Tour and Travel Feasibility Study Updating

EAST STARS TOUR & TRAVEL SERVICE ENTERPRISE
TOUR AND TRAVEL FEASIBILITY STUDY
Company Name : East Stars general Trading PLC

Addresise : Bahir Dar Atsetedrose Sub City
Contact Preson: Company Manager Mrs Belaynsh Addis
Phone Number : +251925527980/940333999
March, 2024
Bahir Da, Ethiopia
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EAST STARS GENERAL TRADING PLC
Table of Contents
I.Acronyms................................................................................................................................................iii
II.EXECUTIVE SUMMARY.......................................................................................................................iv
1.INTRODUCTION......................................................................................................................................1
1.1 Backgound.........................................................................................................................................1
1.2 Company Overview and Ownership..................................................................................................1
1.3 Credit History and Status of the Promoter.........................................................................................2
1.4 Purpose and Amount of Loan Requested...........................................................................................2
1.5 Project LocEast StarTour and Travel on...........................................................................................3
1.6 Project rEast StarTour and Travel onale............................................................................................3
1.7 Overall Project Objectives.................................................................................................................4
2.SERVICE DESCRIPTION AND APPLICEAST STARTOUR AND TRAVEL ON.................................5
2.1 Project Description............................................................................................................................5
2.2 Types of Tour Operator......................................................................................................................6
2.3 Package holiday.................................................................................................................................7
2.3.1 ClassificEast StarTour and Travel ons of Tour Packages...........................................................7
2.3.2 ClassificEast StarTour and Travel on of Package Tours............................................................8
2.3.3 Components of Package..............................................................................................................9
2.4 Tour OperEast StarTour and Travel on Products.............................................................................11
2.5 Tailor-Made/Custom Tour................................................................................................................12
2.5.1 Handling Tailor Made Tours.....................................................................................................13
2.5.2 City Transport Services............................................................................................................15
3.MARKET STUDY, VEHICLES CAPACITY AND SERVICE DELIVERY..........................................16
3.1. Market Study..................................................................................................................................16
3.1.1. Present Demand and Supply....................................................................................................16
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3.1.2 Market Size...............................................................................................................................16
3.2 Supply and the capacity of the Bus..................................................................................................18
3.3 Service strategy...............................................................................................................................18
3.3.1 Sales Strategies.........................................................................................................................19
3.3.2 Distribution of Tourist Products...............................................................................................19
4.TECHNICAL STUDY..............................................................................................................................20
4.1 Functions of Travel Agencies and Tour Operators...........................................................................20
4.2 Typical Flow of Tourism Arrangements in Ethiopia........................................................................21
4.3 Types of Travel Agencies and Tour Operators................................................................................23
4.4 Functions of Travel Agencies..........................................................................................................26
4.5 Booking Services.............................................................................................................................26
4.6Tactics of negotiEast StarTour and Travel on....................................................................................27
4.6.1 Booking of Services..................................................................................................................29
4.6.2. Service program.......................................................................................................................31
4.6.3. Accessibility...........................................................................................................................32
4.6.4 Transport Fee............................................................................................................................32
5. ORGANIZEAST STARTOUR AND TRAVEL ONAL STRUCTURE & HUMAN RESOURCE......33
5.1 OrganizEast StarTour and Travel on Structure.................................................................................33
5.2 Human Resource and Salary............................................................................................................34
5.3 Cost of furniture and equipment.....................................................................................................34
6. FINANCIAL ANALYSIS........................................................................................................................35
6.1. Underlying Assumption..................................................................................................................35
6.2 Investment.......................................................................................................................................35
6.3 . Service Cost....................................................................................................................................36
6 FINANCIAL EVALUEAST STARTOUR AND TRAVEL ON...............................................................37
7ECONOMIC AND SOCIAL BENEFITS..................................................................................................38
Appendix 7.A: financial analyses supporting tables...................................................................................42
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I. Acronyms
ARCCH Agency for Research and ConservEast StarTour and Travel on of the
Cultural Heritage
CRM Customer RelEast StarTour and Travel onship Management
(software)
CSR Corporate Social Responsibility
CTTC Catering and Tourism Training Center
EIC Ethiopian Investment Commission

1
ESTDP Ethiopian Sustainable Tourism Project
ETB Ethiopian Birr (official currency)
ETO Ethiopian Tourism OrganisEast StarTour and Travel on
EWCA Ethiopian Wildlife Authority
GTP Growth and TransformEast StarTour and Travel on Plan.
IFC InternEast StarTour and Travel onal Finance CorporEast StarTour

and Travel on (World Bank Group)
IFIs InternEast StarTour and Travel onal Finance Institutions
IGAD Intergovernmental Authority for Development (East Africa)
MoCT Ministry of Culture and Tourism
MoFA Ministry of Foreign Affairs
MSMEs Micro, small and medium enterprises
PROHEDEV Heritage for Development Project (EU funding)
PUM Netherlands Senior Experts
SNNPR Southern NEast StarTour and Travel ons, NEast StarTour and Travel
onalities and Peoples Region
SMEs Small and Medium Enterprises
SDPASE Sustainable Development of the Protected Areas System of Ethiopia
TTCI Tourism and Travel Competitiveness Index
UNECA United NEast StarTour and Travel ons Economic Commission for
Africa
UNWTO United NEast StarTour and Travel ons World Tourism OrganisEast
StarTour and Travel on
VFR Visit Friends and RelEast StarTour and Travel ves
WTTC World Travel and Tourism Council
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II. EXECUTIVE SUMMARY

This feasibility study deals with the establishment of a Tour & Travel Services and its derivEast
StarTour and Travel ves with Two Super grand, One Tota Coster Company Lease from
Development Bank of Ethiopia and rent depend on demand Customers. The project will be
located in the City of Bahir Dar which is the capital of, Amhara Region state main Office Banch
of Addis Ababa.
Four vehicle leasing which is Two Hairufi, Two , Costre Bus,this leasing,Tour & Travel vehicle
leasing acquires for strength of Tour &Travele Business Development, and improve Sector
services in the Toursiom region and the Country as well. Therefore, considering the growing
demand for maize starch and its derivEast StarTour and Travel ves product in the country and
to play a strategic role on import substitution of starch & its derivEast StarTour and Travel ves,
East Stars general Trading PLC has taken the initiEast StarTour and Travel ve to conduct a
feasibility study for the establishment of maize starch & its derivEast StarTour and Travel ves
product in the city of Bahr Dar.
The project is owned by East Stars general Trading PLC established with an initial investment
capital of Birr 32,886,794.00 out of which the sum Birr 26,302,416.00 is for fixed investment
cost, Birr 319,320.00 for Pre – production costs and Birr 6,584,378.00 is allocated for working
capital of the project and the remaining balance is for the payment of interest during
implementEast StarTour and Travel on phase of the project.The data taken from the financial
statement shows that the envisaged maize starch and its derivEast StarTour and Travel ve
manufacturing project has a payback period of 4 years. This expected business target and
operEast StarTour and Travel onal result shows that investing in this project is financially
sound and lucrEast StarTour and Travel ve business for the shareholders coupled with its
economic advantage to small holder farmers. As part of their missions and the fulfillment of
their strategic intervention objectives in the region, therefore, East Stars general Trading PLC
have fully determined for the execution of this project.
Besides its backward linkage advantage, the project will substitute imports of starch and its
derivEast StarTour and Travel ves as corn starch and its derivEast StarTour and Travel ves
are all imported. The project, therefore, plays foreign currency saving role by substituting
imports of such products demanded in the country’s market. The project will also promote
export of these products to the internEast StarTour and Travel onal market. To conclude, Tour
& Travel vehicle Leasing establishment investment is a green field opportunity in Amhara
Region. An investment cost of Birr 32.8 million including machine equipment could establish a
new established tour & Travel Business capacity of more than 22,800 with leasing and rent car
from market per year NPV 156 million and an estimated IRR (interest rate return) of 49%
over 10 years. The manufacturing Plant is proposed will be establish in Bahir Dar, Amhara
Regional State.
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The establishment of the project will also create a direct employment opportunity for 22 people
starting 2017 E.C. Additional workers will also be employed for loading and unloading products
who will work on piece rate basis.
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1. INTRODUCTION
1.1 Backgound
The nature of travel agency business is to provide holiday-related services such as ticket
booking, transfer arrangement, hotel room booking and arrangement of ground
transportEast StarTour and Travel on, venue selection and booking for MICE activities.
The scope of business of travel agents was narrow and confined to selected services.
Moreover, the business was managed with small investment. It was risky business as it was
depending upon the natural and socio-political along with cultural factors.The amount of
profit was too little to attract new entrants to do this business. A number of restrictions
were imposed by the government on travel agents and tour operators for entry into tour
operEast StarTour and Travel on business.
Tour operators had no choice, but to deal with other problems like confirmEast StarTour
and Travel on of hotel rooms, safety in travel, quality of foods, travel documents,volEast
StarTour and Travel le political system, language differences, cultural differences,
cumbersome and tedious travelling, long journey, etc. However, invention of road
transport steamship as a common mode of transport changed the perceptions of people on
travelling distance places with moder comfortable one. Thus, transportEast StarTour and
Travel on moder vehicles could emerge as the Compenet professional Tour & Travel firm
established in the wake of introduction of affordable transport services with packaging
Customer demand. Car rent,air ticket.Boat trip, Hotel Reservetions. From Different Countries
in the world visit Amhara Toursim Centers Such as Tana Monasterices, Bule Nile Water
fall,Lalibela Gondar Castel, Gorigora,Semen Mountain,in addition to this Axum,Koisha,Konso
1.2 Company Overview and Ownership

The company's creators, East Stars general Trading PLC have a good track record of success in
comparable business sectors, planning, managing various business organizEast StarTour and
Travel ons, and trade expertise. General Manager Mrs Belaynshe Addis
She founded the Tour and Travel Business Businesses. She is a self-made with other team
members businessman who got his first job on a Forward OperEast StarTour and Travel ng
Base Province through a familial connection. With more than 30 million in services and
construction projects, 22 employees who can grow to 156 million and indirectly more than 230
people under these projects, and being one of the best Tour and Travel Business in Ethiopia
general manufacturing sub-Agro processing in the area, East Stars general Trading PLC
company has the chance to finance greenlight customers in the development bank of Ethiopia.
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While general Tour and Travel Business is a thriving growth industry in the contemporary
Ethiopian economy, notably in the Amhara regional state, glass strength using temperature
realizes that agribusiness is a very alluring choice for diversificEast StarTour and Travel on
due to rising demand and commodity prices. To help a regional short flow investment job
creEast StarTour and Travel on and import substitution in province realize its economic and
social potential, is looking for partners and investors.
1.3 Credit History and Status of the Promoter

Mrs Belaynshe Addis has experience managing East Stars general Trading PLC as the general manager
of PLC, which she founded. She has a first-degree educEast StarTour and Travel on that is substantial,
manager Mrs has extensive expertise in diffrent investment in many Amhara regions, Especially
Marble manufacture busines, Loyal Customer loan management of Development Bank Of Ethiopia and
Oromia CooperEast StarTour and Travel ve bank. some documents are attached in the annexed, and
they have a tractor that is equipped with all required instruments. In the coming year, they have a plan,
Tour and Tavel Business will be established in Bahir Dar City Administrion.
When it mentioned at the executive summary of this project; the total investment cost of the project
should make an aggregate Birr 89,661,434.50. Therefore; this Fruit & vegetable farm organizEast
StarTour and Travel on’s owners/ promoters cover's from the total investment cost of its 80%
(62,763,004.15) is expected from banks which will be covered for the future with bank loan or credit
agreement from any voluntary bank of governmental and nongovernmental lending organizEast
StarTour and Travel ons and the rest 20% (26,898,430.35) self-investment
1.4 Purpose and Amount of Loan Requested

More over; the project of this Tour and Travel Services investment will have a huge
potential to develop the area and increase the production of Tour and Travel Services
mostly. For project feasibility Tour and Travel investment’s, the total fixed costs of the
project using Leasing finance are Birr 89,661,434.50. From this total investment cost the
project owners/ promoters wants to bank finance or bank loan will be requested with a
minimum of 80%( 62,763,004.15) birr from the total aggregate costs of the project. This
Tour and Travel Services investment organizEast StarTour and Travel on use its bank
loan /debt money for the purpose of the project to widening its farming systems and methods
with fulfilling modern farm machineries and technologies; use Tour and Travel Services.

