional market.
Privet investment s h o u l d be encouraged t o increase form year to year
and Investment constraints have to be alleviated in order to pave
development ways so that investment sector 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 c a s e needs both efforts o f the privet as
well as the public sector. There are Investments that could not be
undertaken by privet s e c t o r 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.
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2.2. 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.
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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. Only few hotels and
recreation centers out of Addis Ababa have the capacity to provide
accommodation for mid or high-class guests.
By taking this encouraging as an opportunity the promoter project plan to

establish Al-lode international resort in Oromia region, west Arsi zone, Bishan
Guracha Town for the benefit of the promoter, the E n v i r o n m e n t a l
community as well as the country as a whole.
2.3. Promoter Background
The promoter, Nabil Muhammed has a work experience in different

business activities. During this time, the promoter gained a vast
knowledge and skill. With this reliable experience, Nabil Muhammed
knows how to manage and lead any organization to profit and also know
how to handle different challenges in the working environment. Moreover
Nabil Muhammed has a very good reputation with banks and different financial
organizations.
2.4. Ambition of creating the R e s o r t 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 in the area.
Although few less than five star h o t e l s have already working in
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the area, but still huge gap is there in between demand and supply in the
town. The resort service is widely accepted in Ethiopia, 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 Al-lode international resort in Oromia region,
west Arsi zone, Bishan Guracha Town as well as in the country. Due to this, it
has become imperative to build and maintain Al-lode international resort
hotels service for the mankind in prevailing conditions.
2.5. 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 of birr 73,571,629 birr 25,774,318
(30%) is to be contributed by the promoter (Nabil Muhammed Aman) while the
remaining balance of 47,571,629 (70%) is to be covered by the local bank
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3. The Project
3.1. Project description and Justification
International standard tourist hotel is high class hotel (from three to five-
star level) where services like bedroom, catering, meeting rooms,
multipurpose assembly hall, swimming pool, Spa (Hot Spring), gymnasium,
sauna and massage, other sports facilities like tennis or squash court, min-
golf or badminton, bowling, table tennis and children playground, night club
with dancing to live music or discotheque or cabaret etc.
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 (or
named in some smaller hotels and B&Bs) to allow guests to identify their
room. Some boutique, high-end hotels have custom decorated rooms. Some
hotels offer meals as part of a room and board arrangement. In the United
Kingdom, a hotel is required by law to serve food and drinks to all guests
within certain stated hours. In Japan, capsule hotels provide a tiny room
suitable only for sleeping and shared bathroom facilities.
3.2. 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:-
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• 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.
3.4. 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.
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3.3. Project location and justification
3.3.1. Location
Bishan Guracha Town is found in the Oromia Regional state at the southern edge of west
Arsi Zone. The town is situated at a distance of 266 km and 16 km south from Addis Abeba
and Zonal capital town Shashemene respectively and 4 km away north of Hawassa City.
Astronomically, the town is approximately located between 07008’ North latitude and 380
48’ East longitudes. The town has been developing in to as one of important Oromia urban
centers since the beginning of 1950‘s. As to the history of its existing socio-Economic
development reveals, it has got its birth from the small scaled formal and informal
settlements. The name Bishan Guracha coined from two Afan Oromo words “Bishan” (water)
and “Guracha” (black). The name “Bishan Guracha” has got its name from the color of the
river which flows from the Wondo highlands to Habaas Lake and bounds the town from the
eastern area. Bishan Guracha is one of the second graded towns in the region which has
997.58 hectares. It is bounded by Shashemene woreda, south nation nationalities and peoples
region (SNNPR). Wondo and Shala woreda to the North, South, East and west and west
respectively. Based on the proclamation 65/2003 the Urban local government being
accountable to the region and the town council is latest progressively emerged by the new
reformation system restructuring the town as an independent authority. The town has given
the name Bishan Guracha urban local government by proclamation consisting one kebeles.
The figure below shows map of the Bishan Guracha administrative town.
3.3.2. Climate:
Climate as a wide team encompassing rainfall, wind, sunshine etc has been recorded for about 30
years. Unfortunately Bishan Guracha Town has not a climatic data of 30 years with its all elements.
Thus, we can see the existing year’s rainfall data of the town. Bishan Guracha and its hinterlands
have the same general climatic characteristics with Hawassaa City. Globally, it is part of tropical
climatic region, which is distinguished by its warm temperature, high rainfall and humidity. It also
learnt that the study area receives relief/orographix type of rain fall. The town average rainfall for
years was 1735.8mm. However, this value seems highly exaggerated as the mean.
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3.3.3 Topography
Bishan Guracha town is situated at the center of the Great East African Rift valley which is widely
associated with “major danger” seismic Zone (NUPI 1994, cited in Alemayehu Addunya, 1995), hot
and humid flat land. Most of the area is characterized by gentle slopes towards Habas Lake, but with
a plateau along the north central part of the study area. The elevation of the studied land generally
drops to the east, south and southwest direction facilitating the discharge of flood that finally ends up
either into Bishan Guracha River or the Habas Lake. The peak altitude is considered to be a little bit
above 1,508 meters and the lowest is measured as 1400 meters above sea level. Except fewer
scattered plateaus to the west central part, the area is categorized as a flatland surface.
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4. MARKET STUDY
4.1. 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 4.1 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
12
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.
4.2. Present supply in Ethiopia
Table 4.2 international standard hotels in Addis Ababa
S/N Name of Hotels in Ethiopia Number of

Beds
1 Hilton Hotel 372
2 Sheraton Hotel 293
3 Ghion Hotel 210
4 Radisson Blu Hotel 204
5 Radisson Blu Hotel 204
6 Elilly Hotel 154
7 Intercontinental Hotel 152
8 Harmony Hotel 150
9 Capital Hotel And Spa 114
10 Ethiopia Hotel 110
11 Jupiter International Hotel - Kasanches 102
12 Dreamliner Hotel 96
13 Saro Maria Hotel 96
14 Mn International Hotel 91
13
15 Wassamar Hotel 66
16 Washington Hotel 65
27 Kaleb Hotel 64
18 Axum Hotel 56
19 Churchll Hotel 53
20 Aphrodite Hotel 52
21 National Hotel 52
22 Global Hotel 50
23 Bole Ambassador Hotel 48
24 Panorama Hotel 45
25 Tds Hotel 41
26 Adot-Tina Hotel 40
27 Jupiter International Hotel – Bole 40
28 Plaza Hotel 39
29 Nigist Towers Guest House 32
30 Kz Hotel 32
31 Nigist Towers Guest House 32
32 The Residence Hotel 19
3174
Source: - Ethiopian Tourism Communion.
Accordingly, assuming 365 working days, currently international

