Girum Resort

GIRUM RESORT HOTEL* ****
South Nation Nationality Regional State

Hawassa City Administration
Promoter :- Ato Lema Kameiso
5/13/2017
INVESTMENT PROPOSAL
GIRUM RESORT HOTEL
FIVE STAR HOTEL STANDARD
Page 1 of 38
1 PART-I . PROJECT ID
The Applicant
Promoter Ato Lema Kameiso
Region: South Nation Nationality Regional State,
Zone: Hawassa City Administration
Nationalities Ethiopian
The Project
Name Girum Resort Hotel
Address:
Region: South Nation Nationality Regional State
Zone: Hawassa City Administration
Project Details
Type of the project Five Star Hotel
Products To offer a complete package five star hotel standard of lodging and dinning ,
recreational amenities for tourists/visitors
Status of the business: New
Investment Request
Date of Applications June 30.2016
Deal Manager Ato Lema Kameiso

Extent(Current) 2,100 m2 ( 700 m2 are owned and 1400 m2 )
2
Future ( Plan) 2000 m
Page 2 of 38
Description of  To serve as a place where tourists, visitors, vacationers and leisure

Project /Purpose travelers could stay overnight, dine, and enjoy the breathtaking view of
Hawassa Lake’s city side shore of the lake with various endemic birds
and tourisms attractions.
 To offer a complete package five star standard resort and hotel for
tourists/visitors,
 130 bed rooms
 55 Single, 45 Classic, 25 Family , and 5 Suite
 And conference hall for different clients for holding
meetings/seminars.
 Will have also healthiness and recreational facilities like
 Sauna and massage
 Gymnasium and Swimming Pool
 Children Play Ground
 Beauty salon, shops, and front desk services.
 Travel Agency
Benefiters of the project JOB CREATIONS = 63 Employees
Project Duration One Year
Project Investment cost 45.16 million Et.Birr,
14.40 Million Et.Birr is in foreign currency
Is estimates as Project Investment Cost for the establishment of the Project,
Project Source of Finance : Project will be partial finance from bank loan
30 % Entrepreneurs Equity (Cash)……. Birr 13.67 Million Birr
70 % Loan……………………..………. Birr 31.48 Million Birr
Page 3 of 38
Contents
1 PART-I . PROJECT ID .................................................................................................................. 2
2 EXECUTIVE SUMMARY ............................................................................................................... 6
3 INTRODUCTION ......................................................................................................................... 9
3.1 PROJECT BACKGROUND .................................................................................................... 9
3.2 HE PROJECT. ................................................................................................................... 10
3.2.1 Purpose of the project.............................................................................................. 10
3.2.2 Objective and scope of the project. .......................................................................... 10
3.2.3 Strategies ................................................................................................................ 10
3.2.4 Product and services ................................................................................................ 10
3.3 CURRENT INDUSTRY AND MARKETING OVERVIEW ......................................................... 11

3.4 HAWASSA TOURISM TREND ............................................................................................ 12
3.5 HOTEL STATISTICS OF HAWASSA ..................................................................................... 12
4 TECHNICAL ANALYSIS ............................................................................................................... 13
4.1 LOCATION DETAILS ......................................................................................................... 13
4.2 LOCATION ADVANTAGES ................................................................................................ 14
4.3 LAND UTILIZATION PLAN................................................................................................. 14
5 PROJECT ORGANIZATION AND MANPOWER REQUIREMENT .................................................... 15
5.1 FORM OF BUSINESS ........................................................................................................ 15
5.2 ORGANIZATIONAL STRUCTURE ....................................................................................... 16
5.3 PRE-OPERATING ACTIVITIES ............................................................................................ 18
6 SOCIO-ECONOMIC BENEFITS AND JUSTIFICATION .................................................................... 19
6.1 EMPLOYMENT AND INCOME GENERATION ..................................................................... 20
7 ENVIRONMENTAL IMPACTS OF RESORT ................................................................................... 21
8 FINANCIAL BUDGET ................................................................................................................. 22
8.1 TOTAL CAPITAL REQUIREMENT ....................................................................................... 22
8.2 SOURCE OF FINANCE ...................................................................................................... 22
8.3 RETURN OF PROJECT INVESTMENT ................................................................................. 22
9 ANNEXURE............................................................................................................................... 23
9.1.1 Land acquisitions and development cost .................................................................. 23
Page 4 of 38
9.1.2 Civil works & buildings ............................................................................................. 23
9.1.3 Machinery & equipment. ......................................................................................... 24
9.1.4 Furniture & Fixture .................................................................................................. 25
9.1.5 Motor Vehicle .......................................................................................................... 25
9.1.6 Pre-production costs ................................................................................................ 25
10 FINANCIAL ANALYSIS................................................................................................................ 26
10.1 REVENUE ASSUMPTIONS ON AND PROJECTIONS ............................................................ 26
10.1.1 Rooms Revenues ...................................................................................................... 26
10.1.2 F&B Revenues .......................................................................................................... 28
10.1.3 Other Operation Departments Revenues ................................................................. 30
10.2 COST PROJECTIONS ......................................................................................................... 31

10.2.1 Cost of goods sold .................................................................................................... 31
10.2.2 Total General & Administrative Exp ......................................................................... 32
10.4 FINANCIAL PROJECTIONS ................................................................................................ 33

10.4.1 Projected income statement (‘000 birr) .................................................................... 33
10.4.2 Projected balance sheet (‘000 birr) .......................................................................... 34
10.4.3 Projected cash flow statement (‘000 birr) ................................................................ 35
10.4.4 Payback period internal rate of return ..................................................................... 36
10.5 FINANCIAL RESULTS AND VIABILITY ................................................................................ 37