Temporary & permanent employment opportunity also will be created; and digtazid services
technologies disseminates that will be benefit the surrounding farmers in the area in their
effort of improving food security by creat maket them especially networking export
products indirectly.
1.5 Project LocEast StarTour and Travel on

The Tour and Travel Business Establishement is proposed to be located in Bahir Dar City
AdministrEast StarTour and Travel on which is located about 560 kilometers North West of
Addis Ababa on the main road from Addis Ababa to Bahir Dar.
Selecting locEast StarTour and Travel on for such basis on; availability of Hotels, air
Transpor, Boat Trip, adequate near to Bahir Dar money Tourist site area and operEast
StarTour and Travel on space, water and power supply, market outlet for finished products and
availability of labor are among the major factors to be considered. In addition to improve
sector service with packaging deliver, the project plans to export the produce to the East Africa
region such as Sudan. Bahir Dar is the host of other labor-intensive factories due to its
preferable attribute and central to most woreda centers in the region, proximity to Sudan
market, access to the route to capital Addis Ababa, which is the hub of nEast StarTour and
Travel onal business.
1.6 Project rEast StarTour and Travel onale

At present Ethiopia is in a period of economic recovery and executing different development
activities. With relEast StarTour and Travel vely considerable macro- economic improvements
being achieved and the policy environment becoming more conducive than ever, wider
opportunities have been opened for private investors to participate in a tour , travel business
integrated services imporvement and diversified range of economic development activities.
The business environment in Ethiopia is very favorable and the government gives special
support to those who want to invest in Tourisum sector one of the pillar including agro
processing and manufacturing sector develoment.
The demand-supply gap for tourisum tour & travel services improvement leasing vehicle is
increasing because of the increasing of the services that demands traveler stay in region as well
Country. In Ethiopia there is no Company that is engaged in the packing services tour and

travel here Bahir Dar City AdministrEast StarTour and Travel on. Therefore, it has become
very important to assess the viability of investing in Vehicle leasing. Taking this in to
considerEast StarTour and Travel on, East Stars general Trading PLC have decided for the
preparEast StarTour and Travel on of feasibility study and the establishment of Vehecles
leasing improve services Gap with packaging and demand based Services de;iver.
1.7 Overall Project Objectives

The investment project has planned to achieve set of objectives by implementing the newly
envisaged Complete Tour and Travel Business project in different product lines. Hence,
implementEast StarTour and Travel on of the underlying commercial purpose Tour and Travel
Business using temperature different products glass has an intention to attain set of objectives
at three different levels strengthen:
a) Regional and NEast StarTour and Travel onal Level Objective
The proposed project if it will be implemented will contribute to the attainment of the nEast
StarTour and Travel onal government strategies on eradicEast StarTour and Travel ng poverty
in the country. The project could even fill the gap of the increasing demand of diversified
manufacturing glass related products in the domestic and global market.
b) Sectorial and Community Level Objectives
● To contribute to the employment condition of the vicinity,
● To increase Tourisum sector productivity,
● To enhance the entrepreneurial skills and knowledge among the community
● To introduce new concept in the sector in regard to Complete Tour and Travel
Business, diversity and Packaing Services in One Shop type.
● To create quality product development and marketing linkages,
● To increase present level of using commercial purpose Tour services items among the
society and help augment the per capita income of the community

● To contribute on the overall attainment of the regional government strategy on services
focus development.
c) Project specific objective includes:
● Primarily to secure Loan Facility of ETB 26,302,416.00 for planned project
implementEast StarTour and Travel on
● To embark and achieve a reliable sources of Enrich Vehicles leasing with digitzed Tour
services packaing and demand based Customer
● To produce and supply reliable and diversified commercial glass items such as Tour
and Travel Business s for local and global market, which encompasses at full capacity:
● To supply glass for the domestic and export market
● To supply Tour and Travel Business for improve the domestic and export market
● To enhance the technical skills and thereby decreasing the incidence of inconveniet
services imporved, establish networking with hotel, airlines,car rent enterprise, train
employee, in Tour and Travel services
● To attain target profit earnings that allows the company for further investment
expansion in other regional areas.
2. SERVICE DESCRIPTION AND APPLICEAST STARTOUR AND TRAVEL ON
2.1 Project Description

A tour operator buys (or owns in some cases) a high volume of travel services like carriers,
accommodEast StarTour and Travel on and services. These services are then assembled into
packages for purchase by consumers. Packages are sold via travel agents (independent or
owned) or through the phone and internet. The Packaging presents dominant roles of tour
operators.Nature of Primary Activities of Different Tour Operators
 Inbound – Describing places of important of the country

 Outbound – Highlighting holidays about other countries
 Domestic – Specializing on domestic holidays within country

 Specialist – Special interest travel to destinEast StarTour and Travel ons

 Independent- Specialized in specific holiday
 Integrated – Business Conglomerate
 Mass-market- Targeting more sale
 The following services are provided by the tour operates in the package tours
o Airport and hotel transfer
o Arrangements for traditional reception at the arrival points
o Arrangements of luggage transfer in the airport stEast StarTour and Travel ons
o Arrangements of guided sightseeing tours
o Comprehensive itinerary planning
o Appropriate hotel selection & reservEast StarTour and Travel on
o Meeting, conference and meeting arrangements
o Exhibition and factory visits, Theme parties, events & sightseeing
o Air tickets & travel documents like passport, VISA, health certificate and
currency, insurance and permits for entry into the restricted areas
 Foreign Exchange & Travel Insurance
 Experienced and professional tour guides, interpreter and tour
managers
 Personalized services at destinEast StarTour and Travel on
 CoordinEast StarTour and Travel on with local tourist organizEast
StarTour and Travel ons at destinEast StarTour and Travel on
 Domestic and internEast StarTour and Travel onal air travel
 Hotel reservEast StarTour and Travel on, Car rental,Travel
documentEast StarTour and Travel on
 Airport facilitEast StarTour and Travel on,Foreign exchange
 Overseas travel insurance, Conference and seminar management
 Trade Fair/Exhibition visits
 Implant OperEast StarTour and Travel ons- in-house travel consultant
equipped with digitazide system.

 Business/trade delegEast StarTour and Travel ons and Incentive travel

in Ethiopia and Worldwide
2.2 Types of Tour Operator

Tour operators are classified as they do tour business and area of operEast StarTour and
Travel on of package tours. Each category of tour operator is unique in their own ways of
providing services. This classificEast StarTour and Travel on is suggested to distinguish
difference of meanings and functions. They are called as inbound tour operators, outbound
tour operators, domestic tour operators, specialist tour operators and ground tour operators.
These presents travel trade intermediaries that include types of travel agency and tour operators
development in phase two implementEast StarTour and Travel on during exapsion in business.

2.3 Package holiday
A tour package is a product of tour operator. It refers to travel service sold as a package, where
many services are bundled together for the convenience of travelers who don’t wish to spend
time making their own arrangement. Package tour may be sold both to group travelers and
independent travelers.
Package holiday is a fixed price salable travel product that makes it easy for traveler to buy and
enjoy a destinEast StarTour and Travel on or several destinEast StarTour and Travel ons.
Packages offer a mix of elements like transportEast StarTour and Travel on, accommodEast
StarTour and Travel on, restaurants, entertainment, cultural activities, sightseeing and car
rental. Packaging tours is an innovEast StarTour and Travel ve business concept that has
gained worldwide visibility since it was first introduced in the mid of nineteenth century.
Assembling basic and desirable services and offering them in one price is the primary function
of package tour business. This serves two important purposes:
• First, it is to reduce the unwanted hassles for the customers and provide value-for-money
services and
• Second, it is to give business opportunities to the travel agents, tour operators, transport
operators, accommodEast StarTour and Travel on service providers, event companies, etc.
Thus, a package tour is a sum total of services consisting of transport from the point of origin
to all traversing destinEast StarTour and Travel ons, accommodEast StarTour and Travel ons
at en route places and at the destinEast StarTour and Travel on, other recreEast StarTour and
Travel onal and travel services.
 Per day $68- $113.91 (3,831 Birr-6,390 birr) ( Meal,transport,hotel services )

 One Person one Week $476 (ETB26,819) this includes accommodEast StarTour and
Travel on, food, local transportEast StarTour and Travel on, and sightseeing.
 Two Person one Week $952 (53,639 birr), this includes accommodEast StarTour and
Travel on, food, local transportEast StarTour and Travel on, and sightseeing.

 A two week trip to Addis Ababa on average costs around $952 (ETB53,639) for one
person and $1,905 (ETB107,278) for two people. This cost includes accommodEast
StarTour and Travel on, food, local transportEast StarTour and Travel on, and
sightseeing.
 One MonthFor a couple $4,081(ETB229,881) this cost includes accommodEast
StarTour and Travel on, food, local transportEast StarTour and Travel on, and
sightseeing.
2.3.1 ClassificEast StarTour and Travel ons of Tour Packages

The package tour business was planned and organized after the conduct of organized package
tour to travel services Cost puls marigin updEast StarTour and Travel ng , Package holidays
can be escorted or unescorted given the needs and demands of customers.
A package tour comprises a combinEast StarTour and Travel on of two or more

components of services with an objective of helping the clients or customers save time &
cost and avoid uncertainties. It largely includes the services of transport, accommodEast
StarTour and Travel on, food, guide and other miscellaneous services. Moreover, transport and
accommodEast StarTour and Travel on form a significant proportion of the cost and service of
any organized package tour.
These services are offered at inclusive prices and customers primarily prefer to pay a single
price at one place as it is convenient for the high-end customers. Thus, pre-arranged services
are selected to be incorporated in the package on the basis of the quality of services and good
will of the service providers.
In addition, the design of package tour is done taking the travel trends and motivEast StarTour
and Travel on into considerEast StarTour and Travel on. Hence, tour operators evolve
strategies to increase the perceived value by combining complimentary products and services
in more attractive ways. Increasing the value and demand for a tourism product through
packaging and partnership is the ultimate objective of the tour operEast StarTour and Travel
on business.