standard hotels in Ethiopia 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.
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Table 4.3. Existing hotel capacities, projected and unsatisfied demand
Projection o f 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 five

star hotel with room capacity of 75 to 100 is recommended.
4.3. 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. Tourist
could come to the country for the purpose of visiting our country areas and
rest on different resort mainly is:-
• fast growing regional economic center and the capital of Ethiopia
• African Union
• UN Economic Commission for Africa
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• foreign missions
• regional NGO’s and the UN Conference Centre
• Due to its regional political status Addis is often referred as the political
capital of Africa.
• Ethiopian Airlines has become a major demand driver, servicing 127
destinations from Bole International Airport.
• Economic growth is further increasing demand at +11% per annum
.
Hotel supply and its growth
Promotors 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
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4.4. 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. The aid and diplomatic segments
continue to provide the majority of the market demand in country. Ethiopia
has a strong domestic economy which is driving demand growth in the
mid-market.
Performance
Ethiopia achieved an occupancy of 58% at an average daily rate of USD

220 in 2015*. We estimate market wide occupancy at 65% at an ADR of
USD 135. Once the locally branded quality supply is included.
Investment
Bishan Guracha town 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. Assets are tightly held and liquidity is low.
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,
17
the expectation of further delays and projects being put on hold, is 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.
4.5. Pricing
The pricing of resort services depends considerably on the quality of service

rendered and its location. The relatively high standard hotels in country
charge a price, which ranges from USD 110(Haile resort hotel) to USD
255(Sheraton Addis) for a single night per single room. Other hotels
charge prices that fall in this range. For this envisaged project a price of
Birr 1000, for single bed, 1400 for double bed room and 1800 for suit king
size hotel per room per single night is proposed.
The resort 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.
4.6. Capacity a nd service programmed
4.6.1. Capacity
From the market study, it is observed that there is a great demand

gap between the demand and supply of international tourist standard
resort 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 4.4 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 200 at a time each
and traditional
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• 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 small pools) 45 Heads/day and 20
head/day
6 Meeting room 50x3 seats

7 Night club 300 at a time
4.6.2. Service Programmed:
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 4.5 service provision program
Sr. Service Service Year

No.
1 2 3- 10
1 Service provision rate (%) 75 90 100
4.7. 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.
19
• 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.
4.8. Competitors Overview
Three are 36 standard 3 to 10 resort hotels in Ethiopia but still three is a

huge gab but our hotel service is do quality and clean services.
In addition to the above, the failure stories that I have observed from others
and the comments collected from my customers will help me to win my
competitors.
In conclusion, 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:
20
4.9 Stakeholder analysis
The stakeholder analysis can be used to understand the stakeholder environment and
determine the key stakeholders which will help us to priorities management resources. For
each project, there are many interested "customers" or investors whose interest in the project
might change depending on each project phase. The project execution is affected by these
potential stakeholders and determining their stakeholder impact and how much they want to
be involved will help with minimizing potential risks of sabotage and having better outcomes.
That is a short explanation of the importance of stakeholder analysis. Further, it consists of
three steps: identifying stakeholders, prioritizing stakeholders and finally, understanding
them.
According to the qualitative results, the themes that emerge associated with hotel
owners/managers include economic concerns, top management commitment, and operational
challenges to environmental practices. Environmental policies, regulations, and support are
identified as the themes associated with government agencies. Moreover, the knowledge,
consultancy, and professional assistance provided by academics and non-governmental
organizations facilitate the acceptability and implementation of hotel environmental initiatives.
The research implications highlight the need for communication and collaboration among
stakeholders.
21
5. TECHNICAL STUDY
5.1. 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 resort 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.
5.2. Core facilities
The envisaged resort hotel should have sufficient and comfortable space to
accommodate the core services as per the requirements of the resort 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 size (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.
22
(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 bars 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.
23
(c) Main restaurant
Technically a resort 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 r e s o r t hotel with five stars needs to have a conference 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.
24
Business center (mini market shop)
A resort 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) Supports
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.
25
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 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 150 vehicles is
planned to be allocated with the standard width and height of the drive in
routes.
5.3. 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
26
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
27
project and the required quantities are forecasted in section 5.
5.4. Inputs/ raw materials and utilities
5.4.1. Raw Material cost

The annual cost and list of raw materials are indicated in Table 5.1.
Table 5.1 Annual requirements of raw and auxiliary materials
S/N Raw materials Quantity per cost per per year

month month
Food materials raw costs lamp sum 500,000.00 6,000,000.00
d/t type Beverage raw costs lamp sum 500,000.00 6,000,000.00
massage, sauna bath and other lamp sum 15,000.00
related cost 180,000.00
Cleaning materials and other lamp sum 15,000.00
miscellaneous uses 180,000.00
Total 12,360,000.00
5.2.2. Utilities
Annual requirement of electricity, water and fuel is estimated at 2,367,000
birr from which, 500,000 kwh, 300,000 m3 and 2000 liters, a r e
electricity, water and fuel respectively. The total costs of utilities are,
therefore, about Birr 2,367,000 per annum.
Table 5.2 utilities
Descriptio Qty. Cost
n unit cost per
Electricity, kWh ye
50000 1.25 625000
Water, 0 4.5 135000
m3 30000 16 0
LPG, lt 0 32000
18
Diesel, 2000 360000
lt 20000 236700
0
5.5. Land, Building and civil work
5.5.1. Land lease