10.5.1 Profitability .............................................................................................................. 37
10.5.2 Cash flow statement and balance sheet ................................................................... 37
10.5.3 Payback period ........................................................................................................ 37
10.5.4 Internal rate of return and net present value ........................................................... 38
Page 5 of 38
2 EXECUTIVE SUMMARY
The present investment proposal study is established with view to establish new business of
promoter , at Hawassa town , by Ato Lema Kameiso The study objective is twofold to be
used as a basis for developing the envisaged Girum Resort Hotel (Class "Five Star Hotel “) and to
seek Investment license, investment land permit . The investment land has extent of 2,100 m2 at
Hawassa town near the lake side view at Tabor Sub City. The prompter owns 700 m2 out of the
total land.
The proposed project is specialized in commercial resort hotel industry with five star resort hotel
supply products of 130 guest rooms, restaurant and bar facility which can serve 500 persons,
conference room, sauna and steam, and boots service at 2,100 m2 area at lake side of Hawssa
The present number of tourists expected to visit the region for the proposed service-rendering
project is estimated at 2,190 persons and it is projected to reach at 3,832 persons by the
year 2019. The resort will mainly target domestic and foreign tourist travels along the southern
tourist’s circuit route and also,
 Indigenous affluent Ethiopians seeking to escape from daily routine of work, home and
urban life.
 Local foreign residents working with Non-government organizations, foreign missions and
business.
 Local newly married couples seeking beautiful places to spend honeymoon time.
 Foreign tourists from seeking to have the sun, lake side resorts and admire Nationality
Museum of Ethiopia, SNNPRS people
 Corporate organizations seeking for quiet places for retreats.
 Business people with differing interests
 Hawassa and nearby residents how want to have marriage ceremony at garden
The Resort Hotel investment cost is ET. Birr 46 million. The allocation of investment cost is mainly
on Site and building development accounts 50% of total investment. The built up are of buildings
covers 1,100 m2 from the total of requested investment land. The breakdown of total investment
(‘000 Birr) is follows,
Page 6 of 38
Wor Capit 5,000
Pre-prod 2,590
Vehecles 2,050
Furniture 4,564
Machinery 7,846
Buildings 22,576
Land 538
0 5,000 10,000 15,000 20,000 25,000
The financial studies show the resort provides an internal rate of return (IRR) of 50% and a payback
period of 4 years. These results demonstrate that the project is viable and provides healthy returns
to the promoters.
Some of social economic benefits
 The project will employ 63 workers in permanent employment bases for more than 10 casual
laborers every year.
The envisage resort will contribute to the national economy by,
 increasing the foreign exchange income of the country by directly or indirectly
contributing to the tourism industry of the county
 Benefit from the tax of the hotel operations.
 Benefiting all the actors’ in the chain of tourism industry from the rural community at
tourism site to tour operators, traveler agency owners, and others who participate in the
chain will benefit from this project.
Other Strategic Significance of Project
 Hotel and Tourism industry plays important role in economic development of the
country by creating revenue tax from occupancy and other tourism activities in the
hotel chain.
 The tourism sector is growing fast and stands as the third foreign exchange earner,
following coffee and oilseeds.
Page 7 of 38
 The Travel and Tourism Industry contributes GDP 1426 (US$ million) or 9.2 % of the the total
GDP, and create 7.2% of the job opportunity of the country in the year 2007.
 Increase the present number of of the international standard hotels and Resort outside
Addis Ababa the capital city of Ethiopia.
Some of opportunities and government strategies considered by the owner when planning to
invest of Resort are,
 Strong effort is underway to improve Ethiopia’s image for the world tourists,
 The government commitment to use tourism industry for the fight against poverty,
 The long-term vision of the government is to make Ethiopia one of the top ten tourist
destinations in Africa by the year 2020, with an emphasis on maximizing the poverty-
reducing impacts of tourism,
 The demand supply gap of Hotel industry in large and shortage of tourist standard
hotel and Resort around lake Hawassa ,
To full fill his desire after looking the gaps and opportunities Ato Lema Kameiso has Proposed
New Investment of GIRUM Resort Hotel over 2,100square meter area and investment of Et. Birr
45 million birr for the envisaged project
Page 8 of 38
3 INTRODUCTION
3.1 PROJECT BACKGROUND
Hotel and Tourism industry plays important role in economic development of the country by
creating revenue tax from occupancy and other tourism activities in the hotel chain. The tourism
sector is growing fast and stands as the third foreign exchange earner, following coffee and
oilseeds.
The Travel and Tourism Industry contributes GDP 1426 (US$ million) or 9.2 % of the the total GDP,
and create 7.2% of the job opportunity of the country in the year 2007. The study conducted by
World Bank forecasted the tourism and travel industry will grow at the rate of 4% from 2007-2017.
Ninety percent of the international standard hotels are located at Addis Ababa the capital city of
Ethiopia.
The study conducted by World Bank- Pro-Tourism Strategy of Ethiopia, Japan-Embassy Hotel
Industry Study, and SNNPRG tourism strategy shows that un-availability of international standard
outside Addis Ababa along the tours circuit is one of the major problem for the development of
tourism industry of Ethiopia. Various studies also shows that the supply of bed rooms of Ethiopia is
least when compared to other African courtiers how has highest income from tourism sector but
with lowest number of tourist attraction heritage and natural resources cites.
The hotel industry and tourism growth expected to be increased due to the following development
observed at the senior and potentials,
 Ethiopian Air Lines provides international flights and connections to most parts of the
world. Ethiopia is reasonably well connected by international flights and Ethiopian Air Lines
has one of the best reputations amongst African national airlines (World Tourism
Organization, 2004).
 Presence of various International organizations has their offices in Addis Ababa.
 Strong effort is underway to improve Ethiopia’s image.
 The government is committed to use tourism in the fight against poverty
 The involvement of the private sector, community and donor agencies is growing
significantly.
 Ethiopia is still an untouched country and many tourists recommend visits to Ethiopia
Page 9 of 38
 The long-term vision of the government is to make Ethiopia one of the top ten tourist
destinations in Africa by the year 2020, with an emphasis on maximizing the poverty-
reducing impacts of tourism.
Having in to considerations all above bright opportunities, demand supply gap of Hotel industry,
and location advantages of Hawassa being one of tourist destination , location advantage of being
on tourist circuit paths of Southern Ethiopia, and tourism attraction potential of Hwassa lake , Ato
Lema Kameiso has planed and started the the envisaged Resort Hotel Investment Project over
the area of 2,100m2 at the side of Hawassa lake .
3.2 HE PROJECT.
3.2.1 Purpose of the project
 To serve as a place where tourists, visitors, vacationers and leisure travelers could
stay overnight, dine, and enjoy
 To offer a complete package Five star resort and hotel lodging , dining , and
recreational services for tourists/visitors to international and domestic ones .
3.2.2 Objective and scope of the project.

The prime Goal is to be food sufficient and others include:-
 To maximize the owners profit earning from over all activities of the project,
 To generate foreign exchange by tourism products sales ,
 To fulfils Government plan targets 2020.
3.2.3 Strategies
In order to realize objectives the overall development program will incorporate the following major
strategies in relation to this envisaged project.
 First the certificate of investment and land is received to the project
 Temporary fencing and landscape works followed with building constructions
 The required machineries for the activities of the project are purchased and imported
 Furnishing with different cultural and modern furniture’s
 Employing of 66 employees and training
 Launch different marketing and promotional activities
 Start up
3.2.4 Product and services
GIRUM Resort Hotel **** will have a plan to provide accommodation and amenities.
 130 different design single . classic family and , suites, rooms
 Assembly Hall
Page 10 of 38
 Sauna with reception, bath, rest room, changing room , and foot bath facility
 Gymnasium with international standard machinery and other facility
 Swimming pool
 All other Service required for Five sitar hotel standard of SNNPRS
 Beautifully landscaped gardens, which will host host weddings, meetings, seminars or other
events.
 Restaurant with bar, Laundry services ……
3.3 CURRENT INDUSTRY AND MARKETING OVERVIEW