2.3.2 ClassificEast StarTour and Travel on of Package Tours

The tour operator is a consolidator or wholesaler in assembling primary and related services
with a different price tag. However, packages are designed for the independent and group tours
after making comprehensive study and analysis. Broadly, all these package tours provide a
bundle of services to the customers who are generally leisure and business tourists.
The classificEast StarTour and Travel on is made on the basis of the operEast StarTour and
Travel on and types of services. Given the nature of package tour business, it may be
named as group tour, individual tour, sponsored tour, special interest tour and common
interest tour, guided tour, and escorted tour. Package tours are basically classified as
independent tour, escorted tour, hosted tour and incentive tour.
• Escorted Tour: An escorted tour is accompanied by qualified, trained and experienced tour
managers or guides, who provide informEast StarTour and Travel on and assistance to the
group at the origin, en- route and the destinEast StarTour and Travel ons about flight boarding,
and baggage handling, hotel check-in, meal arrangements along with interpretEast StarTour
and Travel on about the places of tourist importance during sightseeing. Tour escorts provide
timely assistance and advice about
the seEast StarTour and Travel ng arrangements in flights, trains, and sightseeing coaches.
For example, the affinity group package comprises the members of a community club to travel
together.
• Independent Tour: A package tour is designed for independent tourists or free
independent travelers. They are very much particular about selecting types of
destinEast StarTour and Travel ons, accommodEast StarTour and Travel on, and
transportEast StarTour and Travel on as it suits the budget, comfort and time. Each individual
element of service is purchased or a combinEast StarTour and Travel on of components
services is included in package.The independent tour largely includes domestic air tickets,
hotel room services, processing of travel formalities, arrival, and departure transfer, and
sightseeing.

Other services include adventure sports, cultural events, and health related activities that
generally enhance value of the independent tour. The cost of the package tour is relEast
StarTour and Travel vely high as it includes most of the customized services. For example, the
high-end or budget travelers prefer independent tours.
• Hosted Tour: A hosted tour is handled by the ground operator or destinEast

StarTour and Travel on management agency as an representEast StarTour and Travel ve of
wholesale tour operator for making ground services like cab, coach, guide, confirmEast
StarTour and Travel on of hotel rooms, tool taxes, entry tickets, etc as per the contract. A
hosted tour is one where the local ground operator becomes the host to receive the guests at the
destinEast StarTour and Travel on. This is a type of tour that brings in the concept of host-
guest relEast StarTour and Travel onship that leads to demonstrEast StarTour and Travel
ng the local culture and heritage to the guests. It provides a traditional reception upon the
arrivals of guests at the airports or railways stEast StarTour and Travel ons.
• Incentivized Tour: Incentivized Tour is usually all-inclusive package tours that include
all essential components of a standard package tour. It is organized package tour that is
conducted for employees with the sponsorship from the business firms or corporate houses. It
is an incentive or intangible reward for employees given periodically as per the organizEast
StarTour and Travel on’s policy. For example, Thomas Cook, and SOTC promote corporate
and MICE package tours.
2.3.3 Components of Package

The elements of a package tour determine the sale of package tour in the travel market. The
tour includes the services that are the sum total cost of related and complementary
services. Tour operators take the services from the airlines, hotels, cruises, railways, ground
transport, and event planner. In order to make to package tour more appealing and attractive,
tour wholesalers examine the buying ability of customers and the cost of components of the
package tour, and finally add a profit margin to arrive at the final price of the package tour.
Generally, tour packages are determined by the market demand and trends and tour companies
try to reduce the cost of buying the services through aggressive negotiEast StarTour and Travel

ons and position the packages at the right time to have the flexibility of giving price tag. Tour
operators assemble components of services to enrich the experience of tourists. The following
component of services is delivered assembled in package tours. These are the following
elements of package tours.
AccommodEast StarTour and Travel on: AccommodEast StarTour and Travel on is an

important component of package tour and it constitutes almost one third cost of package. There
are primary and supplementary accommodEast StarTour and Travel on service providers. The
star hotels, business hotels, resorts and internEast StarTour and Travel onal hotels are the
conventional accommodEast StarTour and Travel on operators with the provision of providing
room cum food services. The supplementary accommodEast StarTour and Travel on service
providers are lodges, guest houses, bungalows, service apartments, etc. Tour operators include
the services of both the categories depending on the cost of package tours and affordability of
customers.
Sightseeing Tour: Sightseeing is one of the most important elements of a package tour. It is an
integral part of a package tour as it offers conducted tours to the places of tourist interest in the
cities. Tour operators arrange for more activities in the sightseeing or excursion tours. Each
member of the conducted sightseeing tour is billed in such a manner that the cost of cars or
coach services is equally divided among them.
Airlines:Air travel is an important component in the package tour segment. This includes
internEast StarTour and Travel onal and domestic flight tickets and on-board services. Tour
operators can include the first class, business class, economy class, excursion fare in the
package tour to cater different segments of customers.
Car Rental Service: Luxury car service is an important element of package tour as it
is primarily needed at the time of arrival, departure and sightseeing. A wide range of luxury
cars is customized for sightseeing and excursion tours. An annual contract with flat rate is done
for the smooth operEast StarTour and Travel on of car rental services. Tour operators have
now adopted the latest technology to make the schedule of cars.

Cruise or Ferry Services: Cruise Liners themselves promote the all-inclusive packages and
get it promoted through the wholesale and retail travel agent. They include room, food, drinks,
sightseeing, entertainment, casino, etc on–board. Package tours also comprise the service of
ferry operators so as to provide alternEast StarTour and Travel ve and safe conveyance
service.
Event Services: Tour operators take the services the MICE operators for the purpose of
booking venues, food, conference kits, and pre & post-conference sightseeing programmes.
Event management companies appoint tour wholesalers to sell the packages.
Insurance: Tour packages are insured for compensEast StarTour and Travel on to the tour
operators or guests in the event of cancellEast StarTour and Travel on. Thus, insurance is
included in the package tour. Health and luggage insurance are included the package tour.
Ground Handling Services: Apart from arranging the luxury cars and coaches, the services of
guides and language interpreters, entrance fees and transfer and drop are also included in the
package tour.
Miscellaneous Services: This service includes porter at airports stEast StarTour and Travel
ons, tips to guides, interpreters and room boys, entrance fees, gifts and welcome dinners.
2.4 Tour OperEast StarTour and Travel on Products

A tour product is different from most other product because what is being sold is the
consumption of an experience rather than tangible product. The “product” is primarily service-
based. This means that the customer often walks away from the tourism offering with only a
memory or experience.
An example of this would be a tourist’s overnight experience at a bed and breakfast. The bed
and breakfast establishment will offer a meal, a wakeup call, or possibly advice on local tourist
attraction in the area. All of which are forms of services. So when we talk about “tourism
product’ it means the combinEast StarTour and Travel on of products and particularly
services, which make up the total experience.

The Tour operator’s product is different to that sold by other business in many ways and
understanding this will go a long way to being successful
1. What you are selling is an intangible product that must be bought blind because it cannot
been seen, touched or experienced by the consumer before use. Instead, tour operators prepare
brochures which represent their products in words and pictures. These brochures cannot
accurately give an impression of how any one particular client will experience the product, so
sellers are often described as selling dreams. Buying a holiday is like buying a bar of
chocolate; only memories are left after the product is consumed.
2. You are selling a discretionary product, meaning that the clients do not have to buy it in the
same way that they do food or fuel. When finance are tight or during a recession, they may
choose to spend their money that would have gone on a holiday on other consumer durables
such as compact disc player or new washing machine.
3. It is not a heterogeneous product. You could buy a refrigerator like your neighbor’s and
expect it to look identical and operate in exactly the same way, but holidays are by their very
nature varied. Anyone coming to Ethiopia on a historical and cultural tour will have a different
experience whether they come in July or October, even if they went with the same operator,
stayed in the same hotels and ate at the same restaurants.
4. It is a perishable product. Holidays are only saleable up to the date of the flight departures,
especially if you organize fixed date trips.
5. Package holidays suffers from inseparability. The behavior of everyone involved in the
product, from the hotel porter to the vehicle driver can have an effect on the outcome of the
experience. If we purchase a washing machine, our enjoyment of the product will not be
reduced by an irritEast StarTour and Travel ng plumber how installs it.
2.5 Tailor-Made/Custom Tour

A tailor-made tour is an independent tour designed to meet the needs of an individual client. At
one time, tailor-made tours were called FIT, for “foreign independent travel,” or DIT, for

“domestic independent travel.” In recent years, the term FIT has become so widespread that
almost any type of tailor-made tour is referred to as an FIT.
In a typical FIT, every detail of the traveler’s itinerary from departure to return may be planned
in advance. Sight-seeing tours, sports programs, theater tickets, or other activities may
be included in the tour. Package tours are often used as building blocks in creEast StarTour and
Travel ng an FIT. Designing tailor made tours
Designing tailor made tours require considerable research into client needs as well as the
availability of travel components. If foreign destinEast StarTour and Travel ons are involved,
the process is potentially time-consuming and expensive. However, many clients still prefer
tailor-made tours, hoping to combine the benefits of a tour with maximum flexibility.
2.5.1 Handling Tailor Made Tours

1. DestinEast StarTour and Travel on
Travel agents need the concrete destinEast StarTour and Travel on of their clients. If
their clients don’t have the concrete destinEast StarTour and Travel on, they have to
recommend some destinEast StarTour and Travel on after getting more informEast StarTour
and Travel on.
2. Period
Travel agents have to know the client’s travel period, because there are many kinds of air-
tickets based on the period such as 10 fix, 30 fix, 2M open, 1Y open and so on. The price and
booking priorities of air-tickets are decided by the period. And if time-consuming is not
enough for the client’s distinction or the period, travel agents encourage changing the
destinEast StarTour and Travel on or the period to their clients.
3. Budget
Travel agents have to grasp the client’s budget for their travel. If their budget is fix and is not
enough for the client’s distinction or the period, travel agents encourage changing the
destinEast StarTour and Travel on or the period to their clients.