The overall land required is about 5000 square meters. Land lease cost at
the rate of Birr 45 per m2 average and for 99 years land holding is estimated
to be Birr 4.3 million. Thus, the total land & construction cost assuming that
the total land lease cost will be paid in advance (5%) amounts to Birr
28
433,917 government has following significances the remaining amount paid
within 40 years.
5.6. 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.
5.7. Implementation Schedule
The actual implementation of the International 5 star hotel is planned to

begin on the May 2023. 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.
29
6. ORGANIZATIONS AND MANAGEMENT
6.1. 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.
6.2. 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
resort hotel Service.
6.3. 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
r e s o r t 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 300 employees, 125 permanent (100 skilled &
25unskilled) and 175 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.
30
It’s 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
7. FINANCIAL STUDY
Financial analysis of the proposed project of Cattle fattening farm will be

projected to test the financial visibility if the investigated organization.
Quantifying both project cost and benefits over the assumed project life,
which is five years, made the project visible. Besides it has been tried to
make a realistic forecasting of costs and the benefits based in current
market price of all necessary materials. Once the anticipated cattle fattening
operation has been attained both projects cost and revenue is estimated to
be consumed to be compensated by increasing in sales revenue
7.1. Classified Investment cost
The cost of the project is classified as fixed incitement cost and initial
working capital. With regards to fixed investment cost of the project, the
land lease, building and civil works cost, machinery and equipment cost
office furniture costs and fuel costs will be required. As to working and
operating cost a brief illustration will be given as to utilities, salary expense,
maintenance cost and depreciation cost and the other related costs
7.1.1. Fixed costs

Fixed cost that include Land development, Building and civil work,
machinery equipment and vehicles and office furniture estimated birr
47,797,310.which is 65 % of the total project.
31
Table 7.1 land development
Description Qty Unit Price Total Price (Br)
S/N (Br)
1 Land clearing and leveling 974 m2 2,500 1,000,000
2 Land lease (5%) 433,917
3 Canal work 1 600000 600,000
4 Water reservoirs 2 250,000 500,000
Total - - 2,533,917
Table 7.3 List of summarized machinery and equipment’s and cost

S/n Description Total cost
1 furniture and equipment for 90 Bed room
Luxury bed room (10 rooms) 688,000 Import from
Double bed room (20 rooms) 3,019,000 duty free
Single bed room (50 rooms) 2,822,500
2 furniture and equipment for office and reception area 1,295,300 Local market
3 furniture and equipment for bar and cafeteria 1,232,900 Local market
4 furniture and equipment for restaurant and dining room 485,750 Local market
5 furniture and equipment for conference room 1,468,250 Local market
6 furniture and equipment for kitchen materials 5,237,428 Local market
7 Sauna and steam bath materials 526,690 Duty free
8 Aerobics and physical fitness 682,100 Duty free
9 Massage service materials 300,000 Duty free
11 Mini market shop establish costs 200,000 Local market
12 Garden and creation area 81,000 Local market
Total 17,069,918
Table 7.4. Procurement of Vehicles and furniture’s
Type of Vehicles Unit Qty Unit Price Remark

S/N
(Br)
1 Pick-up (4WD)/ No. 2 1,250,000 duty free
2 Mini bus No. 2 1,100,000 duty free
3 Bus service No. 2 1,800,000 duty free
4 Office furniture’s Ls - 400000 Local market
5 computer and accessories 500000 Local market
Total - - 5,050,000
32
Table 7.5 Summary of Fixed asset
7.1.2. Operational cost costs

Production cost of the project includes direct production and overhead costs.
The major cost item under this category includes cost of material and labour
inputs, fuel and lubricants, repair and maintenance, employee salary and
benefits, insurance, office supplies and other miscellaneous expenses; the
total estimated production cost is birr 6,732,310 million 20.8 % of the total
project capital is.
Direct cost
Table 7.6.Raw materials
Table 7.7 Utilities
33
Administration cost
• Employee benefits : It includes medical expense, uniform and other

incentive package and assumed to be 25% of annual salary expense = birr
1,608,000
• Travel expense: It is assumed to be 10% of annual salary expense i.e. birr
643,200
• Repair and maintenance
Cost estimate/ year

Item
% Price
Land development 2 50678.34
Building & Constructions 2 462869.5
Machinery and equipment 3 512097.552
Vehicles & furniture’s 5 151500
Total - 1,177,145.39
• Insurance: It is assumed to be 1% of fixed investment cost = birr

477,973
• Office supplies: Including stationery and sanitary supplies annual
cost of birr 100,000 is considered.
• Miscellaneous expense: It includes cost of land rent, telephone and
postage, audit, legal and license fees and other miscellaneous
expenses. The total annual cost of these cost components is estimated
to be birr 150,000 /year.
7.2. Project Capital and financing
7.2.1. Project Capital

The total investment capital of the project is estimated at birr 73,587,629 of
which birr 47,797,310 (65%) is for fixed investment items while the
remaining balance of birr 25,790,318 (35%) will be initial working capital.
The detail of investment capital of the project is given below
34
7.9. Project capital and source of income
7.2.2. Financing
The total investment capital of the project is to be financed from the

promoter’s equity and bank loan. Out of the total capital birr 22,076,289
(30%) is contributed by the promoter, Aster Dereje PLC while the
remaining balance of birr 51,511,340 (70%) is to be financed by local
banks. The bank loan will be repaid based on the following terms and
conditions:
• Loan amount = birr 51,511,340
• Installment period/ term = 10 years
• Interest on loan (including service charge) = 11.5%
7.3. Revenue projection
The project will collect its revenue from the customer service. The selling of food
and beverage and rented rooms has estimated based on the current market price
and hotel standard of similar service provision in town. The annual service
program is formulated based on proposed plant capacity considered the following
table
35
Table 7.13 Description of revenue projection
➢ NPV (Net Present Value)
It is a method of calculating the expected net gain or loss from project by discounting
rate of all expected future cash inflow and outflows to the present point in time In
the above table shoes that NPV at 30% and 35 % discount rate is 128.8 million and
102.2 million respectively, this figure is positive value or NPV>0 it is indicate that
accepted the project until 30 % and 35 % of discount rate
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 4) is
estimated by using income statement projection.
BE =Fixed Cost= 23 % Sales – Variable Cost

36
➢ Payback Period (PBP)
The payback period is the amount of time required for a firm to recover its initial
investment in a project, as calculate from cash inflow
The investment cost and income statement projection are used to project the pay-
back period
PBP = Initial investment Cost Gross