Tourism is vital for the Ethiopia economy providing 9.2 % of GDP and 7.1 % of the total employments
in year 2007 according to World tourism organization report valued at around US$ 1426 million.
The long-term vision of the government is to make Ethiopia one of the top ten tourist destinations
in Africa by the year 2020, with an emphasis on maximizing the poverty-reducing impacts of
tourism.
The basis of Ethiopia’s tourism product is cultural, historical and natural sites. This demand of
tourism products of Ethiopia could be split into two distinct product identities, a) a northern
historic circuit and b) a southern ethnological and nature based circuit. These two products
account for more than 95% of tour packages sold to Ethiopia
Fig 3-1 Tourism circuit of Ethiopia
Page 11 of 38
International tourist arrival to the Region has shown a gradual growth every year. Most
international tourist comes to the SNNPRS to appreciate the untouched culture of the diverse
ethnic communities and the associated natural attractions. The ethnic communities in Debub Omo
including Hammer, Bena, Mursi, Ari and their cultural practices as well as the Dorze and Konso
people cultural practice are very well-known and visited by many foreigners. Besides, NechSar and
Mago National Parks are among the natural attraction found along the destinations visited by the
tourist together with the cultural practices of the communities.
In the recent years, the tourism sector in SNNPRS is encouraging and shows a promising
performance. The great promotion made for the Ethiopian millennium had stimulated many
Ethiopian Diasporas and foreigner to visit the country in 2008. Tourism earning in the region
increases by 46.6 % from 12,739995 Birr in 2007 to 23, 852410 Birr in 2008 (almost 50% increment).
3.4 HAWASSA TOURISM TREND

This growth rate in tourist arrivals in 2006/7 to 2007/8 due to Ethiopian millennium quite impressive
at 208% compared to the growth rates achieved in 2008/9 to 2009/10 which is 31 %. The average
annual growth of tourists flow to Hawassa town has shown 70 % at national tourist’s arrivals and 93
% at foreign tourist’s arrivals
Table 3-1: Summary of International Tourists by Purpose of Visit 2001-2005
Year Nationals arrivals Foreigner arrivals Total
No % increase No % increase No % increase
2006/7 19136 2532 21668
2007/8 57904 203% 8868 250% 66772 208%
2008/9 45212 -22% 8674 -2% 53886 -19%
2009/2010 58405 29% 12452 44% 70857 31%
Average 45164 70% 8132 97% 53296 73%
Source: Hawassa City Tourism Office
3.5 HOTEL STATISTICS OF HAWASSA

The following table shows major hotels currently operating at Hawassa and that could have a
market share with the envisage hotel are listed at regional tourism bureau information’s and
adding additional hotels not included in the tourism bureau information but found by market
research survey of the consultants. The total number of establishment is 19 in number, 735 rooms,
Page 12 of 38
only considered as compotators. The list of other hotels with amentias is attached at annexed
documents.
TABLE 3-2 HOTEL ROOM SUPPLY AT HAWASSA-2010
NAME OF HOTEL NO OF BRANCH NO OF ROOM NO OF BED
Central Hotel 1 12 12
Lewi Hotel 3 130 130
Yamare Hotel 1 55 55
United Africa Group Shebele Hotel 1 49 49
Awassa Wabe Shebele Hotel 1 40 40
Pinna Hotel 1 67 67
Blue Nile Hotel 1 18 18
Paradize Hotel 1 34 34
South Spring Hotel 1 32 32
Gebrekirstos Hotel 1 44 44
Tadesse Enjory Hotel 1 57 57
Haroni International Hotel 1 32 32
Oasis International Hotel 1 18 20
Haile Resort 1 112 120
Chembelala Resort 1 31 31
Hawassa In International hotel 1 23 23
Hawassa View Hotel 1 24 24
Blue Nile-Evening Star Hotel 1 25 25
20 803 813
Source : SNNPRS-Tourism Bureau and Consultant Survey
Gezehen/Elefensh, Kerawed, South Star, Goldyase, and some new establishment data not included here.
4 TECHNICAL ANALYSIS
4.1 LOCATION DETAILS
The project is located at Ethiopia, SSNPRS , and Hawassa town. Hwassa town is the capital city of
the Southern Nation Nationalities and Peoples Regional State located at the 275 km. south of Addis
Ababa. It lies at an elevation of 1680 m.a.s.l and has a plain topography. The city, which is the
economic and cultural hub of the region, has a total area of about 50 km2 divided in to 8 sub-towns
Page 13 of 38
(kifle ketema) and 32 kebeles. The total population of the town (in 2008) is estimated about 300
thousand. The town full fills all infrastructural facilities vital for any type of investment.
4.2 LOCATION ADVANTAGES
Commercial, business, infrastructure advantages being at Hawassa town capital city of SNNPRS.
 Being located at along the international high way of Addis- Moyal;
 Availability of well developed social and economic infrastructure facilities such as modern
telecommunication, electric power, higher education and financial institutions, etc.
 The presence of abundant, easily trainable and inexpensive labor force in the city and
surrounding rural area;
 An ideal transit spot for tourists;
 Site location on the shores of the beautiful Lake Hawassa
 The availability of abundance and variety of the lake’s birdlife
 Presence of hippos across the lake for visitors how tours at the lake with boats.
 The sun sets over the volcanic hills to the west of the lake are most rewarding pleasures for
guests.
 The new Hawassa airport and industry park has also significant impact
 The availability of Hawassa Lake and city which attract international and domestic tourists.
4.3 LAND UTILIZATION PLAN
The total land area is assumed to be 2,100 m2. The following table shows the proposed space
program with the various planned outlets and their respective areas in square meters.
Table 4-1 GENERAL LAND UTILIZATION PLAN

S P A C E P RO G RA M PERCENTAGE T O T A L( M 2)
Total Project Area 2,100.00
Main terrace Building 23% 480.00
Other Buildings 10% 210.00
Children Play Ground 10% 200.00
Out Door Game 10% 120.00
Parking Lost 26% 546.00
Access Road 10% 210
Garden 15% 315
GRAND TOTAL 2,081.00
2,100
The total G+ 6 building space program shows that building has 3,175 m2 built up area. The following
table shows the proposed space program with the various planned outlets and their respective
areas in square meters.
Table 4-2 G+ 6 S P A C E P RO G RA M UTILIZATION PLAN

ACCOMMODATION QT AREA( M2) TOTAL ( M2 )
GROUND FLOOR
Page 14 of 38
Restaurant 1 200 200

Reception+ Lobby 1 120 120
Pastry 1 100 100
Travel Agency 1 20 20
Souvenir Shop 1 16 16
Beauty Salon 2 12 24
480
First Floor
Massage and Spa 2 100 200
Gymnasium 1 120 120
Assembly Hall 01 1 160 160
480
SECOND FLOOR TO 5 TH FLOOR
SINGLE BED 11 15 165
CLASSIC ROOM 9 18 162
FAMILY ROOM 5 22 110
SUITE 1 20 20
Line Room 1 12 12
Room Service 1 11 11
480
6 TH FLOOR
Swimming Pool 1 300 300
Bar restaurant and kitchen 1 120 120
Open Area View Lake 1 60 60
Others Buildings
Administration Blocks 1 25 25.0
Service with laundry, Storage, and maintence facility 2 25 50.0
Staff Kantian and Changing Room 2 50 100.0
Kitchen, Butchery, Cold Room 1 120 120.0
295
Sub Total of Built Area 3,175
5 PROJECT ORGANIZATION AND MANPOWER REQUIREMENT