4. Trip Purpose
When any of the above 3 points do not fill the demand of the clients, the travel agents propose
other destinEast StarTour and Travel ons to their clients after the period and budget are
considered. It is important for travel agents to grasp the trip purpose the client in this case.
5. Selection of AccommodEast StarTour and Travel ons
There are many types of accommodEast StarTour and Travel ons such as hotels, Inns, camps
and so on. Every clients want comfortable for accommodEast StarTour and Travel ons, but the
concept of comfortable differs by clients. Some clients want to stay deluxe hotels which have 5
stars to enjoy their hotel life, but other clients want to stay economical hotels to serve their
money.
Agents have to grasp the client’s the concept of comfortable and recommend them some hotels
matching with their tastes.
6. Airport Transfer
A city area is far from an airport usually. There are public transfer systems or taxi services
which access to a city area from an airport. However some clients can not use them by
themselves. For example, they are clients who have no experience to go abroad.
In this case, agents propose them to arrange the airport transportEast StarTour and Travel on
services in an advance to secure the relief and safety of clients.
7. Activities in Host Country
Most of the FIT travelers aren’t sEast StarTour and Travel sfied with the contents of package
tours, because the contents are excessive and also be shortage.
Travel agents need discover the desires of their clients with the interview and construct the
contents which they are sEast StarTour and Travel sfied with.
8. EstimEast StarTour and Travel on

Of course, travel agents need estimate the tour fee for a client; because a tailor-made tour is
ordinal merchandise for each a client.
2.5.2 City Transport Services

A Child TransportEast StarTour and Travel on Services involves transporting toddlers and
school children from their homes to their schools and back, and for other events. The fact that
there are loads of schools in Bahir Dar AdministrEast StarTour and Travel on City that child
transportEast StarTour and Travel on services is a viable business. A Child transportEast
StarTour and Travel on service is part of the public bus services industry and this industry
includes companies that primarily provide bus services to students in grades K.G -12. The
School bus is providing transport service from school, as well as between school events, field
trips, camps and other educEast StarTour and Travel onal events.
In Developed Countries the best and the most efficient, though expensive, social services are
provided by the private sector. The participEast StarTour and Travel on of the private sector in
the provision of social and other services will expand the volume of these services and also
will reduce the burden of different schools and families which provide such services. It will
also give more choices to users of these services. Those who can afford will go to private
organizEast StarTour and Travel ons and the rest use the services by families or schools.The
proposed project service offering a convenient and affordable solution to the transportEast
StarTour and Travel on issue many Kinder Garden ( K.G) schools, Primary (Grade 1-8)
students and high school (9-12) students face the problem for Government and Private
Schools in Bahirdar every seasons.
Initially, the proposed project will be start to service for three up to four schools center to
Bahirdar city such as Bahirdar Academy, SOS , and Catholic Schools . As the Service expands
up to five Schools, The service pick-up times will be at 1:00 am and 1:40 am. And also the bus
service will be continue afternoon at 9:00 pm up to 9; 45 O’clock. The proposed project also
provides School buses transport students to and from school, as well as between school events,
field trips, camps and other educEast StarTour and Travel onal events. And also, the Tour
program will be serving for every interested society.

TransportEast StarTour and Travel on is a vital root of blood; therefore, the Government of
Ethiopia has adopted a new Trade and TransportEast StarTour and Travel on Sector
Development Policy and Program in 1994 to make this sector as one of the pillars for poverty
reduction and for benefits of the societies. I line with the Government policy and program, the
Amhara Regional Government has developed its own policy and program.
3. MARKET STUDY AND SERVICE DELIVERY
3.1. Market Study
3.1.1 Global Tourism Outlook

Despite occasional shocks, internEast StarTour and Travel onal tourism has continued to
experience expansion and diversificEast StarTour and Travel on that has seen the industry
becoming one of the largest and fastest-growing economic sectors in the world. According to
the UNWTO, internEast StarTour and Travel onal tourist arrivals have been rising steadily
from 25 million in 1950 to 278 million in 1980, 528 million in 1995 and 1,087 million in
2013. Further, as per UNWTO's long term forecast Tourism Towards 2030, this figure is
expected to increase by 3.3% a year from 2010 to 2030 to reach 1.8 billion by 2030.
3.1.2 Competitive Analysis of Ethiopia's Travel and Tourism Industry

Ethiopia's global and regional ranking has been consistently improving over the years rising
from position 123 in 2009, to 122 in 2011 and 120 in 2013. This, though still below other
countries in the Sub-Saharan region offering similar tourism products, is a remarkable
achievement compared to South Africa, Kenya, Rwanda and Tanzania, each of which has not
been consistent in competitiveness over the period under considerEast StarTour and Travel
on. Table 2.3 below analyses the country's competitiveness as it compares to selected countries
within the South Sahara Africa.
Overall, out of the 140 economies ranked by the TTCI in 2013, the country performs relEast
StarTour and Travel vely well in a number of areas including in the travel and tourism
sector price competitiveness (position 22). This is attributable to the country ranking as
second globally in purchasing power parity (a measure of the extent to which goods and

services in the country are more or less expensive than elsewhere) and relEast StarTour and
Travel vely low fuel prices (position 29).
The country's second best performance is in her natural resources (position 33 globally)
marked by the presence of her natural World Heritage Site (rank 45), and the presence, in the
country, of known threatened species (26). However, compared to other Sub-Saharan African
countries within this regional set, this performance is only better than Rwanda's position 69,
with Tanzania being at position 4 globally.
The other areas of a fairly favourable global ranking are the country's cultural resources
(position 82) as a result of the number of cultural World Heritage Sites (rank 45) in which the
country performs better than her regional neighbours; Safety and security (position 90)
marked by low levels of business costs of crime and violence (position 22) which is, however,
compromised by the high number of road traffic accidents (position 130); and Environmental
sustainability (position 90)- marked by a substantially lowlevel of carbon dioxide emission
(position 6).
3.1.3 Market Needs

Many potential customers are unsure of the locEast StarTour and Travel on they wish to reach.
Part of the value associated with travel agencies is the knowledge they possess about
destinEast StarTour and Travel ons. Customers look to the agency to provide them with sound
advice for a competitive price. EAST STARTOUR AND TRAVEL is confident in its ability
to do so. Time is a precious commodity. EAST STARTOUR AND TRAVEL can save the
customer time and money, and help to ensure that they are sEast StarTour and Travel sfied
with their vacEast StarTour and Travel on.
3.1.4 Market Trends

One notable trend in the travel industry is increased deregulEast StarTour and Travel on.
DeregulEast StarTour and Travel on has increased the need for differentiEast StarTour and
Travel on and has, in many cases, lowered the prices of airfare and other travel related
services. Additional trends include caps on agency commissions by many of the larger airlines,
increases in adventure travel, and reduction of profit margins.

The contribution of the tourism sector to Ethiopia's economy is supported by a steady

increase in internEast StarTour and Travel onal arrivals. In 2013, Ethiopia generated ETB
41,021.7mn in visitor exports. In 2014, this is expected to grow by 4.3%, and the country is
expected to attract 588,000 internEast StarTour and Travel onal tourist arrivals. By 2024,
internEast StarTour and Travel onal tourist arrivals are forecast to total 815,000, generEast
StarTour and Travel ng expenditure of ETB 63,375.8m, an increase of 4.0% p.a. This shows
the growth trajectory of the internEast StarTour and Travel onal arrivals and tourist receipts
between 2004 and 2013 including projections for 2014 and 2024. The tourist receipts generally
have been increasing and are expected to continue to do so in future.
It is important to note that the slump in 2009 could have been attributed to the 2008 global
financial crisis that resulted in the slowing down of the global economy. In addition, the fact
that during the same periods, Kenya, also experienced similar slump in tourist receipts due to
mainly political and civil unrest, implies that the prevailing regional scenario also impacts
tourism development in the country. This is evidence of the sensitivity of the industry to
external factors
3.1.5 Market Growth

The travel industry is growing. Reasons for this growth include a healthy domestic economy
and the devaluEast StarTour and Travel on of currency in other regions which has made travel
less expensive for U.S. residents. Leisure travel has increased by 3.2% in 1997 and is predicted
to grow 2.0% in 1998. The healthy economy has increased business which in turn boosted
domestic business travel 4.8% in 1997 with an estimated increase of 3.6% in 1998. Adventure
travel,
which is growing 10% annually, is one of the fastest growing segments of the travel industry.
StEast StarTour and Travel stics show that 8,000 U.S. companies offered adventure packages
that generated $7 billion in 1997. There also has been a 66% increase in executive participEast
StarTour and Travel on in adventure travel between 1992 and 1996.

3.2 Service Deliver

The Ethiopia travel and tourism industry is the nEast StarTour and Travel on's third largest
retail industry, and the Ethiopia says that it will be number one by the year 2000. Revenues
from travel have increased approximately 100% in the last decade. U.S. travel agencies
produce over $100 billion in revenues each year. The market is separated into two main
categories, business and leisure travel. Each contribute about 45% to total revenues. The
remainder of revenues are generated from combined business/leisure trips. The market is
further separated into domestic and internEast StarTour and Travel onal travel. Domestic
travel accounts for approximately
70% of industry revenues. Business travel can be divided into two categories, the medium to
large corporate account and the small independent businessman. Leisure travelers are classified
according to the types of trips they take, income, or age.
3.2.1 Business Participants

The travel industry is similar to many others. There are large nEast StarTour and Travel onal
chains, small home- based businesses, consolidators on the Internet, etc. Membership numbers
in some of the travel related associEast StarTour and Travel ons give some indicEast StarTour
and Travel on of the number of participants in this market. The American Society of Travel
Agents (ASTA) reports 25,000 members in 135 countries, most of whom are small businesses.
The AssociEast StarTour and Travel on of Retail Travel Agencies (ARTA) has another 3,000
members. In addition, there are many agencies not affiliated with these associEast StarTour
and Travel ons but with one or more of the approximately 35 travel industry organizEast
StarTour and Travel ons in the country. EAST STARTOUR AND TRAVEL has
approximately 30 immediate competitors in the greater Woodville area, including two agencies
that are branches of nEast StarTour and Travel onal travel agency chains.
3.2.2 Tourism Resources and Products

It is widely acknowledged that Ethiopia possesses remarkable tourism potential in its unique
and largely unexplored cultural, historical, archaeological and natural resources. Those
resources are key to attract visitors and are the basis on which to build a strong tourism
industry. With its 3,000 years of history and more than 80 ethnic communities each with

their own distinct languages, cultures and traditions, Ethiopia stands out as a unique country in
Africa. The following is an outline of the country's tourism resources and products.
World Heritage Sites; UNESCO has recognised the uniqueness of Ethiopian heritage and the
country is home to nine World Heritage Sites, i.e. eight cultural and one natural site. This is
the highest number in Africa, only compared to Morocco. In 2013, the Meske/ Festival was
inscribed on UNESCO's RepresentEast StarTour and Travel ve List of the Intangible Cultural
Heritage of Humanity. In addition, the country to date has five properties in the UNESCO's
TentEast StarTour and Travel ve List.
No Name of Trousit Site LocEast StarTour and Travel on Vear

1 Konso Cultural Landscape Southern NEast StarTour and Travel 2011
2 Harar Jugol, the Fortified Historic Harari Region 2006
3 Aksum Tigray Region 1980
4 Lower Valley of the Awash Afar Region 1980
5 Lower Valley of the Omo Southern NEast StarTour and Travel 1980
6 Tiya Southern NEast StarTour and Travel 1980
7 Fasil Ghebbi, Gondar Region Amhara Region 1979
8 Rock-Hewn Churches, Lalibela Amhara Region 1978
9 Simien Mountains NEast StarTour Amhara Region 1978
and Travel
Ethiopia onal Park
UNESCO World Heritage Sites
Source: UNESCO
3.2.3 Market Size

From the Above government and private schools there are many students in Bahirdar city from
K.G up to High school students. The Total number of students, Potential Market and
addressable market and others are shown below in Table 2.
Based upon the percentages calculated from our survey results, of the 113,818 students are in
Government and private schools in Bahirdar city. Out of these, 88,141 students are potential
market and 25,677 students will be utilizing the school bus transport and tour service. Our
projected student’s base consists of 4% of the addressable market, which are 1,027 students.
Table 3: Market Growth
Year 2 Year 3

Total No Potential Addressa PenetrEast Total No of Potential Addressabl Penetr

of Market ble StarTour Students in Market e Market East
students Market and Travel Government& StarT
in on Private our
Governm and
ent & Travel
Private on
K.G Students 29,571 19,527 11,196 445 30,105 20,308 11,643 466
Elementary and 65,647 53,979 14,225 569 65,800 56,138 14,794 792
secondary
(Grade 1-8 )
students
High Schools 18,708 18,160 1,283 51 18,906 18,886 1,334 53

(Grade 9-12 )
students
Total 113,926 91,667 26,704 1,068 114,811 95,334 27,772 1,111
From the above Table two, the Market Growth of the proposed project records show that on
average there is an approximate 4% increase in enrollment each year. Therefore, we are
assuming that our potential and addressable market will also increase by 4%. In addition, the
student bus transportEast StarTour and Travel on and tour service continues to grow and we
assume that this growth will also increase our addressable market.
3.3 Service strategy

In the first year of oper East StarTour and Travel on, the proposed project will run four
vehicles leasing such as Two Hairuf, Two coster buses by purchasing and with three buses by
rental to provide Tour and Travel services East StarTour and Travel on service to Customer
demand tour & travel service to the society . By the second and the third years, will be adding
seven and eight different buses respectively expand packaging services for local vistors &
traveler .

