ADMAS UNIVERSITY

SCHOOL OF POST GRADUATE STUDIES

PROJECT PROPOSAL ON G+10 SEVEN STAR
INTERNATIONAL KK. SANSA HOTEL IN ADDIS ABABA
PROPOSED by: - ID No.
1. Abiy Zemedkun……………………………………………PGMB/7502/21
2. Ashenafi Asfaw…………………………………….……...PGMB/7453/21
3. Kaleb Demissie…………………………………………. PGMB/7308/21
4. Kidist Shiferaw……………………………………………PGMB/7598/21
5. Neima Seid………………………………………………..PGMB/7061/21
6. Sara Demissie…………………………………….…….... PGMB/7193/21
7. Sindu Kebedde………………………………………….....PGMB/7442//21

Submitted to: Tesfaye Asefa (Ph. D)

Submission Date: Dec.18/2022
Addis Ababa, Ethiopia.

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Executive Summery
This is a project proposal for the establishment of G+ 10 seven-star international hotel having
the name “KK. SANSA” at Mexico in Addis Ababa. The name KK. SANSA derives from the
partner’s name by taking and conjoining first latter meaning charm(beauty). Addis Ababa is a
fast growing regional economic center and the capital of Ethiopia. It is home to the African
Union, the UN Economic Commission for Africa, foreign missions, regional NGO’s and the UN
Conference Centre. Due to its regional political status Addis Ababa is often referred as the
political capital of Africa. Ethiopian Airlines has become a major demand driver, servicing 101
destinations from Bole International Airport. Economic growth is further increasing demand at
+10% per annum this is therefore KK. SANSA hotel investment founded its base on it. The
present demand for the proposed service delivery is estimated from different perspective and it
expected to decline after ten years of its operation but through diversifying the customer service
approach we intend to handle the existing customers along with attracting new customers. The
total area of the 7 star international KK. SANAS hotel investment is about 1200-meter square.
The area covered and develop the following infrastructures such as main building (g+10) hotel
service and, store, gourd house, parking area and other necessaries facilities The total
investment capital of the project is estimated at birr 223,673,888 of which birr
157,627,983(70.4%) is for fixed investment cost of which 65 % of the fixed cost is need foreign
currency while the remaining balance of birr 66,045,905 (29.6%) will be working capital.

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Table of Contents
Executive Summery......................................................................................................................................i
1. INTRODUCTION...............................................................................................................................2
1.1. Investment in Ethiopia.................................................................................................................2
1.2. Hotel and Tourism sector in Ethiopia..........................................................................................3
1.3. Promoter Background..................................................................................................................3
1.4. Ambition of creating the hotel project.........................................................................................4
1.5. Purpose and Amount of Loan......................................................................................................4
2. The project...........................................................................................................................................5
2.1. The project description and justification......................................................................................5
2.2. Project Objective.........................................................................................................................6
2.3. Project location and justification..................................................................................................7
2.3.1. Location...............................................................................................................................7
2.3.2. Climate................................................................................................................................7
3. Feasibility Study..................................................................................................................................9
3.1. Marketing and Demand...............................................................................................................9
3.1.1. General Overview................................................................................................................9
3.1.2. Present supply in Addis Ababa............................................................................................9
3.2. Demand for hotel services.........................................................................................................10
3.3. Capacity and service programm.................................................................................................11
3.3.1. Capacity.............................................................................................................................11
3.1.2. Service Programm..............................................................................................................12
3.4. Marketing strategy.....................................................................................................................12
3.5. Competitors Overview...............................................................................................................13
4. Technical Study.................................................................................................................................13
4.1. Design and particulars...............................................................................................................13
4.2. Physical appearance...................................................................................................................14
4.3. facilities.....................................................................................................................................14
4.4. Inputs/ raw materials and utilities..............................................................................................17
4.4.1. Raw Material cost..............................................................................................................17
4.4.2. Utilities..............................................................................................................................17
4.5. Machinery and equipment..........................................................................................................18

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 4.6. Land, Building and civil work...................................................................................................28
4.6.1. Land lease..........................................................................................................................28
4.7. Environmental impact assessment.............................................................................................28
4.8. Implementation Schedule...........................................................................................................29
4.9. Manpower Requirement............................................................................................................30
5. FINANCIAL STUDY.......................................................................................................................31
5.1. Classified Investment cost.........................................................................................................31
5.1.1. Operational cost costs........................................................................................................31
5.2. MONITORING AND EVALUATION.....................................................................................33
5.3. CONCLUSION.........................................................................................................................33
5.4. Recommendation.......................................................................................................................33

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Profitability: The financial analysis of the envisaged project is carried out for the following ten
years. Based on the 10 years’ financial projections using the income statement, cash flow
statement and financial internal rate of return (FIRR), the following results are obtained.