5.1 FORM OF BUSINESS
The business will is categorized Lake Side Resort of Commercial Resort Hotel ( Class Five Star Hotel
) Industry and is planned to registered under the name “GIRUM Resort Hotel ”. The firm is as a
proprietorship and owned by the Ato Lema Kameiso. .
Page 15 of 38
5.2 ORGANIZATIONAL STRUCTURE

After a thorough assessment of the organizational structures of the existing similar hotel industry
and the advice given by the selected expertise in Hotel management fields and after revise of
standards of the Country in the criteria of Five sitar hotel, the consultant has proposed the
following organizational structure and following manpower
Figure 5-1 : organizational structure of the hotel
ROOMS DEPARTEMNT
HOTEL MANGER F & B DEPARTEMNT
ADMINSTRATION AND
MANGER OFFICE OTHER SERVICES
ACCOUNT
MARKETING AND SALES
Page 16 of 38
Table 5-1 Manpower Requirements Estimate
EDUCATIONAL LEVEL EXPERIENCE NO OF

Title/Designation
EXPERIENCE (YEAR) PERSONS
MANAGER OFFICE
General manager BA in Hotel Managements 8 1
Accounts/Admin Officer BA in Accounting 3 1
Residents Hotel manager BA in Hotel Managements 5 1
Secretary casher Dip. In office management. 2 1
Messenger and cleaner 8th grade 1 1
Sub-Total 5
ADMINISTRATION AND ACCOUNTS
Accounting Clerk Diploma in Book Keeping 2 2
Purchaser Dip. Purchasing and Supply 0 1
Driver 3rd Grade License 2 4
Store Certificate in store management 2 1
Sub-Total 8
Maintence and Security
Plumber TVT Collage 10+ 3 1 1
Electrician TVT Collage 10+ 3 1 1
Guard Experience 5
Technician 10+3 Building constructions 2 1
Gardener Certificate 2 2
Sub –total 10
MANAGEMENT AND ADMINISTRATIONS TOTAL 13
HOTEL SERVICE
Front Office Manager Dip. in Hotel Managements 2 2
Receptionist Certificate In hotel management 2 2
House Maid 8th grade 2 6
Laundry Machinist TVT Collage 10+ 3 2 1
Laundry Assistant Experience 2 2
Sub-Total 13
FOOD AND BEVERAGE
Food & Beverages Chef Diploma in food preparations 2 1
Assistant chefs Certificate in food preparation 2 2
Cooks Certificate in food preparation 2 1
Stewards /Waiters Certificate 2 14
Butchery Experience 1 1
Sub-Total 19
Page 17 of 38
TITLE/DESIGNATION EDUCATIONAL LEVEL EXPERIENCE NO OF

EXPERIENCE (YEAR) PERSONS
OTHER SERVICES
Other Services manger Dip. in Hotel Managements 2 1
Gym Trainer Certificate 2 1
Spa and sauna Certificate 2 3
Taxi Driver 3rd Grade License 2 2
Sub-Total 10
HOTEL SERVICE AND PRODUCTION TOTAL 39
MARKETING AND SALES OFFICE
Marketing officer B.sc in Marketing Management 2 1
1
HOTEL SERVICE AND PRODUCTION TOTAL 63
5.3 PRE-OPERATING ACTIVITIES

During the implementation period of the envisage Commercial Loge and Resort project
implementation the different activities likely to be undertaken have been classified as follows based
on activities category and schedule in one-year period as shown in the activity chart shown at Fig -5
Figure 5-2: Gant Chart of Pre-operating Activities
year and months
ACTIVITIES
1 2 3 4 5 6 7 8 9 10 11 12
Preparation phase -1
Acquiring investment certificate
Finalizing the necessary formalities and
securing the land
Preparing Design and BOQ
Machineries , Vehicle, and Equipment Bid
Construction phase
Site work
Building and Site Work
Preparation Phase-II
Purchase Machineries and Equipments
Manpower recruitment
Training to Technical Staff
Preparation to Service –Marketeering and
Inaugurations
Full Scale Services
Page 18 of 38
6 SOCIO-ECONOMIC BENEFITS AND JUSTIFICATION

Based on the earlier assessment and analyses, we can learn that the proposed project possesses a
wide range of benefits that complement the financial feasibility obtained later. The project has
various socio-economic benefits in that it would generate profit to the promoters; provide
employment opportunity, increasing the foreign exchange income, Benefiting all the actors’ in the
chain of tourism industry. Some of these benefits are briefed as follow:
Some of social economic benefits
 The project will employ 63 workers in permanent employment bases for more than 10 casual
laborers every year.
The envisage resort will contribute to the national economy by,
 increasing the foreign exchange income of the country by directly or indirectly
contributing to the tourism industry of the county
 Benefit from the tax of the hotel operations.
 Benefiting all the actors’ in the chain of tourism industry from the rural community at
tourism site to tour operators, traveler agency owners, and others who participate in the
chain will benefit from this project.
Other Strategic Significance of Project
 Hotel and Tourism industry plays important role in economic development of the
country by creating revenue tax from occupancy and other tourism activates in the
hotel chain.
 The tourism sector is growing fast and stands as the third foreign exchange earner,
following coffee and oilseeds.
 The Travel and Tourism Industry contributes GDP 1426 (US$ million) or 9.2 % of the the total
GDP, and create 7.2% of the job opportunity of the country in the year 2007.
 Increase the present number of of the international standard hotels and Resort outside Addis
Ababa the capital city of Ethiopia.
Page 19 of 38
6.1 EMPLOYMENT AND INCOME GENERATION

Table 6-1 Salary income of proposed positions
Title/Designation NO OF SALARY
PERSONS Monthly Annual
MANAGER OFFICE
General manager 1 6,000.00 72,000.00
Accounts/Admin Officer 1 3,000.00 36,000.00
Residents Hotel manager 1 3,000.00 36,000.00
Secretary casher 1 2,000.00 24,000.00
Messenger and cleaner 1 800.00 9,600.00