3.2.1Target Market Segment Strategy

East StarTour and Travel is located in the heart of the Amhara Regiona state Bahir Dar City.
The natural beauty and abundance of outdoor activities attract many fitness oriented
individuals. Per capita, the area has more people than any other in the East StarTour and Travel
on who actively participate in mountain and water sports such as skiing, climbing, kayaking,
whitewater rafting, mountain biking, etc. These are the people in East StarTour and Travel
target market. East Startour And Travel will focus on the sale and promotion of adventure
travel primarily to individuals, but also to corporate clients in the Bahir Dar City Adminstration
main office and branch in Addis Ababa.
3.3.1 Sales Strategies
Epic escapade travel & tours will sell the benefits of the services it promotes and the luxury
tours it offers. Epic escapade travel & tours will provide clients with all the arrangements
which they can foresee, as well as many they would not have contemplated. Our concern is not
to maximize profits on any individual sale, but to sEast StarTour and Travel sfy the client. We
are confident that doing so will reduce costs and increase profits in the long run. It is less
expensive to maintain a relEast StarTour and Travel onship than it is to create a new one. We
believe in the value of the travel we sell and we are confident that we can sEast StarTour and
Travel sfy our target market which is the foreigner travelers and the local travelers as well.
3.3.2 Distribution of Tourist Products

Sale of a tourist product, defined as an inclusive tour or packaged holiday, is influenced by
distribution systems in the travel industry. InformEast StarTour and Travel on technology,
informEast StarTour and Travel on communic East StarTour and Travel on technology,
technological advancements and opportunities provided by the internet to purchase tourist
products have impacts on product choice.
Although tourists seem to be independent in their choices by using informEast StarTour and
Travel on technologies, the electronic distribution media are created by informEast StarTour
and Travel on technology firms and intern East StarTour and Travel onal tour operators that
limit the choices of tourists in line with the interests of these companies. Though these
companies form a different opportunity for tourist product form East StarTour and Travel on

and purchase, tourists have limited flexibility in their choices since the product made available
through electronic distribution networks have to comply with the standards, norms and
membership rules set up by informEast StarTour and Travel on technology companies either
owned by tour operators or independent entities. If the products are not high-quality nor
complying with modern standards, they are not included in the electronic distribution
networks. Also, the principals and suppliers have to accept the membership rules and fees, and
pay high commissions in return for reservEast StarTour and Travel ons they receive.
Electronic distribution networks are dominant features of the travel industry and opportunities
created by inform East StarTour and Travel on technology and inform East StarTour and
Travel on communic East StarTour and Travel on technology companies facilitate the
distribution and purchase of tourist products.Some of the electronic media are listed below.
These can also be classified as direct reservEast StarTour and Travel on intermediaries and
indirect reservEast StarTour and Travel on sites. The direct reserv East StarTour and Travel
on sites (e.g.,, booking.com) serve end customers directly whereas indirect reserv East
StarTour and Travel on intermediaries (e.g.,, Sabre) serve travel trade organiz East StarTour
and Travel ons and operate mainly B2B
3.3.3 Supply and the capacity of the Bus

The capacity of the coaster single bus has 28 seats and one chair carries 3 children, so totally in
a single bus has 26-29 seats and will move at three trips. So, a single bus can carry 126
students at one time. Therefore, 1,027 Tourist needs almost eight school buses for pick up and
depart the students from home to school and from school to home.

4.TECHNICAL STUDY
4.1 Functions of Travel Agencies and Tour Operators
 Travel Agencies (The Travel Mart.）

The word mart, short for market-place, refers to the many outlets through which people can
obtain travel informEast StarTour and Travel on, make reservEast StarTour and Travel
ons and pay for trips. This component includes retail travel agencies, business travel
department, scheduled airline ticket offices and travel clubs.
In the retail travel agency, travel agents deal with all kinds of clients. Travel agents help
excited travelers plan their trips, make reservEast StarTour and Travel ons and obtain
tickets. Some agencies specialize in a specific type of travel: business or pleasure, domestic
or internEast StarTour and Travel onal, individual or group.
A travel agency is one that makes arrangement of travel tickets (air, rail, road and sea);
travel documents (passport, visa and other documents for travel), accommodEast StarTour
and Travel on, entertainment and other travel related services from the principal
suppliers. It may also secure travel insurance, foreign currency for the traveling people.
Some corporEast StarTour and Travel ons have their own business travel departments for
the business travel arrangement of employees. And travelers can also purchase travel
products through a travel club. Travel club specialize in selling unsold travel products at
discount price.
 Tour Operators (Wholesale Companies）
An organizEast StarTour and Travel on, firm or company which buys individual travel
components, separately from their suppliers and combines them into a package tour, which
is sold with their own price tag to the public directly or through middlemen is called a tour
operator. More precisely, tour operators are mainly responsible for delivering and
performing the services specified in a given package tour. They can provide these services
themselves as some have their own cars

and coaches, hotels and other travel related services or can obtain these from other suppliers.
That is why they are called manufacturers of tourism products.
Tour operators are sometimes called wholesalers but this is partially true because a
wholesaler buys goods or services in bulk at his own account to prepare a tour package and
then retails it through the travel agencies or directly to the clients. However, a tour operator
who has his own one or more tourist product components formulates a new tourist product
for example ‘inclusive tours’. Tour Operators generally offer variety of package tours to
cater to the needs of different kind of travelers.
Wholesale Companies buy the products of Air TransportEast StarTour and Travel on and
Services, Maritime TransportEast StarTour and Travel on and Services, Ground
TransportEast StarTour and Travel on and Services, The Hospitality Industry and The
Tourism Industry. Because they buy in large quantities, they receive discounts. Wholesalers
make a profit by marking up the price of the products and then selling them through retail
travel agencies.
There are three main types of wholesale operEast StarTour and Travel
ons in the travel industry.
1. Charter operators buy airplane seats, hotel rooms, car rentals or other travel products and
sale them to tour operators or to the public.
2. Tour operators assemble transportEast StarTour and Travel on, lodging and sightseeing
packages for various groups of travelers; they usually provide the group with an escort or
guide.
3. Inbound operators are specialized types of tour operators providing travel package for
foreign visitors to Ethiopia.
4.2 Typical Flow of Tourism Arrangements in Ethiopia

Company A: Travel Agency / Tour Operator (Foreign Country)
Company B: Travel Agency / Tour Operator (Host Country: Capital)
Company C: Travel Agency / Tour Operator (Host country: Provinces)
Order from Abroad Company
Tourist ⇒⇒⇒ Company A

Air: Company A ⇒⇒⇒（Wholesaler: X）⇒⇒⇒Airline(Int’l) Land:

Company A ⇒⇒⇒（Wholesaler: L）⇒⇒⇒Company B
・CoordinEast StarTour and Travel on in Capital City
Company B ⇒⇒⇒ Hotel, Tour Guide, TransportEast StarTour and Travel on, Restaurant
・CoordinEast StarTour and Travel on out of Capital City
Company B ⇒⇒⇒ Hotel, Airline(ET: Domestic), Company C
Company C ⇒⇒⇒ Tour Guide, TransportEast StarTour and
Travel on, Restaurant
Walk-In Guest :Tourist ⇒⇒⇒ Company B
・CoordinEast StarTour and Travel on in Capital City
Company B ⇒⇒⇒ Hotel, Tour Guide, TransportEast StarTour and Travel on, Restaurant
・CoordinEast StarTour and Travel on out of Capital City
Company B ⇒⇒⇒ Hotel, Airline(ET: Domestic), Company C Company C
⇒⇒⇒ Tour Guide, Transport East StarTour and Travel on, Restaurant
・Air ticket sales

4.3 Types of Travel Agencies and Tour Operators

a. Out-bound Tourism: Origin Country
 Travel Agency
Retail Travel agencies

Retail travel agency is a store which sells package tours, air tickets, etc. that were provided from
wholesalers in a basic meaning.
However actual situEast StarTour and Travel on differs from this definition. Some of travel
agencies have an agreement with airlines and hotels directly or have branch offices in foreign
countries to make their own travel products. Therefore, it is becoming difficult to distinguish
between Travel Agencies and tour operators recently.
Retail travel agencies are operated independently or the branch office as part of a chain. They are
located in department stores, shopping males, or suburban and downtown business districts.
Some agencies specialize in a specific type of travel. That is, business or pleasure, individual or
groups, air or cruise, private or government, travel purposes, client’s social classes and age, and
destinEast StarTour and Travel ons.
Business Travel Departments（BTD）
Some corporEast StarTour and Travel ons have their own business travel departments for
the business travel arrangement of employees traveling for business purposes. Sometimes,
they have their own travel agencies for this purpose. We call them “In-house Agency”
usually. Workers in a BTD and “In-house Agency” carry out work similar to that done by travel
agents. The main difference is that the customers are company employees only and most travel
arrangements are for business purpose.
However, several in “In-house Agency” are expanding a business for the public recently.
On Line Travel Agencies

Internet providers sell travel components for customers on line. They have a license of Travel
agency by themselves or make a contract with other travel agencies or tour operators. They have
unsubstantial shops, that is, internet malls. Of course, the other kind of travel agencies use
internet as their sales tools.