Profit + Depreciation
= 73,587,629
13,582,495 + 4,779,731
4=5Years
The payback period =4 is less than the maximum acceptable payback period (10)
therefore accept the project.
➢ IRR
The internal rate of the project is the rate of discount that radios the present value
of the investigated project to zero. In calculating the IRR, the discount rate can be
adjusted until the NPV becomes Zero or at least as to zero.
Hence, the IRR of this project is calculated as follows After tax
IRR = 35 + 5 (102.2/128.8)
=33.9%
IRR=33.9% of the project returns its initial investment cost within its life
8. SENSITIVITY ANALYSIS
Sensitivity analysis is variant of scenario analysis in which each scenario

represents a change in only one variable, rather than a number of variables. For
the proposed project, the sensitivity of the project has been computed at 30% and
35% for sales reduction, operating cost increase and investment cost increased
accordingly, as described in table 7.16 the result shows that IRR at 33.9%
operating cost increase and 30 and 35% investment cost increase and 30% service
sales reduction. Predicting among these sales reduction is more sensitive to the
project and it should further expand after the project proposed life time because in
this case NPV equal zero at IRR=33.9
37
9. RISK ANALYSIS
The major risk of this project shall be high market price fluctuation and turnover the
skilled and trained man power. These risks can be mitigated. The high staff
turnover may be lessened by creating conductive working atmosphere and providing
some benefits. For this project, 25% benefit is proposed for the permanent employees
Characteristic (Personal) Risk: This is the most important risk, which should be
seriously considered? As to this company, the promoter have sufficient years of
work experience in both government and private organization (leading private
business by engaging themselves), so personal risk is minimum under this context
Business Risk: The fate of the business is generally found to be dependable. The
demand- supply analysis exhibits the need of the service of the business organization.
According to the overall demand the effect of competitors in the sector would not be
an immediate alarming threat at least for the coming few years. In additional to this
Long year experience of the owner in the field will help to react against any adverse
situation in the business. However, the reaction of competitors should be attended. In
additional to an advanced promotional work and sustainable goodwill development by
creating new and best quality products with good service deliveries
Collateral Risk: Since the owners of the project are engaged on different related
business, there is no any risk related to collateral. In this regard, the proposed
building and other proposed equipment and the business as a whole are
dependable securities. The experience and skill of the owner as well as the manager
and the other expertise add confidence to the lenders. Therefore, there is no risk
regarding collateral in general.
Construction Risk: Construction risk is one of the most important areas of risk
that need great consideration during project implementation. In the case of 5 star
international hotel services, the construction work of the proposed building will be
made by phase with self-response supervision. Hence, there is no as such serious
risk related to construction work.
38
All the identified risks, which are related to the universally accepted lending policy,
are to the acceptable level that keeps the lender’s interest in safe position.
Furthermore, the quality of the assets of the company is dependable and the
projected finical reports show that the company will have a capacity to pay the
principal and interest without any problem with in short period of time.
10. MONITORING AND EVALUATION
Monitoring and Evaluation (M&E) has long been recognized as a vital aspect of
development projects generally and of industrial and services projects in
particular. The monitoring of project performance consists of the tracking of
human, physical and financial resources and the recording of how they are
converted into outputs (project goods and services), and in turn, outcomes and
impacts.
11. CONCLUSION AND RECOMMENDATION
Conclusion: The Project is found to be operationally profitable & has significant

socio-economic benefits. According to the projected income statement, the envisaged
project starts earning profit from the first year of production. The income statement
and other profitability indicators show that the project is viable. The project is
believed to have significant social and economic benefits that accrue to the society
beyond those financial returns to its owner. The most remarkable social benefits
can be expressed in terms of job creation that leads to reduction in the level of
unemployment.
Recommendation: The project directly employs 125 persons; therefore, considering

the attractive financial and economic benefits the project is to produce, the promoter
has made the necessary preparation hoping that all the concerned offices & financial
institutions should give their support to facilitate the implementation of this plan.
39
APPENDIX1:- Machinery and equipment List With Costs
Table 5.3 list of machinery and equipment

Furniture and equipment's required for Suit bed rooms (10 )
S/n Description Quantity Unit price Total (birr)
1 Sofa single 20 2,500 50,000

3 TV 29” 10 8,000 80,000
4 Telephone stand 10 500 5,000
5 Telephone apparatus 10 750 7,500
6 small Refrigerators 10 4,000 40,000
8 Coffee table 20 1,500 30,000
9 French Bed (120 x 180cm) 10 20,000 200,000
10 Cupboard built in 20 5,000 100,000
11 Head lump 20 1,000 20,000
12 Writing table with chair set 20 2,500 50,000
13 Chest drawer 20 1,500 30,000
14 Spring mattress 10 5,000 50,000
16 Bed sheets 20 500 10,000
17 Bed cover 10 800 8,000
18 Pillow 30 250 7,500
Total - 688,000
Furniture and equipment's required for double bedrooms (20)
1 Sofa single 40 2,500 100,000

3 TV 21” 20 8,000 160,000
6 Refrigerators 20 4,000 80,000
7 Standing lump 20 1,000 20,000
8 Coffee table 20 1,500 30,000
9 French Bed (120 x 180cm) 40 12,000 480,000
40
11 Head lump 20 1,000 20,000
12 Writing table with chair 20 2,500 50,000
13 Chest drawer 20 1,500 30,000
Bed made wood 80 20,000 1,600,000
15 Bed sheets 80 500 40,000
16 Bed cover 80 800 64,000
18 Pillow 80 250 20,000
Total 3,019,000
Furniture and equipment's required for single bedrooms
1 Sofa single 100 2,500 250,000

2 TV stand 50 2,000 100,000
3 TV 21” 50 5,000 250,000
6 Refrigerators 50 4,000 200,000
7 Standing lump 50 1,000 50,000
8 Coffee table 50 1,500 75,000
9 French Bed (150 x 180cm) 50 20,000 1,000,000
11 Head lump 50 1,000 50,000
12 Writing table with chair 50 2,500 125,000
13 Chest drawer 50 1,500 75,000
15 Bed sheets 100 250 25,000
16 Bed cover 100 500 50,000
17 Blanket 100 1,000 100,000
18 Pillow 100 100 10,000
Total - - 2,822,500
41
Furniture and equipment's required for office, reception, leisure and others
1 Executive double redistill desk 2 20,000 40,000

2 Executive swivel arm chair 2 5,000 10,000
3 Double pedestal desk 5 4,000 20,000
4 Servile admin chair 5 3,500 17,500
5 Secretarial desk 2 3,500 7,000
6 Guest chairs 8 600 4,800
7 Safe box 4 4,000 16,000
8 Shelf 4 3,000 12,000
9 Reception desk 2 40,000 80,000
10 Sofa box 2 15,000 30,000
11 Cash register with stand 2 7,500 15,000
12 Telephone apparatus box 2 20,000 40,000
14 Fax machine with stand 2 30,000 60,000
15 Pc with printer and stand 10 15,000 150,000
16 Single sofa high based 4 5,000 20,000
17 Coffee tables 4 2,000 8,000
18 Standing lump 6 2,000 12,000
19 Recreation facilities Ls - 150,000
21 Emergency power generator 2 300,000 600,000
Total - - 1,295,300
Furniture and equipment's required for bar and cafe
1 Tables 60 2,500 150,000