Sub-Total 5 177,600.00
ADMINISTRATION AND ACCOUNTS
Accounting Clerk 2 2,000.00 48,000.00
Purchaser 1 2,000.00 24,000.00
Driver 4 1,500.00 72,000.00
Store 1 1,200.00 14,400.00
Sub-Total 8 158,400.00
Maintence and Security
Plumber 1 1,200.00 14,400.00
Electrician 1 1,200.00 14,400.00
Guard 5 900.00 54,000.00
Technician 1 1,200.00 14,400.00
Gardener 2 800.00 19,200.00
Sub –total 10 116,400.00
MANAGEMENT AND ADMINISTRATIONS TOTAL 13 452,400.00
HOTEL SERVICE
Front Office Manager 2 2,000.00 48,000.00
Receptionist 2 1,200.00 28,800.00
House Maid 6 800.00 57,600.00
Laundry Machinist 1 1,200.00 14,400.00
Laundry Assistant 2 1,000.00 24,000.00
Sub-Total 13 172,800.00
FOOD AND BEVERAGE
Food & Beverages Chef 1 2,000.00 24,000.00
Assistant chefs 2 1,500.00 36,000.00
Cooks 1 1,200.00 14,400.00
Stewards /Waiters 14 800.00 134,400.00
Butchery 1 800.00 9,600.00
Sub-Total 19 218,400.00
Page 20 of 38
Title/Designation NO OF SALARY
PERSONS Monthly Annual
OTHER SERVICES
Other Services manger 1 2,000.00 24,000.00
Gym Trainer 1 1,500.00 18,000.00
Spa and sauna 3 1,500.00 54,000.00
Taxi Driver 2 1,200.00 28,800.00
Sub-Total 7 124,800.00
HOTEL SERVICE AND PRODUCTION TOTAL 39 516,000.00
MARKETING AND SALES OFFICE
Marketing officer 1 3,000.00 36,000.00

1 36,000.00
HOTEL SERVICE AND PRODUCTION TOTAL 63 1,004,400.00
Consequently the project creates income of Birr 1,004,400.00 per year. This would be one of the
commendable accomplishments of the project.
7 ENVIRONMENTAL IMPACTS OF RESORT

Tourism, as any other economic activity, impacts the environment. Some the major impacts are as
follows
 Some of operational phase impacts at similar resorts
 The high consumption of fuels, electricity, food and water, the generation of solid
waste and the emission of pollutants confirm
 Loss or imbalance of fauna and flora biodiversity, including areas of ecological interest.
 Reduction or shortage of quality water from public supplies to meet the demands of
touristic enterprises.
 Sanitary problems due to the production of solid waste and the problematic of its
disposal, and also the generation of residuary water (effluents), especially in protected
areas.
 Pollution of water
 Construction period impact- during constructions
Environmental Impact Assessment (EIA) poses as a widely spread tool, potentially efficient in the
prevention of environmental damage and in the promotion of sustainable development will done
prior to with project design. The impact mitigation measures and monitoring plan will keep the
Environment GIRUM Resort Hotel
Page 21 of 38
8 FINANCIAL BUDGET
8.1 TOTAL CAPITAL REQUIREMENT
PROJECT ECONOMICS
CAPITAL COSTS Et Birr
Land acquisitions and development cost 537,760
Site and Buildings 22,576,225
Machinery & equipment. 7,846,364
Furniture & Fixture 4,564,000
Motor Vehicle and Boat 2,050,000
Pre-production costs 2,589,960
40,164,309
Working Capital 5,000,000
5,000,000
CAPITAL INVESTMENT + WC 45,164,309
8.2 SOURCE OF FINANCE

DESCRIPTION EQUITY BANK LOAN BANK LOAN
Land acquisitions and development cost 537,760 0 537,760
Civil works & Buildings 6,772,868 15,803,358 22,576,225
Machinery & equipment. 2,353,909 5,492,455 7,846,364
Furniture & Fixture 1,369,200 3,194,800 4,564,000
Motor Vehicle and Boat 615,000 1,435,000 2,050,000
Pre-production costs 776,988 1,812,972 2,589,960
Working Capital 1,250,000 3,750,000 5,000,000
13,675,725 31,488,584 45,164,309
Percentage Share 30.3% 69.7% 100.0%
8.3 RETURN OF PROJECT INVESTMENT

PROJECT RETURN BEFORE TAX
NPV ( Birr ‘000) 172,474
IRR 55%
PAYBACK PERIOD( Years) 4
Page 22 of 38
9 ANNEXURE
9.1 INVESTMENT COSTS BREAK DOWN
9.1.1 Land acquisitions and development cost
Cost item UOM Qan. Unit cost Total cost (Birr)
Land accusation Lease Payment m2 2,100 0.80 7,560
Temporary Fence Buildings Ml 440 125 55,000
Eclectic Power Birr 1 450,000 450,000
Site clearing to remove tree and shrubs M2 2,100 12 25,200
Sub total 537,760
9.1.2 Civil works & buildings

COST ITEM UOM QAN. UNIT COST TOTAL COST (BIRR)
1. BUILDING
Ground Floor M2 480.00 6,000.00 2,880,000.00
First to 6th Floor M2 2,400.00 5,000.00 12,000,000.00
14,880,000.00
2. OTHER BUILDINGS
Service with laundry, Storage, and M2 295.00 3,800.00 1,121,000.00
maintence facility
Land scope design and garden m2 515.00 1,500.00 772,500.00
Grand total 1,893,500.00

3. WATER SUPPLY / TREATMENT/ DISPOSAL
Bore hole Pcs 1 1,550,000 1,550,000.00
Wastes Water Systems Ls 1 450,000 450,000.00
Sub total 2,000,000

3. OTHERS-CIVIL WORKS
Perimeter fencing Ml 440 1200 528,000

Parking Lot and Access M2 250.00 1200 300,000
Main gate and access No 2 15000 30,000
Sub total 858,000
Total (1-3) 19,631,500
Contingency ( 15 %) 2,944,725
Grand total 22,576,225
Page 23 of 38
9.1.3 Machinery & equipment.

Units UOM Quantity Rate Cost
USD USD
GENERAL
TV Set Set 2 4,500 9,000
Multimedia (DSTV) set 2 2,045 4,091
Conference Room Equipments Set 2 8,500 17,000
Internet Eq Set 1 1,200 1,200
Sound and Security Systems Set 2 5,682 11,364
Health club equipment set 1 25,000 25,000
Sub-Total 67,655
FRONT OFFICE
Fax machines set 2 409 818
Money Safe set 60 164 9,818
Office Requirements sets 1 1,136 1,136
Computers set 6 682 4,091
Printers set 2 227 455
Sub-Total 16,318
BED ROOMS
TV Set Set 130 540 70,200
Refrigerator set 130 800 104,000
Fridge Medium Set 2 545 1,091
Sub-Total 175,291
KITCHEN FACILITY
Kitchen equipment set 2 1,818 3,636
Cold Rooms Set 1 4,318 4,318
Dish Washing Eq Set 2 3,500 7,000
Restaurant equipment set 2 5,455 10,909
Sub-Total 25,864
OTHER FACILITY EQUIPMENT
Generator set 1 6,500 6,500
Laundry and Washing machines Set 1 4,545 4,545
Solar Systems set 1 4,545 4,545
Children outdoor and indoor game equipments set 4 3,000 12,000
and accessories
Others set 1 1,136 1,136
Sub-Total 28,727
313,855
7,846,363.64
Page 24 of 38
9.1.4 Furniture & Fixture