Travel Club
Travelers can also purchase travel products through a Travel Club. Travel Clubs specialize in
selling unsold travel products, such as a cabin on a cruise ship or an airline ticket at discount
prices. To take advantage of these travel bargains, Travel Club members an annual fee and
must have flexible schedules so that they can leave for a trip on short notice.
This system is common in United States but it is not in the
world.
・Tour Operator
Package Tour Organizer
Tour Operator means Package tour Organizer,
usually. Air Ticket Whole Sale Company
Some package tour organizers sell air ticket to travel agencies, because they must stock seats
of some airplanes voluminously to keep cheap price for their package tours. There is the
company which has quit the sales of package tours and be specializing in the sales of aviEast
StarTour and Travel on tickets. The system that stocks voluminously and sells them to
retailers is a usual commerce custom.
Cruise Whole Sale Company
This is the same system as the above
fundamentally. Land OperEast StarTour and
Travel ng Company
Land OperEast StarTour and Travel ng Company is likely to the bridge between the travel
agencies of host countries and the travel agencies of origin countries. Namely, Land OperEast
StarTour and Travel ng Companies transmits the order to the travel agencies of host country
from the travel agencies of origin country. Also, Land OperEast StarTour and Travel ng
Companies collect tour fee from the travel agencies of origin countries and transfer tour fee
to the travel agencies of host country.
While the destinEast StarTour and Travel on of clients is various, each travel agencies and
tour operators don’t make a contract with the travel agencies of host countries all over the
world, because most of the travel agencies don’t have connection with the host country and the
trouble of transferring foreign currency is required also.

Besides, Land OperEast StarTour and Travel ng Companies give the informEast StarTour
and Travel on about host country to the travel agencies in origin country.
Hotel Rep（Hotel RepresentEast StarTour and Travel ve）
Hotel Rep is the company which handles the reservEast StarTour and Travel on only hotels.
Hotel Rep is divided to 2 kinds largely. One of these is Hotel Rep made by hotels which are
unfolding the world wide chain. These Hotel Reps make a reservEast StarTour and Travel on
of the group hotels only. Another is an independent
Hotel Rep. These make a contract with each hotel directly or through the travel agencies of
host countries. The discount rate is adapted to this contract usually.
Hotel Rep sales their hotel reservEast StarTour and Travel ons to clients through travel
agencies and directly. In the case that Hotel Rep sales their hotel reservEast StarTour and
Travel ons to clients through travel agencies, they pay commissions to travel agencies.
b. Inbound Tourism: Host Country
Land OperEast StarTour and Travel
ng Company
This means the company which makes the various arrangements about tourism inside
host countries. Generally, the travel agencies of host countries manage this business. The
contents of these company’s operEast StarTour and Travel ons are making reservEast
StarTour and Travel ons of hotels and restaurants, and arrangements of car and tour guide, for
example.
It is important for Land OperEast StarTour and Travel ng Companies to give the informEast
StarTour and Travel on needed for tourists about host country to the contract company in
origin country.
c. Internal Tourism
Retail Travel agencies
The function is almost same in the case of outbound
tourism. Package Tour Organizer
The function is almost same in the case of outbound
tourism. Land OperEast StarTour and Travel ng
Company

Even if it is domestically, it is difficult for the travel agency to arrange tours when the
destinEast StarTour and Travel on of clients is far from there. In such a case, the travel agency
orders the substitution of the arrangement to the travel agency where is in the destinEast
StarTour and Travel on of clients.
4.4 Functions of Travel Agencies
A travel agency sells arrangements directly to the public. More specially, an agency sells air,
and sea transportEast StarTour and Travel on; lodging accommodEast StarTour and Travel
ons; cruise trips; package tours; travel insurance; and other related products. Some travel
agencies combine retail and wholesale activities on the same premises. For example,
American Express Travel Related Service offices5 sell tour packages to other travel agencies
and also provide retail services to the public. Thomas Cook USA, 6 an outgrowth of the
world’s first travel agency, also sells both retail and wholesale products. An in-plant or in-
house agency is a department or division of company set up to handle the travel requirements
of the company’s employees.
4.5 Booking Services
NegotiEast StarTour and Travel on &NegotiEast StarTour and Travel on Types Making a
negotiEast StarTour and Travel on and contract
NegotiEast StarTour and Travel ons are first step for making contracts for all businesses.
When tour operators negotiate with hotels, airline companies and others about their
contracts, it is clear that the existing sales achievements are most important for negotiEast
StarTour and Travel ons.
Furthermore, it is better to show your tour brochures, stEast StarTour and Travel
stical materials and recommendEast StarTour and Travel ons from a third party to
negotiEast StarTour and Travel on partners.
However, the contract in the highest condition is not able to expect from the beginning.
If the companies have no existing achievements at the time of business, they must be
devoted to sell the merchandise of other Tour Operators.
At first, it is important to obtain trust, to make some connections and to build the
achievement from these activities.

Renewal of a contract & Improvement of the conditions

Airline companies and hotels expect tour operators to sell their seats or rooms
voluminously.
Airline companies and hotels examine each tour operator from the sales quantity of the
former period.
In other words, they don‘t make a contract with poor prospect customers.
Then they decide the next conditions of a contract on the basis of the examinEast
StarTour and Travel on.
4.6Tactics of negotiEast StarTour and Travel on

Structures of negotiEast StarTour and Travel on. The structure of negotiEast StarTour and
Travel ons is various.Below, is the structure of negotiEast StarTour and Travel
1. Number of the negotiEast StarTour and Travel on participants, NegotiEast StarTour and
Travel on between 2 groups:
In this case, it is easy to grasp the negotiEast StarTour and Travel on partner and
establish the strategy, so the negotiEast StarTour and Travel on is simple.
NegotiEast StarTour and Travel on between 3 or more groups:
In this case, groups whose interest is the same benefit connect each other, so negotiEast StarTour
and Travel on is complicated with the element of ―Power Game.
2. Position of the negotiEast StarTour and Travel on person
Simple layer negotiEast StarTour and Travel on:
• In this case, an actual negotiator can come to a conclusion directly.
• Therefore, the negotiEast StarTour and Travel on is simple.
Double layer negotiEast StarTour and Travel on:
• In this case, a negotiator is just the representEast StarTour and Travel ve of an organizEast
StarTour and Travel on.

• A conclusion needs the agreement inside the partner organizEast StarTour and Travel on.
• Therefore, negotiEast StarTour and Travel on is complicated.
3. Power distribution of the negotiator
Symmetric negotiEast StarTour and Travel on:
• In this case, each negotiator has equal power.
Non-symmetric negotiEast StarTour and Travel on:
• In this case, some negotiator has strong power and another has weak power such as the
negotiEast StarTour and Travel on between parent and child.
• The weak must know the lowest compromise point clearly at the negotiEast StarTour and
Travel on.
Tactics of NegotiEast StarTour and Travel on
You have to use the tactics corresponding to each negotiEast StarTour and Travel on to
negotiate efficiently.
1. Threat
The threat is the simplest negotiEast StarTour and Travel on tactics. For example, the direct
threat has a big effect for the hotel such as ―We will make a reservEast StarTour and Travel on
to other hotel if you do not offer rooms cheaply. However, this tactics is effective in only when
the relEast StarTour and Travel on between the hotel and you is perfect casual situEast StarTour
and Travel on and there is an alternate plan abundantly. Therefore, the threat is a last resort.
2. ReputEast StarTour and Travel on establishment tactics
This is the tactics that establishes a reputEast StarTour and Travel on by accumulEast StarTour
and Travel ng an achievement and tries to proceed with a negotiEast StarTour and Travel on
advantageously. You can obtain the trust of a partner if you get the reputEast StarTour and

Travel on that has not betray a partner in the past. Therefore, your negotiEast StarTour and
Travel on goes ahead smoothly.
3. Good Cop/Bad Cop Tactics
This is the method for a hard negotiEast StarTour and Travel on without deteriorEast StarTour
and Travel ng the human relEast StarTour and Travel ons. You make a negotiEast StarTour and
Travel on partner think that you are a friendly person by making other bad fellows intentionally.
For example, say, ―I think this attaches conditions enough but my boss doesn‘t agree with
this."As a result, you can obtain the compromise of a partner easily.
4. REast StarTour and Travel ficEast StarTour and Travel on tactics
This means that you have a rEast StarTour and Travel ficEast StarTour and Travel on procedure
before making a final conclusion such as resolution of a board of directors meeting. Thus, you
can avoid the risk that has made a contract with the pace of a partner. This tactics is effective to
take a rest and keep your coolness before making a contract officially.
6.3 Contracting techniques
There are three main types of contracts used in touroperEast StarTour and Travel ng:
a) Commitment/guarantee – where the tour operator guarantees to pay for a certain

number of bed spaces
b) AllocEast StarTour and Travel on and release back – where the tour operator agrees an
allocEast StarTour and Travel on of a certain number of bed spaces with the hotel and agrees to
give back any that it has not sold by a certain date
c) Ad hoc – this is the most flexible arrangement, when a tour operator agrees a contract
(discounted) rate with an hotelier and makes bookings as and when required. NegotiEast
StarTour and Travel ons on contract terms usually start a year before the holidays sold.

4.6.1 Booking of Services

o Confirm both the amount and method of payment. Always confirm and reconfirm what
was customer want.
o It is all too easy, on either side, to hear , to avoid this and other spelling errors, it
as. To avoid this and other spelling errors, it. To avoid this and other spelling errors, it is
advisable to learn the internEast StarTour and Travel onal phonetic alphabets.
o Confirm East StarTour and Travel on of Tour Components
o Airport transfer - guide and car transport services
o Restaurants - menu offered, quantity of food and position of good seat
o Hotel arrangement - check-in and check-out time so that rooms can be ready for tourists
upon arrival,
o Rooming list such as single, double and twin. Air reserv East StarTour and Travel on -
departure not changed, Make double reconfirmEast StarTour and Travel on: the first is
based on the airline rule, and the second is on the previous day of departure date.
o QuotEast StarTour and Travel ons‘ amendment
o Quot East StarTour and Travel on is about setting price for the tour product.
o So, quotEast StarTour and Travel on amendment is necessary.
o The price of the tour product based on your negotiEast StarTour and Travel ons with the
different suppliers such as accommod East StarTour and Travel on establishments, car
rental agencies and other suppliers. Itinerary adjustment
o Based on the negotiEast StarTour and Travel ons and adjustments in price,
o Make also adjustments in your itinerary..
6.5 Processing reservEast StarTour and Travel on & guest files
Recently, it is general to use the travel business management software when we control
reservEast StarTour and Travel ons. However, the software is based on a classic reserve, East
StarTour and Travel on control method. Therefore, we will study a classic reservEast StarTour
and Travel on control method here.