2 Chairs 300 750 225,000
3 Long drawer (Balcony) 2 30,000 60,000
5 TV stand 5 2,000 10,000
6 TV set 27” 5 15,000 75,000
7 Casher box 3 5,000 15,000
8 Stools (high chairs) 12 1,500 18,000
42
9 Coffee machine stand 2 50,000 100,000
10 Refrigerator big 2 20,000 40,000
11 Refrigerator medium 2 12,500 25,000
12 Coffee roaster 2 7,500 15,000
13 Ice maker 2 5,000 10,000
14 Pastries stand 2 15,000 30,000
15 Juice maker 2 5,000 10,000
16 Draft beer machine 2 15,000 30,000
18 Tape recorder 2 10,000 20,000
19 DVD player 2 1,200 2,400
20 Satellite dish with receiver 2 2,500 5,000
21 Shelf with drawer 2 20,000 40,000
22 tea cup 500 25 12,500
23 coffee cup 500 25 12,500
24 Milk cup 500 25 12,500
25 Makiyato cap 500 25 12,500
26 water glass 500 15 7,500
27 draft glass 500 60 30,000
28 wine glass 500 100 50,000
29 Whisky glass 400 100 40,000
30 local gen glass 500 50 25,000
31 service tree 1000 150 150,000
Total - - 1,232,900
Furniture and equipment's required for dinning/restaurant room
1 Tables 50 2,500 125,000

2 Chairs 200 750 150,000
3 Long drawer (Balcony) 2 30,000 60,000
5 TV stand 2 2,000 4,000
6 TV set 27” 2 7,500 15,000
7 Stools (high chairs) 2 1,500 3,000
8 Refrigerator big for beer 2 20,000 40,000
9 Refrigerator medium for soft drank 2 12,500 25,000
43
10 Coffee roaster 2 7,500 15,000
11 Ice maker 2 5,000 10,000
12 Draft beer machine 1 15,000 15,000
13 water glass 200 12 2,400
14 draft glass 200 60 12,000
15 service tree 50 30 1,500
16 30-34 sauce pot 10 20 200
17 Sauce-medium 40 30 1,200
18 Soup pot 40 50 2,000
19 Medium 4 45 180
20 Large – round hot pot 10 80 800
21 Medium – round hot pot 10 57 570
22 Small – round hot pot 10 30 300
23 High rim flat 10 70 700
24 Flat rim round 12 50 600
25 Normal alloy 20 45 900
26 Non stick normal 20 20 400
Total 485,750
Furniture and equipment's required for Conference rooms
1 Tables 100 2,500 250,000

2 Chairs 1000 750 750,000
3 Buffet stand 5 20,000 100,000
4 Speaker (big) 5 5,000 25,000
5 Amplifier 3 20,000 60,000
6 Wireless microphone 5 750 3,750
7 Table microphone 20 350 7,000
8 LCD projector 5 30,000 150,000
9 Slid board 5 5,000 25,000
10 Satellite dish with receiver 5 2,500 12,500
11 TV stand 5 2,000 10,000
12 TV set 27” 5 15,000 75,000
Total - - 1,468,250
Page 44
Kitchen materials
1 Stove 5 45,000.00 225,000.00
2 Toaster 5 15,000.00 75,000.00
3 Oven 5 40,000.00 200,000.00
4 Aluminum tables 8 4,000.00 32,000.00
5 Grill (electrical) 5 15,000.00 75,000.00
6 Washer sink 5 5,000.00 25,000.00
7 Refrigerator 5 20,000.00 100,000.00
8 Clip fryer 5 5,000.00 25,000.00
9 Pastries formwork 5 5,000.00 25,000.00
10 Petra 10 2,500.00 25,000.00
11 Cupboard 3 7,500.00 22,500.00
12 Shelf 3 5,000.00 15,000.00
13 Grill bench top 5 11,887.00 59,435.00
14 Deep friend double 6 4,218.00 25,308.00
15 Micro wave grill 5 3,250.00 16,250.00
16 Mincer meat 5 12,999.60 64,998.00
17 Brad oven 5 47,999.85 239,999.25
18 Pizza claye oven 5 29,841.00 149,205.00
19 mixer 15 KG capacity 5 37,999.45 189,997.25
20 Range commercial 5 38,745.00 193,725.00
21 Range linear 3 14,995.00 44,985.00
22 Fruit blender 3 3,585.00 10,755.00
23 Potato chopper 3 41,999.30 125,997.90
24 Onion peeler /chopper 3 15,780.00 47,340.00
25 Blender small 3 3,185.00 9,555.00
26 Deep refrigerator 6 9,450.00 56,700.00
27 refrigerator 10 9,960.00 99,600.00
28 Digital scale (35k.g) 3 1,800.00 5,400.00
29 Waiting scale (220 K.g) 3 4,700.00 14,100.00
30 Kitchen hood 5 29,745.00 148,725.00
31 Kitchen cabin with double Sink 5 31,488.00 157,440.00
32 Kitchen cabin 5 27,488.00 137,440.00
33 Kitchen top -stainless steel 8 8,195.00 65,560.00
34 Kitchen top -stainless steel -large 8 13,195.00 105,560.00
35 Chaffing dish -silver 25 9,499.00 237,475.00
36 Spaghetti plate 50 712.2 35,610.00
37 Dinner plate 50 720 36,000.00
Page 45
38 Dessert plate 50 720 36,000.00
39 Table fork 10 163.8 1,638.00
40 Table knife 10 136.8 1,368.00
41 Chopper knife 10 62.1 621.00
42 Table spoon 15 163.8 2,457.00
43 Kitchen Pan 10 499 4,990.00
44 Food Box 220 1,100.00
45 soup bowl 336 1,008.00
46 Cook pot large 10 693.2 6,932.00
47 Cook pot big 38 10 3,054.00 30,540.00
48 Cook pot medium 20 581.4 11,628.00
49 Cook pot small 20 469.6 9,392.00
50 restaurant Table w/ 4 Chair 50 9,246.00 462,300.00
51 cafe table 20 1,455.00 29,100.00
52 Restaurant chair- sheraton Type 100 2,510.00 251,000.00
53 cafe chair 100 964.5 96,450.00
54 Open generator-24 KV 389,748.00 1,169,244.00
sub total 5,237,428.40
steam and sauna bath