Units UOM Quantity rate Cost
Bed Room Furniture Single Set 55 1,000.00 55,000

Bed Room Furniture Classic Set 45 1,200.00 54,000
Bed Room Furniture Family Set 25 1,400.00 35,000
Bed Room Furniture Suite Set 5 2,110.00 10,550
Restaurant furniture’s Set 1 8,000.00 8,000
Bar Furniture Set 1 4,500.00 4,500
Swimming Pool Furniture Set 1 2,110.00 2,110
182,560
4,564,000.00
9.1.5 Motor Vehicle

EQUIPMENT UNIT QT. RATE COST
USD USD
Mini Bus Set 2 15,000 30,000
Bus Set 2 35,000 70,000
Station Wagen Set 1 25,000 25,000
Grand Total ( USD ) 100,000
Grand Total ( Et. bIrr ) 2,500,000.00
9.1.6 Pre-production costs
TYPE OF EXPENSES ASSUMPTIONS COST
Ocean Freight Cost 7% Of FOB machinery price 1,043,725
Insurance cost for foreign purchase 5% Of FOB machinery price 745,518
Installation Cost 3% Machinery Cost 235,391
Training and skill transfer 2% Machinery Cost 156,927
Spare Part 2% Of FOB machinery price 206,927
Admine Cost 1% of Investment 201,471
Total in Birr 2,589,960
Page 25 of 38
10 FINANCIAL ANALYSIS
10.1 REVENUE ASSUMPTIONS ON AND PROJECTIONS
10.1.1 Rooms Revenues
Accommodation
Accommodation Y1 Y2 Y3 Y4 Y5
SINGLE BED 55 55 55 55 55
CLASSIC ROOM 45 45 45 45 45
FAMILY ROOM 25 25 25 25 25
SUITE 5 5 5 5 5
Occupancy Rates 25% 40% 45% 45% 45%
Rooms Available
SINGLE BED 5,019 8,030 9,034 9,034 9,034
CLASSIC ROOM 4,106 6,570 6,570 6,570 6,570
FAMILY ROOM 2,281 3,650 3,650 3,650 3,650
SUITE 456 730 730 730 730
11,862.50 18,980.00 19,983.75 19,983.75 19,983.75
Rate Per Room (Birr )
SINGLE BED 700 770 847 932 1,025
CLASSIC ROOM 1,200 1,320 1,452 1,597 1,757
FAMILY ROOM 1,700 1,870 2,057 2,263 2,489
SUITE 3,200 3,520 3,872 4,259 4,685
Page 26 of 38
Y1 Y2 Y3 Y4 Y5
Revenue of Bed Rooms Rent ( Birr )
Annual 13,778,750 24,250,600 27,525,836 30,278,420 33,306,262
ROOMS RELATED INCOME ASSUMPTIONS

Tel Communications 137,788 242,506 275,258 302,784 333,063
Boundary Service 13,779 24,251 27,526 30,278 33,306
151,566 266,757 302,784 333,063 366,369
13,930,316 24,517,357 27,828,620 30,611,482 33,672,631
Page 27 of 38
10.1.2 F&B Revenues

Y-1 Y-2 Y-3 Y-4 Y-5 –Y10
Break Fast Sales Per Unit
Daily Estimated Sales -Portions 33 52 55 55 55
Sales Price per Portion 150 158 165 174 182
Daily Sales 4,875 8,190 9,054 9,507 9,982
Lunch
Daily Sales 6,500 10,920 12,072 12,676 13,310
Dinner
Daily Sales 8,125 13,650 15,090 15,845 16,637
19,500 32,760 36,217 38,028 39,929
TOTAL OF DAILY SALES 30,875 51,870 57,344 60,211 63,222
TOTAL OF ANNUAL SALES 7,117,500 11,957,400 13,219,251 13,880,213 14,574,224
Page 28 of 38
Y-1 Y-2 Y-3 Y-4 Y-5 –Y10

Beverage
Alcoholic Drinks
Daily Estimates Sales - Bottles 130 143 157 173 190
Average Sale Price per bottle 30 32 33 35 36
Daily Sales 3,900 4,505 5,203 6,009 6,941
Spirits/Wines
Daily Estimated Sales - Bottles 7 8 10 12 14
Average Sales Price per bottle 250 263 276 289 304
Daily Sales 1,750 2,187 2,732 3,414 4,266
Alcohols
Average Sales Price per bottle 1,800 1,890 1,985 2,084 2,188
Daily Sales 1,800 3,780 7,938 8,335 10,940
Soft Drinks and Bottled Water
Sales Price per bottle 20 21 22 23 24
Daily Sales 4,000 4,998 6,245 7,803 9,750
5,750 7,185 8,977 11,217 14,016
2,098,750 2,622,388 3,276,674 4,094,204 5,115,708
Page 29 of 38
10.1.3 Other Operation Departments Revenues

YEAR
TYPES OF INCOME Y-1 Y-2 Y-3 Y-4 Y-5 –Y10
I Tax Service
User per day 10 15 20 20 20
No of Taxi 1 1 1 1 1
Charge per person 100 110 121 133 146
Revenue per year ( Birr ) 365,000 602,250 883,300 971,630 1,068,793
Motor boat Service
User per day 4 6 12 15 15
No of boats 2 2 2 2 2
Revenue per year ( Birr ) 146,000 240,900 529,980 728,723 801,595
Steam bath and massage
Users per day 5 6 7 9 10
Gymnasium
Users per month 10 12 12 12 12
Weeding Banquette
Weeding 12 12 12 12 12
Charge per weeding 45,000 49,500 54,450 59,895 65,885
540,000 594,000 653,400 718,740 790,614
Page 30 of 38
10.2 COST PROJECTIONS

10.2.1 Cost of goods sold
COST OF GOODS SOLD YEAR
Y-1 Y-2 Y-3 Y-4 Y-5 –Y10
ROOM SERVICE EXPENSE
Tel Communications 68,894 121,253 137,629 151,392 166,531
Laundry Service. 4,409 7,760 8,808 9,689 10,658
Housekeeping supplies 344,469 606,265 688,146 756,960 832,657
Commission 137,788 242,506 275,258 302,784 333,063
Salaries & Social charges- 172,800 181,440 190,512 200,038 210,039
Utilities: Electricity, Water, Telep 696,516 1,225,868 1,391,431 1,530,574 1,683,632
1,424,875 2,385,092 2,691,785 2,951,438 3,236,579
F&B Expenses
Food cost of goods sold 2,847,000 4,782,960 5,287,700 5,552,085 5,829,690
Beverage 1,154,313 1,442,313 1,802,171 2,251,812 2,813,639
Commission 92,163 145,798 164,959 179,744 196,899
Salaries & Social charges 218,400 229,320 240,786 252,825 265,467
Total F&F Expenses 4,311,875 6,600,391 7,495,616 8,236,467 9,105,695
Others Department Expense
Salaries & Social charges 124,800 131,040 137,592 144,472 151,695
Maintenance 71,150 96,410 134,697 161,204 184,914
Other expenses 71,150 96,410 134,697 161,204 184,914
Utilities: Fuel and Oil 142,300 192,819 269,394 322,408 369,829
409,400 516,678 676,381 789,288 891,353
COST OF GOODS SOLD 6,146,150 9,502,161 10,863,782 11,977,192 13,233,627
Page 31 of 38
10.2.2 Total General & Administrative Exp