 Name and Title of a client,Enter it with the turn of Family name, First name, Title without
fail. （ e.g. Shimamura / Masahiro Mr. ） In case that the spelling even 1 character is
wrong, airlines sometimes refuses the boarding of the passenger. Especially, the spelling
mistake is fatal on the occasion of overbooking.
 Age of a client,Airlines requires passenger’s age for reservEast StarTour and Travel on
of the domestic airline’s ticket in some countries.
 Passport data of a client;Passport Number,Date of issue and Date of expire.There are
many cases that a client has the expired passport.Name and birthday of the client are
recorded in a passport exactly, so it is desirable to obtain the copy of a passport if it is
possible.
 Address of a representEast StarTour and Travel ve client in an origin country. Home
address & telephone number ,Office address & telephone number . Mobile phone number
and E-mail Address.
 Local Contact of a client in a host country.The local contact in the host country of a client
must be recorded to have connection with a client in an emergency and report it to airlines.
 Tour Code;The tour cord usually controls the reserve East StarTour and Travel on record
and it is given to each record.
 The number of pax and details inside a client’s group
4.6.2. Service program

Reasonable time is required to promote the importance of private school bus transportEast
StarTour and Travel on Service Company and thus attract parents and schools. Therefore, the
proposed service is assumed to start operEast StarTour and Travel on at 80 % capacity in the
first year, 90 % in the second year and 100% in the third year.
4.6.3. Accessibility
In Bahirdar city administrEast StarTour and Travel on except individual taxies and families do
not have organized private enterprise to providing the student school bus transportEast StarTour
and Travel on service Plc. But, there are 88,141 potential Tourist needs the school bus transport
service in Bahirdar city administrEast StarTour and Travel on. Out of these numbers of demand,

less than 3500 students have an access the transport service will be getting from individual taxies
and families.
4.6.4 Transport Fee

Currently, in Bahirdar city administr East StarTour and Travel on the difrent Tourit Center
based on services Package in the following Condition updating conditionaliy ;
 Per day $68- $113.91 (3,831 Birr-6,390 birr) ( Meal,transport,hotel services )

 One Person one Week $476 (ETB26,819) this includes accommodation, food, local
transportation, and sightseeing.
 Two Person one Week $952 (53,639 birr), this includes accommodation, food, local
transportation, and sightseeing.
 A two week trip to Addis Ababa on average costs around $952 (ETB53,639) for one
person and $1,905 (ETB107,278) for two people. This cost includes accommodation,
food, local transportation, and sightseeing.
 One MonthFor a couple $4,081(ETB229,881) this cost includes accommodation, food,
local transportation, and sightseeing.

5. ORGANIZEAST STARTOUR AND TRAVEL ONAL

STRUCTURE & HUMAN RESOURCE
5.1 OrganizEast StarTour and Travel on Structure
AdministrEast StarTour and Travel ve organizEast StarTour and Travel on

The administrEast StarTour and Travel on is done by the General
Manager/Director with the management team. They will also produce the
annual profit and loss account and balance sheet as well as file our tax return.
The day to day bookkeeping is done by computerized accounting system. All
work will be overseen by the Board of Directors.
InformEast StarTour and Travel on
The project will have systems in place to provide the appropriate informEast
StarTour and Travel on needed by staff and board to make sound financial
decisions and to fulfill IRS requirement.

Insurance
5.2 Human Resource and Salary

The proposed Project will require the following minimum staffs.
Table 04: Required Human Resource and Salary
Position Number of Salary/month/person Salary/annum

staffs
Manager 01 50,000 600,000
Secretary 01 6,000 72,000
Drivers 03 8,000 72,000
Total 12 22,500.00 606,000
5.3 Cost of furniture and equipment

The total cost of School Bus TransportEast StarTour and Travel on service facilities is
estimated at about 38,000 Birr.
Table 5: Required Furniture and Equipment
Furniture and Quantity Price/unit Total( Birr)

equipment
Desk Top 01 10,000 10,000.00

Computer
Printer (Laser) 01 5,000 5,000.00
UPS 01 3,000 3,000.00
Office furniture Lump 20,000 20,000.00
Total 38,000 38,000.00
6. FINANCIAL ANALYSIS
6.1. Underlying Assumption
The Financial analysis of School Bus TransportEast StarTour and Travel on Service Plc project
is based on the data provided in the preceding sections and the following assumptions.
A. Finance InformEast StarTour and Travel on
Source of Finance 30% equity and 70% Loan from

Development Bank
Bank Credit 10 Million
Purchasing Modality Duty free
Bank Interest Rate 7%
Payment Agreement 5 Years
Spare parts, Repair and Maintenance 1% of fixed investment
B. DepreciEast StarTour and Travel on
Equipment and Office Furniture 5%
Vehicles 1%

6.2 Investment
The Total investment cost of the project including working capital is estimated at Birr
14,444,000.00 million as shown in table 5 below. The owner shall contribute 30% of the finance
in the form of equity while the remaining 70% is to be financed by Development Bank loan.
Table 6: Total initial investment
Total Initial Investment
Item Cost
Vehicles (School Bus) 11,000,000.00
Equipment and Office equipment 38,000.00
Total Fixed Investment 11,038,000.00
Pre service capital expenditure 70,000.00
Total Initial Investment 11,138,000.00
Working capital at full capacity 3,306.000.00
Total 14,444,000.00
6.3 . Service Cost

The total service cost at full capacity operEast StarTour and Travel on is estimated at about
Birr------ as shown in table 6 below.
Table 6: Total Service Cost
Items Cost
Wages and Salaries 606,000.00
Fuels 56,000.00

Annual School Bus Rent for 3 Bus 1,800,000.00
Spares and Maintenance 110,300.00
Service costs 2,572.380.00
DeprecEast StarTour and Travel on 111,900.00
Financial Costs 2,684,200.00
6 FINANCIAL EVALUEAST STARTOUR AND TRAVEL ON

A. Profitability
Based on the projected profit and loss statement, the project will generate a profit throughout its
operEast StarTour and Travel on life. Annual net profit after tax ranges from Birr ------ to Birr
--------- during the life of the project. Moreover, at the end of the project life the accumulated net
cash flow amounts to Birr ------. For profit and loss statement and cash flow projection see
Appendix ---- and -----, respectively.
B. REast StarTour and Travel os
In financial analysis, financial rEast StarTour and Travel os and efficiency rEast StarTour and
Travel os are used as an index or yardstick for evaluEast StarTour and Travel ng the financial
position of a firm. It is also an indicator for the strength and weakness of the firm or a project.
Using the year-end balance sheet figures and other relevant data, the most important rEast
StarTour and Travel os such as return on sales which is computed by dividing net income by
revenue, return on assets (operEast StarTour and Travel ng income divided by assets), return on
equity (net profit divided by equity) and return on total investment (net profit plus interest
divided by total investment) has been carried out over the period of the project life and all the
results are found to be sEast StarTour and Travel sfactory.

C. Breakeven Analysis
The break-even analysis establishes a relEast StarTour and Travel onship between operEast
StarTour and Travel on costs and revenues. It indicates the level at which costs and revenue are
in equilibrium. To this end, the break-even point for capacity utilizEast StarTour and Travel on
and sales value estimated by using income statement projection are computed as followed.
Break- Even Sales Value = Fixed Cost + Financial Cost = Birr -------
Variable Margin rEast StarTour and Travel o (%)
Break -Even Capacity utilizEast StarTour and Travel on = Break- even Sales Value X 100 =
-------%
Sales revenue
D. Payback Period
The pay-back period, also called pay – off period is defined as the period required for recovering
the original investment outlay through the accumulated net cash flows earned by the project.
Accordingly, based on the projected cash flow it is estimated that the project’s initial investment
will be fully recovered within fifth year.
E. Internal Rate of Return
The internal rate of return (IRR) is the annualized effective compounded return rate that can be
earned on the invested capital, i.e., the yield on the investment. Put another way, the internal rate
of return for an investment is the discount rate that makes the net present value of the
investment's income stream total to zero. It is an indicator of the efficiency or quality of an
investment. A project is a good investment proposition if its IRR is greater than the rate of return
that could be earned by alternate investments or putting the money in a bank account.
Accordingly, the IRR of this project is computed to be -------% indicEast StarTour and Travel
ng the viability of the project.
F. Net Present Value

Net present value (NPV) is defined as the total present (discounted) value of a time series of cash
flows. NPV aggregates cash flows that occur during different periods of time during the life of a
project in to a common measuring unit i.e. present value. It is a standard method for using the
time value of money to appraise long-term projects. NPV is an indicator of how much value an
investment or project adds to the capital invested. In principle, a project is accepted if the NPV is
non-negEast StarTour and Travel ve. Accordingly, the net present value of the project at -----%
discount rate is found to be Birr -------- which is acceptable. For detail discounted cash flow sees
Appendix ------.
7 ECONOMIC AND SOCIAL BENEFITS

Based on the foregoing presentEast StarTour and Travel on and analysis, we can say that project
possesses wide range of benefits that complement the financial feasibility obtained earlier. It will
improve the standard of School transport service to be given to students. In general the envisaged
project promotes the socio economic goals and objectives stated in the strategic plan of the
Amhara NEast StarTour and Travel onal Regional State. These benefits are listed as follows.
I. Convenience:
Not everyone has the financial capacity to buy or own a private vehicle that can transport
them from their employment or anywhere they desire in a matter of minutes. As people
balance their monthly household budgets based on their income and expenses, the
convenience provided by good School Bus transportEast StarTour and Travel on will help to
alleviate the burden and worries of arriving on time without compromising or risking their
source of income. There is also the ease of being able to follow schedules for certain routes
without having to navigate traffic.
II. Accessibility:
A School Bus transportEast StarTour and Travel on service system should not only assess
risk that would state its safety, but also provide easy access to locEast StarTour and Travel
ons where people receive their everyday needs. This level of accessibility should also apply
to students who need transportEast StarTour and Travel on to and from school. A solid

transportEast StarTour and Travel on business plan should provide quick access to help
alleviate the load from Student’s daily life.
III. Efficiency:
In the long run, School Bus transportEast StarTour and Travel on’s efficiency and superior
impacts would truly shine. Because School Bus transportEast StarTour and Travel on
normally has a timetable and specified routes to go, the repetitive motion is where the
efficiency rests. Having dedicated stops and boarding sites will not only ease coagulEast
StarTour and Travel on on important roads and reduce traffic density, but it would also
encourage the general people to plan their route ahead of time with certainty.
IV. Community Benefits:
When everyone has convenient access to transportEast StarTour and Travel on, the impact
on the student is visible. Because everyone has the opportunity to arrive on time, to acquire
everything they need as they move through their task checklist without thinking about how
time consuming it will be. It would also reduce protests and angry mobs caused by traffic,
congestions and in worse case, a gridlock, which could be easily avoided with good School
Bus transportEast StarTour and Travel on.
V. Profit GenerEast StarTour and Travel on
The project is found to be financially viable and earns on average a profit of Birr _____
million per year and Birr ------ within the project life. Such result induces the project
promotes to reinvest the profit which, therefore, increases the investment magnitude in the
region.
VI. Tax Revenue

In the project life under considerEast StarTour and Travel on, the region will collect about
Birr---- from corporate tax payment alone (i.e. excluding income tax, sales tax and VAT).
Such result creates additional fund for the regional government that will be used in
expanding social and other basic services in the region.
VII. Employment and income GenerEast StarTour and Travel on
The Proposed project is expected to create employment for 12 persons. Consequently the
project creates income of Birr----- per year. This would be one of the commendable
accomplishments of the project.
VIII. Pro-Environment Project
The proposed service process is environment friendly.
IX. DiversificEast StarTour and Travel on and inter-Sectorial linkage
The proposed project helps to diversify ANRS’ and Ethiopian Economy. It contributes to
industrializEast StarTour and Travel on of the region as well as the country’s economy.