S/N Description Qty Unit cost Total Cost
1 sauna electric heater 16 12000 192,000
2 sauna bucket 16 6000 96,000
3 sauna ladle 10 400 4,000
4 sauna thermometer 16 300 4,800
5 electric sauna timer 12 270 3,240
6 sauna hygrometer 16 950 15,200
7 steam generator 2 35000 70,000
8 cloth hunger 17 250 4,250
9 foldable rest 24 400 9,600
10 wall mirrer 12 850 10,200
11 soffa guest chair 16 350 5,600
12 wall mirror 12 4000 48,000
13 wall mounted 10 2500 25,000
14 reception table 2 2200 4,400
15 swivel chair 2 1000 2,000
16 satellite dish with color 2 10000 20,000
17 public addressing system 2 6000 12,000
18 wall watch 2 200 400
total 526,690
Page 46
S/N Aerobics and physical fitness Qty Unit cost Total Cost
1 Public addressing system 3 15,000 45,000
2 Aerobics dumbbell 10 3,500 35,000
3 Stepping rocks(assoried) 120 250 30,000
4 Wall mounted mirror 30 200 6,000
5 Bike Proms 9 5,500 49,500
6 Track tread mills(electrical) 2 22,000 44,000
7 Track tread mills(manual) 6 4,000 24,000
8 Heart rate monitors and pedometers 6 2,500 15,000
9 body solid endurance up right 2 11,000 22,000
10 muscular dynamics 2 13,000 26,000
11 Simplex II series 2 16,000 32,000
Portable massage tables with tools and
12
accessories 2 17,000 34,000
13 Massage body work tools 6 4,000 24,000
14 Massage chairs with tools and accessories 2 11,000 22,000
15 massage store heater 2 1,500 3,000
16 Massage table electric warming pad 4 3,000 12,000
17 flece message table pad 12 1,000 12,000
18 Massage table and video kit 2 6,000 12,000
19 pillows/body support/back care 16 4,500 72,000
20 cleaner and sanitizers 8 2,500 20,000
21 wall mirror(1.5 -2 ml) 6 400 2,400
22 sofa guest chair(three set) 10 4,500 45,000
23 Wall maound lockers 20 2,500 50,000
24 receptionist table 2 2,200 4,400
25 swivel chair 4 2,000 8,000
26 satellite dish with color 2 10,000 20,000
27 public addressing system 2 6,000 12,000
28 wall watch 2 400 800
Total 682,100
Garden recreation center

S/N Garden recreation center Qty Unit cost Total Cost
1 Lawnmower 5 2000 10000
2 wheelbarrow 10 500 5000
3 Metal scraper 10 100 1000
4 Coffee machine 2 10000 20000
5 plastic chair 40 150 6000
6 Oval shaped plastic table 20 800 16000
7 umbrella 20 400 8000
8 juice glass 40 50 2000
9 tea spoon 50 5 250
Page 47
10 Coffee spoon 50 5 250
11 Juice stranner 2 150 300
12 water glass 30 20 600
13 Coffee cups with saucer 20 100 2000
14 tea cups with saucer 20 60 1200
15 ice-cream box 1 5000 5000
16 Water sprinkles 30 40 1200
17 water house nylon rope 4 500 2000
18 Gardner's kits 2 100 200
Total 81,000
Summary of equipment
S/n Description Total cost
1 Furniture and equipment for 90 Bed room
Luxury bed room (10 rooms) 688,000
For double bed room (20) 3,019,000
Single bed room (50) 2,822,500
2 Furniture and equipment for office and reception area 1,295,300
3 Furniture and equipment for bar and cafeteria 1,232,900
4 Furniture and equipment for restaurant and dining room 485,750
5 Furniture and equipment for conference room 1,468,250
6 Furniture and equipment for kitchen materials 5,237,428
7 Sauna and steam bath materials 526,690
8 Aerobics and physical fitness 682,100
9 Massage service materials 300,000
11 Mini market shop establish costs 200,000
12 Garden and creation area 81,000
Total 17,069,918
Page 48
APPENDIX 2: - Stakeholder Analysis
AL-LODE
HOTEL &
RESORT
STAKE
HOLDER
Page 49
APPENDEX 3: - ORGANIZATIONAL STRUCTURE
CEO
Adviser Internal Auditing