Income statement: According to the projected income statement, the project will generate
profit beginning from the first year of operation. Based on the 10 years’ financial projections the
projects average annual net profit after payment of bank interest, depreciation and tax amounts to
birr 13,593,732.

Cash flow statement: The cash flow statement also shows a substantial amount of cash surplus
right from the first year of project operation life. The cash balance grows from birr 21,685,936 in
the first year to cumulative balance of birr, 384,396,352 during the 10th year of operation
indicating the capacity of the project to finance itself and generate cash surplus for further
investments.

FIRR Computation: The computation of the project FIRR shows that the project will
profitably generate reasonable return on investment. Before tax financial internal rate of return is
calculated to be 33.9%. This indicates the project is financially viable with an internal rate of
return (IRR) of 33.9 % and net present value (NPV) 102.2 million at discount rate 35 %.

Socio economic benefits: The socio economic benefit of the project is also very high. The
project will provide 150 permanent employs, generate revenue to government in the form of
taxes, Facilitate and give a good service for local and international tourists.
Beneficiaries of KK. SANAS seven-star international hotel

 International tourist
 Local tourist
 Ethiopian Government
 Intellectuals
 artists, and writers with reserved VIP seats

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Conclusion and recommendation: The Project is found to be operationally profitable, viable &
has significant socio-economic benefits. We recommended that according to this attractive
financial and economic benefit of the project all concerned offices & financial institutions should
give their support to facilitate the implementation of this plan.

1. INTRODUCTION
1.1. Investment in Ethiopia
Ethiopia is now becoming more and more investment friendly country. The Government is
creating favorable condition that would highly encourage the private Sector to be engaged in
almost all areas of the economy. The country with population of come 80 million offers
significant domestic market for locally for Locally produced goods and service the country is
also a member of the common Market for eastern and southern Africa Comesa offering huge
benefit of Exporting commodities in preferential tariff rates to a wider regional market. Privet
investment should be encouraged to increase form year to year and Investment constraints have
to be alleviated in order to pave development ways so That investment sector happens to be
determinant about factor of economic development of the country like Ethiopia.

it is usually considered as the engine of the economy. both private and government Bodies in
many ways have commonly agreed this idea. economic development in Any case needs both
efforts of the privet as well as the public sector. There are Investments that could not be
undertaken by privet sector due to its difficult nature I. e high initial capital and long gestation
period. However, the passed command economy system and the lack of experience Between
both sides have made it so hard for a private sector to flourish. But now a day as Ethiopia follows
free market economy ‘the roll of private sector for the achievement of the economy policy.
Accordingly, the Ethiopia federal democratic government is encouraging investors to invest their
records to contribute to the development of the country in all sectors by avoiding all barriers and
facilitating all the mince for the investment.

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 1.2. Hotel and Tourism sector in Ethiopia
Ethiopia has vast potential for development of various economic sectors. Although agriculture is
the mainstay of the country’s economy the opportunity to invest in other sectors especially in
Hotel, Tourism and various recreation activities are there. Although Ethiopia is endowed with
many natural and manmade tourist attractions, these resources have not been sufficiently
exploited. The country’s geographical location and the remarkable physical features and climate
have endorsed it with rich and varied natural heritages. Despite considerable demand, tourism
sector remains at relatively low stage of development.

The Hotel and recreation service facilities in Ethiopia have been found at a lower level of
development. The number of Hotel service establishments in the country has remained
insignificant to respond to the customer’s demand. Only few Hotels have the capacity or quality
to provide good accommodation and catering facilities to fulfill tourists need. There are only few
hotels in the capital, Addis Ababa, and other big towns of the region states that organized on The
government of Ethiopia has devised a long term strategy that gives due regard to the
preservation, development and promotion of the country’s tourist attraction. This includes plan
for expansion of tourist facilities and the necessary infrastructure. international standard to fulfill
the consumer’s needs.