YEAR
COST Y-1 Y-2 Y-3 Y-4 Y-5 –Y10
Administrative Expenses
Lawyers & auditors fees 45,240 47,502 49,877 52,371 54,990
Office e supplies 69,652 122,587 139,143 153,057 168,363
Marketing Expenses 69,652 122,587 139,143 153,057 168,363
Maintenance 208,955 367,760 417,429 459,172 505,089
Salaries & Social charges-Administrative 452,400 475,020 498,771 523,710 549,895
Other expenses 50,000 52,500 55,125 57,881 60,775
Total General & Administrative Exp 895,898 1,187,956 1,299,489 1,399,249 1,507,476
7,042,048 10,690,117 12,163,270 13,376,441 14,741,103
Page 32 of 38
10.4 FINANCIAL PROJECTIONS

10.4.1 Projected income statement (‘000 birr)
Year Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
Sales 24,570 41,025 47,018 51,810 57,061 59,914 62,910 66,055 69,358 72,826
Less COGS 6,146 9,502 10,864 11,977 13,234 13,895 14,590 15,320 16,086 16,890
Gross profit 18,423 31,523 36,155 39,833 43,827 46,019 48,320 50,735 53,272 55,936
Less SG&A expenses (896) (1,188) (1,299) (1,399) (1,507) (1,583) (1,662) (1,745) (1,832) (1,924)
Less depreciation (3,093) (3,093) (3,250) (3,250) (3,250) (2,732) (2,732) (2,732) (2,732) (2,732)
Earnings before interest and 14,435 27,242 31,605 35,184 39,070 41,704 43,926 46,259 48,708 51,280
taxes
Less interest expense (3,794) (3,197) (2,528) (1,779) (940) - - - - -
Pre-tax income 10,641 24,046 29,078 33,405 38,130 41,704 43,926 46,259 48,708 51,280
Cumulative pre-tax income 10,641 34,687 63,764 97,169 135,300 177,004 220,929 267,188 315,896 367,176
(NOL)
Taxes - - - 11,692 13,346 14,596 15,374 16,191 17,048 17,948
Pre-tax income 10,641 24,046 29,078 33,405 38,130 41,704 43,926 46,259 48,708 51,280
Less taxes - - - (11,692) (13,346) (14,596) (15,374) (16,191) (17,048) (17,948)
Net income 10,641 24,046 29,078 21,713 24,785 27,108 28,552 30,068 31,660 33,332
Net Profit Margin 43% 59% 62% 42% 43% 45% 45% 46% 46% 46%
Page 33 of 38
10.4.2 Projected balance sheet (‘000 birr)

Year 0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
Cash 5,000 12,344 32,986 58,730 76,429 96,332 126,009 157,122 189,743 223,947 259,813
Inventory - 307 475 543 599 662 695 730 766 804 844
Accounts receivable - 1,228 2,051 2,351 2,590 2,853 2,996 3,145 3,303 3,468 3,641
Total current assets 5,000 13,880 35,512 61,624 79,618 99,847 129,700 160,997 193,811 228,219 264,299
Gross property, plant & 40,164 40,164 40,164 40,164 40,164 40,164 40,164 40,164 40,164 40,164 40,164
equipment
Less accumulated - (3,093) (6,186) (9,435) (12,685) (15,935) (18,667) (21,399) (24,130) (26,862) (29,594)
depreciation
Net property, plant & 40,164 37,071 33,979 30,729 27,479 24,229 21,498 18,766 16,034 13,302 10,570
equipment
Total assets 45,164 50,952 69,491 92,353 107,097 124,076 151,197 179,763 209,845 241,521 274,869
Accounts payable - 123 190 217 240 265 278 292 306 322 338
Bank notes payable - - - - - - - - - - -
Total current liabilities - 123 190 217 240 265 278 292 306 322 338
Long-term debt 31,615 26,639 21,065 14,822 7,831 0 - - - - -
Equity 13,549 24,190 48,236 77,314 99,027 123,812 150,919 179,471 209,539 241,199 274,531
Total long-term debt and 45,164 50,829 69,301 92,136 106,858 123,812 150,919 179,471 209,539 241,199 274,531
equity
Total liabilities 45,164 50,952 69,491 92,353 107,097 124,076 151,197 179,763 209,845 241,521 274,869
Working Capital 5,000 13,757 35,322 61,407 79,378 99,582 129,422 160,705 193,505 227,897 263,961
Gross Profit Margin 75% 77% 77% 77% 77% 77% 77% 77% 77% 77%
Net profit Margie 43% 59% 62% 42% 43% 45% 45% 46% 46% 46%
Operating Profit Margie 59% 66% 67% 68% 68% 70% 70% 70% 70% 70%
Return on Assets Ratio 47% 42% 24% 23% 22% 19% 17% 15% 14% 95%
(ROOI)
Return on Equity 44% 50% 38% 22% 20% 18% 16% 14% 13% 12%
Debt to Equity = 30% 47% 69% 84% 92% 100% 100% 100% 100% 100% 100%
Page 34 of 38
10.4.3 Projected cash flow statement (‘000 birr)

Year 0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
Net income 10,641 24,046 29,078 21,713 24,785 27,108 28,552 30,068 31,660 33,332
Plus depreciation 3,093 3,093 3,250 3,250 3,250 2,732 2,732 2,732 2,732 2,732
Less increase in inventory - (307) (168) (68) (56) (63) (33) (35) (36) (38) (40)
Less increase in accounts receivable - (1,228) (823) (300) (240) (263) (143) (150) (157) (165) (173)
Plus increase in accounts payable - 123 67 27 22 25 13 14 15 15 16
Cash flow from operations - 12,321 26,215 31,987 24,690 27,734 29,677 31,113 32,621 34,204 35,866
Less investment (40,164) - - - - - - - - - -
Cash flow from operations and (40,164) 12,321 26,215 31,987 24,690 27,734 29,677 31,113 32,621 34,204 35,866
invests
Plus net new equity capital raised 13,549 - - - - - - - - - -
Less dividends paid - - - - - - - - - - -
Plus net new long-term debt 31,615 (4,977) (5,574) (6,243) (6,992) (7,831) (0) - - - -
Plus net new bank borrowings - - - - - - - - - - -
Cash flow from ops, invests, and fin 5,000 7,344 20,641 25,744 17,698 19,904 29,677 31,113 32,621 34,204 35,866
Beginning cash balance - 5,000 12,344 32,986 58,730 76,429 96,332 126,009 157,122 189,743 223,947
Ending cash balance 5,000 12,344 32,986 58,730 76,429 96,332 126,009 157,122 189,743 223,947 259,813
Page 35 of 38
10.4.4 Payback period internal rate of return