& Inspection
Secretary
Page 50
APPENDIX 3:- MANPOWER REQUIREMENT
Table 6.1: Manpower Requirement
Annual
S/n Description of Job Qualification No. Monthly Salary (Br)
1 General Manager BSc in Hotel management 1 10000 120000
2 Coordinator/supervisor BSc in Hotel management 5 6000 360000
1 Assistance Supervisor Diploma in Hotel management 5 6,000 360000
2 Receptionist Diploma in Accountant 5 5,000 300000
3 Pastry and Staff Cafeteria diploma in food preparation 5 7,000 420000
4 Cafeteria supervisor diploma in Hotel management 2 5,000 120000
5 Waiter diploma and Certificate 20 2,000 480000
6 Cooker diploma in food preparation 20 7,000 1680000
7 Coffee machine operator 12th complete 2 3,000 72000
9 Pastry attendant Certificate 5 5,000 300000
10 Coffee machine operator 12th complete 5 3,000 180000
11 Dessert attendant Skill 4 1,500 72000
12 Massage expert professional 5 5,000 300000
13 Physiotherapist Certificate 5 5,000 300000
14 Sauna /steam Bath Certificate 5 5,000 300000
15 Sauna and Steam bath Certificate 5 5,000
attendant Certificate 300000
16 Life saver 4 5,000 240000
17 Casher Certificate 4 2,500 120000
18 Cleaner vice Diploma in Accountant 8th 10 1,500 180000
19 Plumber grade complete 2 2,000
Diploma in electrical 48000
20 Electrician engineering diploma 2
in electrical 2500 60000
engineering
21 Gardener 2 1000 24000
Skill professional
22 Guards 8 96000
gardener 1500
Total 125 6,432,000
Page 51
APPENDIX 4:-IMPLEMENTATION PLAN (GANT CHART)
DESCRIPTION MONTHS(IN GREGORIAN CLANDER)
2022 2023
5 6 7 8 9 10 11 12 1 2 3 4
Acquis ion of ✓ ✓
investment
land(2022)
Opening& ✓
processing of
L/C
Building ✓
Construction
Delivery of ✓
plan
machinery
Installation ✓ ✓
and
Commissioning
Recruitments ✓ ✓ ✓
of man power
arrangement
Startup ✓ ✓
commercial
activities
Loan ✓✓
Repayment
Page 52
APPENDIX 7:- Table 7.10 Loan Repayment Schedule
Page 53
APPENDIX 8:- Table 7.12 Summary of project Annual production costs
S/n Cost item Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
1 Direct cost
1.1 Direct cost 12,360,000 12,978,000 13,626,900 14,308,245 15,023,657 15,774,840 16,563,582 17,391,761 18,261,349 19,174,417
1.3 Utilities 2,367,000 2,485,350 2,609,618 2,740,098 2,877,103 3,020,958 3,172,006 3,330,607 3,497,137 3,671,994
Subtotal 14,727,000 15,463,350 16,236,518 17,048,343 17,900,761 18,795,799 19,735,588 20,722,368 21,758,486 22,846,411
2 Administrative costs
2.1 Salary and wage 6,432,000 6,753,600 7,091,280 7,445,844 7,818,136 8,209,043 8,619,495 9,050,470 9,502,993 9,978,143
2.2 Employee benefits 1,608,000 1,688,400 1,772,820 1,861,461 1,954,534 2,052,261 2,154,874 2,262,617 2,375,748 2,494,536
2.3 Travel expense 643,200 675,360 709,128 744,584 781,814 820,904 861,950 905,047 950,299 997,814
Repair and
2.4 1,177,145 1,236,003 1,297,803 1,362,693 1,430,828 1,502,369 1,577,487 1,656,362 1,739,180 1,826,139
Maintenance
2.5 Insurance 477,973 501,872 526,965 553,314 580,979 610,028 640,530 672,556 706,184 741,493
2.6
Advertising
50,000 52,500 55,125 57,881 60,775 63,814 67,005 70,355 73,873 77,566
expense
2.7 Telephone expense 365,000 383,250 402,413 422,533 443,660 465,843 489,135 513,592 539,271 566,235
2.8
Wi fi Internet
60,000 63,000 66,150 69,458 72,930 76,577 80,406 84,426 88,647 93,080
service
2.9 Office supplies 100,000 105,000 110,250 115,763 121,551 127,628 134,010 140,710 147,746 155,133
Miscellaneous
2.1 150,000 157,500 165,375 173,644 182,326 191,442 201,014 211,065 221,618 232,699
expense
Sub total 11,063,318 11,616,484 12,197,309 12,807,174 13,447,533 14,119,909 14,825,905 15,567,200 16,345,560 17,162,838
Total cost working capital 25,790,318 27,079,834 28,433,826 29,855,517 31,348,293 32,915,708 34,561,493 36,289,568 38,104,046 40,009,249
Note: Production costs are assumed to increase by 5% annually.
Page 56
APPENDIX 9:- Projected Profit/loss statement
NABIL MUHAMMED AMAN

Al-lode Resort Hotel
Projected profit/loss statement
Table 7.14 Project Profit/loss statement
Project Year
Description 1 2 3 4 5 6 7 8 9 10
Revenue 57,390,000 60,259,500 63,272,475 66,436,099 69,757,904 73,245,799 76,908,089 80,753,493 84,791,168 89,030,726
Less: Production
25,790,318 27,079,834 28,433,826 29,855,517 31,348,293 32,915,708 34,561,493 36,289,568 38,104,046 40,009,249
costs
Gross Income 31,599,682 33,179,666 34,838,649 36,580,581 38,409,610 40,330,091 42,346,595 44,463,925 46,687,121 49,021,478
Less: Interest on
5,923,804 5,331,424 4,739,043 4,146,663 3,554,282 2,961,902 2,369,522 1,777,141 1,184,761 592,380
loan
Less: Depreciation 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731
Profit before tax 20,896,146 23,068,511 25,319,875 27,654,187 30,075,597 32,588,458 35,197,343 37,907,053 40,722,630 43,649,366
Less: Income tax
7313651.22 8073978.79 8861956.08 9678965.58 10526458.90 11405960.22 12319069.96 13267468.52 14252920.36 15277278.13
(35%)
Net Profit 13,582,495 14,994,532 16,457,918 17,975,222 19,549,138 21,182,498 22,878,273 24,639,584 26,469,709 28,372,088
Note: Sales revenue is assumed to increase by 5% annually
Page 58
APPENDIX 10:- Projected cash flow
NABIL MUHAMMED AMAN

Projected cash flow statement
Table 7.15 Project cash flow Statement
Project Year
Description
0 1 2 3 4 5 6 7 8 9 10
Cash Inflow
Equity 22,076,289 - - - - - - - - -
Bank loan 51,511,340
Revenue 57,390,000 60,259,500 63,272,475 66,436,099 69,757,904 73,245,799 76,908,089 80,753,493 84,791,168 89,030,726
Depreciation 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731
Total Inflow 73,587,629 52,610,269 65,039,231 68,052,206 71,215,830 74,537,635 78,025,530 81,687,820 85,533,224 89,570,899 93,810,457
Cash Out Flow
Fixed Cost 47,797,310 - - - - - - - - -
Initial W.C 25,790,318 25,790,318 27,079,834 28,433,826 29,855,517 31,348,293 32,915,708 34,561,493 36,289,568 38,104,046 40,009,249
Loan Repayment 5,151,134 5,151,134 5,151,134 5,151,134 5,151,134 5,151,134 5,151,134 5,151,134 5,151,134 5,151,134
Total Out flow 73,587,629 30,941,453 32,230,968 33,584,960 35,006,651 36,499,427 38,066,842 39,712,627 41,440,702 43,255,180 45,160,383
Net Inflow - 21,668,816 32,808,263 34,467,246 36,209,178 38,038,207 39,958,688 41,975,192 44,092,522 46,315,718 48,650,075
Cumulative
- 21,668,816 54,477,079 88,944,325 125,153,503 163,191,711 203,150,399 245,125,591 289,218,113 335,533,832 384,183,906
balance
Page 59
APPENDIX 11. BALANCE SHEET
NABIL MUHAMMED AMAN