By taking this encouraging as an opportunity the promoter project plan to establish 7 star
international KK. SANAS Hotel service in Addis Ababa Mexico Sub city for the benefit of the
promoter, the district community as well as the country as a whole.

1.3. Promoter Background

The promoter, we have a work experience in hotel and management business activities. During
this time, the promoter gained a vast knowledge and skill. With this reliable experience, we
know how to manage and lead any organization to profit and also know how to handle different
challenges in the working environment. Moreover, we have a very good reputation with banks
and different financial organizations.

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 1.4. Ambition of creating the hotel project
According to the preliminary market research, the demand for hotel service is very high and yet
the supply is limited leaving a huge service gap to the customer. Unfortunately, there is no
saturated standard hotel (5 stars) in the area. Although few less thanseven star hotels have
already working in the area, but still huge gap is there in between demand and supply in the
town. The service (7 star hotels) is widely accepted in Addis Ababa, Government employees,
Private employees, Tourists, local customers, and to some extent even in rich house-holds. So
there is good scope for establishing the units for establishing and maintain 7-star standard
/international and tourist hotel service in Addis Ababa as well as in the country. Due to this, it
has become imperative to build and maintain 7-star standard hotels service for the mankind in
prevailing conditions.

1.5. Purpose and Amount of Loan

Purpose and amount of loan requested: The purpose of the loan is to import machineries and
purchasing steel for building construction. Beside this the promoter believes that, the loan will
strengthen the relationship between the investor and the bank. Furthermore, the investor gets
strength to advance to various viable economy sectors in the country.

The source of the project finance is from the promoter’s equity and bank loan. Out of the total
investment capital of birr 223,673,888 birr 66,045,905 (29.4%) is to be contributed by the
promoter(We) while the remaining balance of 157,627,983 (70.4%) is to be covered by the local
bank.

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 2. The project
2.1. The project description and justification
For The project proposal is a new international hotel partnership with an expected to open in
May, 2025 G.C at the heart of Addis Ababa, and expected to give a standardize hotel service in
Addis Ababa. KK. SANAS will specialize best international foods, Dinners, Coffee, homemade
food, and other related activities. In Addis Ababa there are many international hotels that give
services to their customers but they cannot still satisfy the need and want of the customer in
terms of both quality and quantity. In order to maximize customer satisfaction so that KK.
SANAS decide to open seven stars’ international hotel in Addis Ababa city.

International standard tourist hotel is high class hotel (from five to seven-star level) where
services like bedroom, catering, meeting rooms, multipurpose assembly hall, swimming pool,
Spa (Hot Spring), gymnasium, sauna and massage, other sports facilities like tennis or squash
court, min-golf or badminton, bowling, table tennis and children playground, night club with
dancing to live music or discotheque or cabaret etc. A hotel is an establishment that provides
paid lodging on a short-term basis. Facilities provided may range from a modest-quality mattress
in a small room to large suites with bigger, higher-quality beds, a dresser, a refrigerator and other
kitchen facilities, upholstered chairs, a flat screen television and en-suite bathrooms. Small,
lower-priced hotels may offer only the most basic guest services and facilities. Larger, higher-
priced hotels may provide additional guest facilities such as a swimming pool, business center
(with computers, printers and other office equipment), childcare, conference and event facilities,
tennis or basketball courts, gymnasium, restaurants, day spa and social function services. Hotel
rooms are usually numbered (or named in some smaller hotels and B&Bs) to allow guests to
identify their room. Some boutique, high-end hotels have custom decorated rooms. Some hotels
offer meals as part of a room and board arrangement. In the United Kingdom, a hotel is required
by law to serve food and drinks to all guests within certain stated hours. In Japan, capsule hotels
provide a tiny room suitable only for sleeping and shared bathroom facilities.