PROJECT WORTH MEASURE ( NPV, IRR, PB ) AFTER TAX . Birr '000
Year 0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
Cash flow (40,164) 12,321 26,215 31,987 24,690 27,734 29,677 31,113 32,621 34,204 35,866
PV factor 100% 90.09% 82.64% 75.13% 68.30% 62.09% 62.09% 62.09% 62.09% 62.09% 62.09%
PV of cash flow (40,164) 11,100 21,664 24,032 16,863 17,220 18,426 19,318 20,254 21,237 22,269
(40,164) (29,064) (7,400) 16,632 33,495 50,715 69,141 88,459 108,714 129,951 152,220
NPV 172,474 -
IRR ( After Tax ) 55%
Pay Back Period

PROJECT WORTH MEASURE ( NPV, IRR, PB ) BEFORE TAX
Year 0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
Cash flow (40,164) 12,321 26,215 31,987 36,382 41,080 44,273 46,487 - - -
PV factor 100% 90.09% 82.64% 75.13% 68.30% 62.09% 62.09% 62.09% 62.09% 62.09% 62.09%
PV of cash flow (40,164) 11,100 21,664 24,032 24,849 25,506 27,489 28,864 - - -
(40,164) (29,064) (7,400) 16,632 41,480 66,987 94,476 123,340 123,340 123,340 123,340
NPV 123,340
IRR (Before Tax ) 59%
Pay Back Period 4y +8m
Page 36 of 38
10.5 FINANCIAL RESULTS AND VIABILITY

10.5.1 Profitability
According to the projected income statement, the project will start generating profit in the first year of operation. Important ratios such as
profit to total sales, net profit to equity (Return on equity) and net profit plus interest on total investment (return on total investment) show
an increasing trend during the life-time of the project. The income statement and the other indicators of profitability show that the project is
viable.
10.5.2 Cash flow statement and balance sheet

The cash flow statement for the first 10 years of operation of the Resort has been worked out based on profitability estimates. Based on the
cash flow statement, the projected balance sheet for the first 10 years of operation has been forecasted. It may be seen that the Resort would
have comfortable cash position throughout the first 10 years of the loan period and also that the reserve and surplus position have a steady
growth during these years indicating a healthy position of the firm
10.5.3 Payback period

The investment cost and income statement projection are used to project the payback period. The project’s initial investment will be fully
recovered within 4 years.
Page 37 of 38
140,000
120,000
100,000
80,000
60,000
40,000
20,000
-
(20,000) 1 2 3 4 5 6 7 8 9 10 11
(40,000)
(60,000)
10.5.4 Internal rate of return and net present value

Based on the cash flow statement, the calculated IRR of the project is 55% before tax and the net present value at 10 % discount rate is birr 177
million
Page 38 of 38

Girum Resort

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Girum Resort

Uploaded by

Copyright:

Available Formats

GIRUM RESORT HOTEL* ****

South Nation Nationality Regional State

Promoter :- Ato Lema Kameiso

Deal Manager Ato Lema Kameiso

Description of  To serve as a place where tourists, visitors, vacationers and leisure

Is estimates as Project Investment Cost for the establishment of the Project,

30 % Entrepreneurs Equity (Cash)……. Birr 13.67 Million Birr

70 % Loan……………………..………. Birr 31.48 Million Birr

3.2.2 Objective and scope of the project. .......................................................................... 10

3.2.3 Strategies ................................................................................................................ 10

3.2.4 Product and services ................................................................................................ 10

3.3 CURRENT INDUSTRY AND MARKETING OVERVIEW ......................................................... 11

9.1.2 Civil works & buildings ............................................................................................. 23

9.1.3 Machinery & equipment. ......................................................................................... 24

9.1.4 Furniture & Fixture .................................................................................................. 25

9.1.5 Motor Vehicle .......................................................................................................... 25

9.1.6 Pre-production costs ................................................................................................ 25

10.1.2 F&B Revenues .......................................................................................................... 28

10.1.3 Other Operation Departments Revenues ................................................................. 30

10.2 COST PROJECTIONS ......................................................................................................... 31

10.2.2 Total General & Administrative Exp ......................................................................... 32

10.4 FINANCIAL PROJECTIONS ................................................................................................ 33

10.4.2 Projected balance sheet (‘000 birr) .......................................................................... 34

10.4.3 Projected cash flow statement (‘000 birr) ................................................................ 35

10.4.4 Payback period internal rate of return ..................................................................... 36

10.5 FINANCIAL RESULTS AND VIABILITY ................................................................................ 37

10.5.2 Cash flow statement and balance sheet ................................................................... 37

10.5.3 Payback period ........................................................................................................ 37

10.5.4 Internal rate of return and net present value ........................................................... 38

Wor Capit 5,000

0 5,000 10,000 15,000 20,000 25,000

3.2.2 Objective and scope of the project.

3.3 CURRENT INDUSTRY AND MARKETING OVERVIEW

Fig 3-1 Tourism circuit of Ethiopia

3.4 HAWASSA TOURISM TREND

3.5 HOTEL STATISTICS OF HAWASSA

Table 4-1 GENERAL LAND UTILIZATION PLAN

Table 4-2 G+ 6 S P A C E P RO G RA M UTILIZATION PLAN

Restaurant 1 200 200

5 PROJECT ORGANIZATION AND MANPOWER REQUIREMENT

5.2 ORGANIZATIONAL STRUCTURE

HOTEL MANGER F & B DEPARTEMNT

MARKETING AND SALES

Table 5-1 Manpower Requirements Estimate

EDUCATIONAL LEVEL EXPERIENCE NO OF

TITLE/DESIGNATION EDUCATIONAL LEVEL EXPERIENCE NO OF

5.3 PRE-OPERATING ACTIVITIES

6 SOCIO-ECONOMIC BENEFITS AND JUSTIFICATION

6.1 EMPLOYMENT AND INCOME GENERATION

Messenger and cleaner 1 800.00 9,600.00

MARKETING AND SALES OFFICE

Marketing officer 1 3,000.00 36,000.00

7 ENVIRONMENTAL IMPACTS OF RESORT

8.2 SOURCE OF FINANCE

8.3 RETURN OF PROJECT INVESTMENT

9.1.2 Civil works & buildings

Grand total 1,893,500.00

Sub total 2,000,000

Perimeter fencing Ml 440 1200 528,000

9.1.3 Machinery & equipment.

9.1.4 Furniture & Fixture

Bed Room Furniture Single Set 55 1,000.00 55,000

9.1.5 Motor Vehicle