Appendix 7.A: financial analyses supporting tables

Appendix 7.A.1
NET WORKING CAPITAL ( in 000 Birr)
Year
Items Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 11
5,769.5 5,769.5
Total inventory 4,904.08 5,192.55 5,769.50 5,769.50 5,769.50 5,769.50 5,769.50 0 5,769.50 0
2,129.5 2,129.5
Accounts receivable 1,817.96 1,921.22 2,127.74 2,127.74 2,129.53 2,129.53 2,129.53 3 2,129.53 3
Cash-in-hand 19.44 20.58 22.87 22.87 23.17 23.17 23.17 23.17 23.17 23.17
7,922.1 7,922.1
CURRENT ASSETS 6,741.47 7,134.35 7,920.12 7,920.12 7,922.19 7,922.19 7,922.19 9 7,922.19 9
Accounts payable 72.42 76.68 85.20 85.20 85.20 85.20 85.20 85.20 85.20 85.20
CURRENT
LIABILITIES 72.42 76.68 85.20 85.20 85.20 85.20 85.20 85.20 85.20 85.20
TOTAL WORKING 7,836.9 7,836.9
CAPITAL 6,669.05 7,057.67 7,834.92 7,834.92 7,836.99 7,836.99 7,836.99 9 7,836.99 9

Appendix 7.A.2
PRODUCTION COST ( in 000 Birr)
Item Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11
Raw Material and Inputs 19,616 20,770 23,078 23,078 23,078 23,078 23,078 23,078 23,078 23,078
Utilities 49 52 58 58 58 58 58 58 58 58
Maintenance and repair 446 473 525 525 525 525 525 525 525 525
Labour direct 423 448 497 497 497 497 497 497 497 497
Labour overheads 106 112 124 124 124 124 124 124 124 124
425 450 500 500 500 500 500 500 500 500
AdministrEast StarTour and

Travel on Costs
Land lease cost 0 0 0 0 21 21 21 21 21 21

Cost of marketing
and distribution 750 750 750 750 750 750 750 750 750 750
Total OperEast StarTour
and Travel ng Costs 21,815 23,055 25,533 25,533 25,554 25,554 25,554 25,554 25,554 25,554
DepreciEast StarTour and
Travel on 2,704 2,704 2,704 2,704 2,704 354 354 354 354 354
Cost of Finance 0 2,070 1,811 1,553 1,294 1,035 776 518 259 0
Total Production Cost 24,520 27,829 30,049 29,790 29,552 26,943 26,685 26,426 26,167 25,908
Appendix 7.A.3
INCOME STATEMENT ( in 000 Birr)
Year Year Year Year Year Year Year Year

Item 2 3 4 5 6 7 8 9 Year 10 Year 11
36,55
Sales revenue 31,068 32,895 36,550 36,550 0 36,550 36,550 36,550 36,550 36,550

24,78
Less variable costs 21,065 22,305 24,783 24,783 3 24,783 24,783 24,783 24,783 24,783
11,76
VARIABLE MARGIN 10,002 10,590 11,767 11,767 7 11,767 11,767 11,767 11,767 11,767
in % of sales revenue 32.19 32.19 32.19 32.19 32.19 32.19 32.19 32.19 32.19 32.19
Less fixed costs 3,454 3,454 3,454 3,454 3,476 1,125 1,125 1,125 1,125 1,125
OPEREAST STARTOUR AND
TRAVEL ONAL MARGIN 6,548 7,136 8,313 8,313 8,291 10,642 10,642 10,642 10,642 10,642
Financial costs 2,070 1,811 1,553 1,294 1,035 776 518 259 0
GROSS PROFIT 6,548 5,066 6,501 6,760 6,998 9,607 9,865 10,124 10,383 10,642
Income (corporate) tax 0 0 0 2,028 2,099 2,882 2,960 3,037 3,115 3,193
NET PROFIT 6,548 5,066 6,501 4,732 4,898 6,725 6,906 7,087 7,268 7,449

Appendix 7.A.4
CASH FLOW FOR FINANCIAL MANAGEMENT ( in 000 Birr)
Item Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Scrap
TOTAL CASH INFLOW 20,218 39,691 32,899 36,559 36,550 36,550 36,550 36,550 36,550 36,550 36,550 14,646
Inflow funds 20,218 8,624 4 9 0 0 0 0 0 0 0 0
Inflow operEast StarTour
and Travel on 0 31,068 32,895 36,550 36,550 36,550 36,550 36,550 36,550 36,550 36,550 0
Other income 0 0 0 0 0 0 0 0 0 0 0 14,646
TOTAL CASH
OUTFLOW 20,218 30,439 28,106 30,718 31,702 31,537 32,059 31,878 31,697 31,516 28,747 0
Increase in fixed assets 20,218 0 0 0 0 0 0 0 0 0 0 0
Increase in current assets 0 6,741 393 786 0 2 0 0 0 0 0 0
OperEast StarTour and
Travel ng costs 0 21,065 22,305 24,783 24,783 24,804 24,804 24,804 24,804 24,804 24,804 0

Marketing and
Distribution cost 0 750 750 750 750 750 750 750 750 750 750 0
Income tax 0 0 0 0 2,028 2,099 2,882 2,960 3,037 3,115 3,193 0
Financial costs 0 1,882 2,070 1,811 1,553 1,294 1,035 776 518 259 0 0
Loan repayment 0 0 2,588 2,588 2,588 2,588 2,588 2,588 2,588 2,588 0 0
SURPLUS (DEFICIT) 0 9,252 4,794 5,840 4,848 5,013 4,491 4,672 4,853 5,034 7,803 14,646
CUMULEAST
STARTOUR AND
TRAVEL VE CASH
BALANCE 0 9,252 14,046 19,886 24,735 29,747 34,238 38,910 43,763 48,797 56,600 71,246
Appendix 7.A.5
DISCOUNTED CASH FLOW ( in 000 Birr)
Year Year Year Year Year Scra

Item Year 1 2 Year 3 4 Year 5 6 Year 7 8 Year 9 10 Year 11 p
14,64
TOTAL CASH INFLOW 0 31,068 32,895 36,550 36,550 36,550 36,550 36,550 36,550 36,550 36,550 6
Inflow operEast StarTour and Travel 0 31,068 32,895 36,550 36,550 36,550 36,550 36,550 36,550 36,550 36,550 0

on
14,64
Other income 0 0 0 0 0 0 0 0 0 0 0 6
TOTAL CASH OUTFLOW 26,887 22,204 23,832 25,533 27,563 27,654 28,436 28,514 28,592 28,669 28,747 0
Increase in fixed assets 20,218 0 0 0 0 0 0 0 0 0 0 0
Increase in net working capital 6,669 389 777 0 2 0 0 0 0 0 0 0
OperEast StarTour and Travel ng costs 0 21,065 22,305 24,783 24,783 24,804 24,804 24,804 24,804 24,804 24,804 0
Marketing and Distribution cost 0 750 750 750 750 750 750 750 750 750 750 0
Income (corporate) tax 0 0 0 2,028 2,099 2,882 2,960 3,037 3,115 3,193 0
14,64
NET CASH FLOW -26,887 8,863 9,063 11,017 8,987 8,896 8,114 8,036 7,958 7,881 7,803 6
CUMULEAST STARTOUR AND - 74,37
TRAVEL VE NET CASH FLOW -26,887 18,023 -8,960 2,057 11,044 19,940 28,054 36,090 44,049 51,929 59,733 8
Net present value -26,887 8,058 7,490 8,277 6,138 5,524 4,580 4,124 3,713 3,342 3,008 5,646
CumulEast StarTour and Travel ve net - 33,01
present value -26,887 18,829 -11,339 -3,062 3,077 8,601 13,181 17,304 21,017 24,359 27,368 4
NET PRESENT VALUE 33,014

INTERNAL RATE OF RETURN 32.51%
NORMAL PAYBACK 4 years

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EAST STARS TOUR & TRAVEL SERVICE ENTERPRISE

TOUR AND TRAVEL FEASIBILITY STUDY

Company Name : East Stars general Trading PLC

Bahir Da, Ethiopia

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1.2 Company Overview and Ownership..................................................................................................1

1.3 Credit History and Status of the Promoter.........................................................................................2

1.4 Purpose and Amount of Loan Requested...........................................................................................2

1.5 Project LocEast StarTour and Travel on...........................................................................................3

1.6 Project rEast StarTour and Travel onale............................................................................................3

1.7 Overall Project Objectives.................................................................................................................4

2.SERVICE DESCRIPTION AND APPLICEAST STARTOUR AND TRAVEL ON.................................5

2.1 Project Description............................................................................................................................5

2.2 Types of Tour Operator......................................................................................................................6

2.3 Package holiday.................................................................................................................................7

2.3.1 ClassificEast StarTour and Travel ons of Tour Packages...........................................................7

2.3.2 ClassificEast StarTour and Travel on of Package Tours............................................................8

2.3.3 Components of Package..............................................................................................................9

2.4 Tour OperEast StarTour and Travel on Products.............................................................................11

2.5 Tailor-Made/Custom Tour................................................................................................................12

2.5.1 Handling Tailor Made Tours.....................................................................................................13

2.5.2 City Transport Services............................................................................................................15

3.MARKET STUDY, VEHICLES CAPACITY AND SERVICE DELIVERY..........................................16

3.1. Market Study..................................................................................................................................16

3.1.1. Present Demand and Supply....................................................................................................16

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3.1.2 Market Size...............................................................................................................................16

3.2 Supply and the capacity of the Bus..................................................................................................18

3.3 Service strategy...............................................................................................................................18

3.3.1 Sales Strategies.........................................................................................................................19

3.3.2 Distribution of Tourist Products...............................................................................................19

4.1 Functions of Travel Agencies and Tour Operators...........................................................................20

4.2 Typical Flow of Tourism Arrangements in Ethiopia........................................................................21

4.3 Types of Travel Agencies and Tour Operators................................................................................23

4.4 Functions of Travel Agencies..........................................................................................................26

4.5 Booking Services.............................................................................................................................26

4.6Tactics of negotiEast StarTour and Travel on....................................................................................27

4.6.1 Booking of Services..................................................................................................................29

4.6.2. Service program.......................................................................................................................31

4.6.4 Transport Fee............................................................................................................................32

5. ORGANIZEAST STARTOUR AND TRAVEL ONAL STRUCTURE & HUMAN RESOURCE......33

5.1 OrganizEast StarTour and Travel on Structure.................................................................................33

5.2 Human Resource and Salary............................................................................................................34

5.3 Cost of furniture and equipment.....................................................................................................34

6.1. Underlying Assumption..................................................................................................................35

6.3 . Service Cost....................................................................................................................................36

6 FINANCIAL EVALUEAST STARTOUR AND TRAVEL ON...............................................................37

7ECONOMIC AND SOCIAL BENEFITS..................................................................................................38

Appendix 7.A: financial analyses supporting tables...................................................................................42

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CTTC Catering and Tourism Training Center

EIC Ethiopian Investment Commission

ETB Ethiopian Birr (official currency)

ETO Ethiopian Tourism OrganisEast StarTour and Travel on

EWCA Ethiopian Wildlife Authority

GTP Growth and TransformEast StarTour and Travel on Plan.

IFC InternEast StarTour and Travel onal Finance CorporEast StarTour

IGAD Intergovernmental Authority for Development (East Africa)

MoCT Ministry of Culture and Tourism

MoFA Ministry of Foreign Affairs

MSMEs Micro, small and medium enterprises

PROHEDEV Heritage for Development Project (EU funding)

PUM Netherlands Senior Experts

SDPASE Sustainable Development of the Protected Areas System of Ethiopia