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 2.2. Project Objective
The main objective of the project is aimed at to maximize the return on invested capital in the
form of profit for the promoter. However, its implementation will benefit the employee, the
consumer society and the government at different levels. In this respect the project is aimed to
promote the following objectives: -

 To maximize the return on invested capital through modern Hotel services • To raise the
significance and importance of the sector and thereby raising its contribution to the
national economic development
 To give quality and standard hotel service
 Effectively use local inputs and strengthening the linkage between agriculture and other
sectors of the economy
 To provide gainful employment to a large segment of the population of the project area
and augment earning capacity at the grassroots level,
 Increase government revenue through the different forms of taxes, which in turn used to
facilitate social and economic development. In general, the project is believed to have
significant social and economic benefits that accrue to the society, the region and the
country beyond the financial returns to its owner.

Mission and goal

Mission

Mission of the particular project is to expand the standard star hotel system and to give quality
service.

 To prove to other people that struggle for a better life and economic independences can
do business and bring change and can make a difference if opportunities are given.
 To become financially liquid and guaranteed more than ever.

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 Goal

Objectives are the goals toward which activities of the business are directed and one of the
most important functions the business owner must perform is setting objectives. This
important aims of this sole proprietorship business among others include the following
highly interrelated general goals with each other.

 To create employment opportunities for 150 permanents and 250 causal

 To achieve standard tourist hotel and give quality service.

2.3. Project location and justification

2.3.1. Location
The proposed project of seven-star International hotel will have planned to be located in Addis
Ababa Mexico. Addis Ababa is the capital and largest city of Ethiopia. It is the seat of the
Ethiopian federal government. According to the 2007 population census, the city has a total
population of 2,739,551 inhabitants. The total land size the promoter requesting for the
implementation of the project is estimated at 1200 square meters, which will have been obtained
from investment commission of Addis Ababa city administration Hence the owners select Addis
Ababa for proposed project by looking every aspects of business integrity tourist area. As a
chartered city (ras gez astedader), Addis Ababa has the status of both a city and a state. It is
where the African Union is and its predecessor the OAU was based. It also hosts the
headquarters of the United Nations Economic Commission for Africa (ECA) and numerous other
continental and international organizations. Addis Ababa is therefore often referred to as "the
political capital of Africa" for its historical, diplomatic and political significance for the
continent.

2.3.2. Climate
Addis Ababa has a subtropical highland climate. The city has a complex mix of highland climate
zones, with temperature differences of up to 10 °C (18 °F), depending on elevation and
prevailing wind patterns. The high elevation moderate’s temperatures year-round, and the city's
position near the equator means that temperatures are very constant from month to month. As
such the climate would be maritime if its elevation was not taken into account, as no month is
above 22 °C (72 °F) in mean temperatures.

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Geography: Addis Ababa lies at an elevation of 2,200 metres (7,200 ft) and is a grassland
biome, located at 9°1′48″N 38°44′24″ECoordinates: 9°1′48″N 38°44′24″E.

Demographics: As of the latest 2007 population census conducted by the Ethiopian national
statistics authorities, Addis Ababa has a total population of 2,739,551 urban and rural
inhabitants. For the capital city 662,728 households were counted living in 628,984 housing
units, which results in an average of 5.3 persons to a household. Although all Ethiopian ethnic
groups are represented in Addis Ababa because it is the capital of the country, the largest groups
include all nation nationality.

Transport: Public transport is through public buses from Anbessa City Bus Service Enterprise,
Light Rail or blue and white taxis. The taxis are usually minibuses that can seat at most twelve
people. Two people are responsible for each taxi, the driver and a weyala who collects fares and
calls out the taxi's destination.

Road: The construction of the Addis Ababa Ring Road was initiated in 1998 to implement the
city master plan and enhance peripheral development. The Ring Road was divided into three
major phases that connect all the five main gates in and out of Addis Ababa with all other
regions (Jimma, Debre Zeit, Dessie, Gojjam and Ambo). For this project, China Road and Bridge
Corporation (CRBC) was the partner of Addis Ababa City Roads Authority (AACRA). The Ring
Road has greatly helped to decongest and alleviate city traffic.