Balance sheet
Current asset
Raw cost and utilities 12,360,000
Utilities 2,367,000
Administrative costs
Salary and wage 6,432,000
Employee benefits 1,608,000
Travel expense 643,200
Repair and maintenance 1,177,145
Insurance 477,973
Advertising expense 50,000
Telephone expense 365,000
Wi fi Internet service 60,000
Office supplies 100,000
Miscellaneous expense 150,000
Subtotal 11,063,318
Fixed cost
Land development 2,533,917
Building & Constructions 23,143,475
Machinery and equipment 17,069,918
Procurement of Vehicles & furniture’s 5,050,000
Total fixed cost 47,797,310
Total asset 73,587,629
Liabilities
Bank loan 51,511,340.23
Owners Capital 22,076,288.67
Total liabilities and capital 73,587,628.90
Page 60
APPENDIX 12:- Viability and other measurement
NABIL MUHAMMED AMAN

Financial IRR computation
Table 7.16 Financial IRR computation
Year 0 1 2 3 4 5 6 7 8 9 10
Gross income 57,390,000 60,259,500 63,272,475 66,436,099 69,757,904 73,245,799 76,908,089 80,753,493 84,791,168 89,030,726
Total costs 73,587,629 25,790,318 27,079,834 28,433,826 29,855,517 31,348,293 32,915,708 34,561,493 36,289,568 38,104,046 40,009,249
Gross profit -73,587,629 31,599,682 33,179,666 34,838,649 36,580,581 38,409,610 40,330,091 42,346,595 44,463,925 46,687,121 49,021,478
less: Profit tax 11,059,889 11,612,883 12,193,527 12,803,203 13,443,364 14,115,532 14,821,308 15,562,374 16,340,493 9049001.6
After tax net benefit -73,587,629 20,539,793 13,478,615 13,976,013 14,503,150 15,061,512 14,873,630 15,596,585 16,355,688 17,152,746 17,989,656
DF at 35% rate 1 0.741 0.549 0.406 0.301 0.223 0.165 0.122 0.091 0.067 0.05
Present Value -73,587,629 42,525,990 33,082,466 25,688,625 19,997,266 15,556,013 12,085,557 9,382,787 7,348,568 5,681,008 4,451,536
Net present Value 102,212,186 - - - - - - - - - -
DF at 30% rate 1 0.769 0.592 0.455 0.35 0.269 0.207 0.159 0.123 0.094 0.073
Present Value -73,587,629 44132910.0 35673624.0 28788976.1 23252634.6 18764876.1 15161880.4 12228386.1 9932679.7 7970369.8 6499243.0
Net present Value 128,817,951 - - - - - - - - - -
Page 61
APPENDIX 13:- PROBLEM TREE
LOW
PROFITABILITY
RATE
LOWER LOW DEMAND

LOW INCOME STANDARD FOR
LEVEL OF LIVING RECRATION
LOW LOW UNDERDEVELOPEMENT PLOTICAL

GDP INFRASTRUCTURE OF TOURISM SECTOR INSTABILITY
APPENDIX14:- OBJECTIVE TREE
MAXIMIZING PROFIT
EFFICIENT CUSTOMER EFFECTIVE

End
COST SATISFACTION HOTEL
MANAGEMENT MANAGMENT
QUALITY IMPROVED EXPANDING EXPANDING

SERVICE STAFF CUSTOMER SERVICE
SERVICE BASE BASES Means
63
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Abduselam Aliyi Project Proposal

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PROJECT PROPOSAL ON AL-LODE I N T E R N A T I O N A L HOTEL AND RESORT

Project Location: - Oromia Region, West Arsi

Promoted by: NABIL MUHAMMED AMAN

➢ Name of the Promoter: Nabil Muhammed Aman

Contact Address: 0910824534

➢ Type of the Project: A L - L O D E I N T E R N A T I O N A L H O T E L A N D R E S O R T

➢ Type of Business: Sole proprietor ship

estimated at 73,571,629 dollar of which:-

• Birr 47,797,310 (65%) is for fixed investment cost

• Birr 25,774,318 (35%) 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 22,071,488(30%) is contributed by the promoter (Nabil

• Birr 51,500,140 (70%) is to be financed by local banks.

➢ Man power requirement: 300 employees will be benefited within this

grade) and 175 casual workers during construction phase.

The project feasibility study proposed on Al-lode international resort

Project justification: Al-lode International resort is high class resort where

The total area of the Al-lode international resort investment is about

The total investment capital of the project is estimated at birr

Profitability: The financial analysis of the envisaged project is carried

projections using the income statement, cash flow statement and

financial internal rate of return (FIRR), the following results are

▪ Income statement: According to the projected income statement,

operation. Based on the 10 years financial projections the projects

average annual net profit after payment of bank interest,

depreciation and tax amounts to birr 13,593,732

Generate revenue to government in the form of taxes, Facilitate and give

a good service for local and international tourists

▪ Conclusion and recommendation: The Project is found to be

operationally profitable, viable & has significant socio-economic

benefits. We recommended that according to this attractive financial

institutions should give their support to facilitate the implementation

2.1. Investment in Ethiopia

However, the passed command economy system and the lack of

Ethiopia has vast potential for development of various economic sectors.

Although Ethiopia is endowed with many natural and manmade tourist

By taking this encouraging as an opportunity the promoter project plan to

2.3. Promoter Background

The promoter, Nabil Muhammed has a work experience in different

2.4. Ambition of creating the R e s o r t project

Purpose and amount of loan requested: The purpose of the loan is to

3.1. Project description and Justification

A hotel is an establishment that provides paid lodging on a short-term basis.

3.2. Project Objective

The main objective of the project is aimed at to maximize the return on

In general, the project is believed to have significant social and economic

4.1. General Overview

The hotel industry consists of many different services, including

According to the United Nations Statistical Commission, Tourism

The total number of international tourists arriving in Ethiopia is steadily

Table 4.1 Total Tourist arrivals in Ethiopia

Year Number Growth Rate

4.2. Present supply in Ethiopia

Table 4.2 international standard hotels in Addis Ababa

S/N Name of Hotels in Ethiopia Number of

Accordingly, assuming 365 working days, currently international

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

Projection o f Room Night Existing Hotels UN

Accordingly, based on the market study and other considerations a five

4.3. Demand for hotel services

Ethiopia achieved an occupancy of 58% at an average daily rate of USD

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