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 3. Feasibility Study
3.1. Marketing and Demand
3.1.1. General Overview
The hotel industry consists of many different services, including accommodation, restaurants,
cafes and catering. The market for the hotel industry, especially classified hotels in a developing
country like Ethiopia, is closely linked to the tourism industry, because a majority of consumers
for the sector services come from international tourists. According to the United Nations
Statistical Commission, Tourism comprises the activities of persons traveling to and staying in
places outside their usual environment for not more than one consecutive year and staying at
least 24 hours in the country visited. The total number of international tourists arriving in
Ethiopia is steadily increasing. The highest number of tourist arrival is in 2005 i.e. 227.4
thousand. As can be seen from Table 3.3, during the period 1991-2005 except for the decline
observed in year 1998, the number of tourists visiting the country was consistently growing. The
growth rate registered varies from year to year; the lowest was in 1992 (2%) and the highest in
1997 (27.7%). However, on average during the period under consideration tourist arrivals have
been increasing by about 8 % per annum.

3.1.2. Present supply in Addis Ababa

According to Current 2017 Information Addis Ababa has a quality supply of 32 hotels and a total
of 3634 keys bed rooms currently in the market, giving an average number of 100 rooms per
hotel. Branded supply is very low, with only Starwood, Rezidor, Marriott and Louvre present.
Future supply is predominantly branded. Hotel supply and its growth Addis Ababa is poised to
undergo a high level of supply growth during the next five years with a total of 2,375 rooms
(76%) having been announced. We anticipate that 50% of this supply (1,188 rooms) to be
completed, with cash flow constraints, low access to debt funding and a shortage of foreign
currency holding back further supply growth. Promotors with stronger balance sheets, technical
support and access to foreign currency have a higher likelihood of completing their
developments. The result of this is a more measured and appropriate supply pipeline of new
hotels. New supply is increasingly branded with this growing.

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 3.2. Demand for hotel services
The feasibility study conducted for this project deals with the demand and supply analysis for
the hotel project to be established in the area by taking the number of international and national
tourist, investors, employers and government directly related with the level of development of
the economy in general and the tourism sector in particular. It is a function of the number of both
domestic and foreign tourist travelers in the area, travelers for the commercial or business
purposes, travelers for conference and other assembly purposes, residents in the area (in fact it
depends up on the standard of the hotel and the living status of the residents) etc. Tourist could
come to the country for the purpose of visiting our country areas and rest on Addis Ababa mainly
Addis Ababa is: -

 fast growing regional economic center and the capital of Ethiopia

 African Union
 UN Economic Commission for Africa
 foreign missions
 regional NGO’s and the UN Conference Centre

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  Due to its regional political status Addis is often referred as the political
capital of Africa
 Ethiopian Airlines has become a major demand driver, servicing 101
destinations from Bole International Airport.
 Economic growth is further increasing demand at +8% per annum

3.3. Capacity and service programm

3.3.1. Capacity
From the market study, it is observed that there is a great demand gap between the demand and
supply of international tourist standard hotel service. Therefore, taking in to account the market
study and economic scale of service provision the envisaged international tourist standard hotel
will have capacities as shown below:

Table 1. service capacity of the envisaged internationaltourist standard hotel

Sr. No. Type of Service Feasible Service Capacity

1 Bedroom 150 rooms, 40will be double rooms,
100 single rooms and20 suits.

2 Bar and Restaurant

• Restaurant (Modern and 1000 at a time each

traditional

• Coffee Shop 20- 25 seats at a time

3 Sauna and steam bath 50 heads/day

4 Gymnasium 60 heads/day
5 Swimming pool (Big and small 60 Heads/day and 40
pools) head/day

6 Meeting room 1500x3 seats

7 Night club 500at a time

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 3.1.2. Service Programm
At the initial stage of the service provision period, the hotel would require some years to
penetrate into the market and capture a significant market share. Therefore, in the first and
second year of service the capacity utilization rate will be 75% and 90%, respectively. Full
service provision shall be attained in the third year and then after. The proposed service
provision program is shown in Table 2.

Sr. Service Service Year

No.

1 2 3- 10

1 Service provision rate (%) 75 90 100

3.4. Marketing strategy

As discussed earlier the major target groups of hotel sector are tourists who arrives the country
for business, leisure, conference and other purposes. Providing quality services and consistently
improving with the changing situations should be the promoters’ objective. Hence, according to
the feasibility study, the promoter has the following marketing strategies.

 Contacting government and private agencies affiliated with tourism on a regular basis,
informing them of any corporate rate, discount programs, availability of services, etc

Emphasizing the access of the proposed hotel to support client’s attractions, as well as the
services and amenities available,

 Special effort will be made to emphasize the price-value relationship of

the service available,

 Actively marketing the hotel prior to the completion and opening,

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  An aggressive local marketing effort and promotion of the hotel market to enable the
hotel to capture a more than proportionate share of support within the market,
 Working with local people to establish a competitive amenity package responsive to
specific requirements.
3.5. Competitors Overview

Three are 36 standard 3 to 5 hotels in Addis Ababa but still three is a huge gab but our hotel
service is doing quality and clean services. In addition to the above, the failure stories that I have
observed from others and the comments collected from my customers will help me to win my
competitors. In conclusion, my service compared to the competitors looks like:

 I keep the promise I make

 Quality service is my motto

 Transparent price setting and fair price will be bases to win the competitors

 The promoter long term experience and goodwill that he has achieved from his respected
customers will allow me to win the competitor.

In addition to the above, the failure stories that we have observed from others and the comments
collected from our customers will help us to win our competitors.

In conclusion, his service compared to the competitors looks like:

4. Technical Study
4.1. Design and particulars
The project owner interest, as regards to how the overall building design looks like and the level
of service to be rendered by the envisaged project, is dependent on the area at which the
buildings to be placed. The owner has already decided to commit himself to construct a seven-
star hotel having the full knowledge what is required by the national and international standard
of Hotels in Ethiopia. The standard by the way its exhaustiveness as well as being explicitly
specific on the level of the service expected under the selected category, determines also the
physical and financial requirement of the project. Hence, in effect the contents of project
components to be described below are the derivatives of the requirements mentioned above.

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 4.2. Physical appearance
The hotel would have G+10 building placed on an area of 1200m 2. The architecture of the
buildings is influenced by the modern design setting holding the characters of attracting
customers from out ward and allowing the maximum comfort it can provide from service point
of view. Apart from the need to add a new look within the locality, exterior of the building will
be dominated by a glass panel at the strategic corners to provide a maximum opportunity for
guest to have, a look at the important land escape/scenery of the area.

The outer space is allocated to have an open garden, children’s playing ground, parking area,
fountains and inter campus paving with a medium size swimming pool adjoining the front side of
the buildings.

4.3. facilities
The envisaged hotel should have sufficient and comfortable space to accommodate the core
services as per the requirements of the seven-star hotel. Actually this has been considered
seriously at the design stage of the building along with the allocation of appropriate area and
placement of each component with the building accordingly. On the other hand, it is also
important to figure out the layout of each component not only from the perspective of having
compliance for the standard but for the benefit exploring possibilities of bringing complementary
services under the same location and allow maximum convenience in the work processes. The
size (area) of each service, which will be explained below, determine the holding capacity of
guests as it determines the level and quality of service. Other than the critical factors mentioned
above the market aspect i.e. customers need and resource availability are considered in which
case they are the determinants to give the final set up of the facilities.

(a) Bed rooms

A total of 150 classes are allotted for room services with options to avail two different types of
accommodations. In the interest of following the trend in the industry single and double
bedrooms. Actually the standard requires allowing maximum 40% from the total while the rest
can remain with big double bed rooms or any other smaller rooms. On the bases of the above
considerations under this component, the hotel will have 100 single ,400 double and 20 suit king
bed rooms.

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 (b) Bars Standard

Seven- star hotels must have at least one bars with a superior comfort and service quality. The
furniture and equipment’s, as being the basic sources of customer’s attractions, need to be
fashionable of higher quality commensurate with the expectation of guests who happen to prefer
this class. Therefore, the envisaged hotel, having the requirements considered too, will have one
main bar at the ground floor adjoining the reception area. Another bar preferably with smaller
space but furnished with cozy furniture will be placed at top floor of the building. This is just to
add another attractive look for the hotel as it will be placed at a strategic location for customer to
have a panoramic view of the area. The minimum carrying capacity of the bars is estimated
500persons per day.

(c) Main restaurant

Technically a hotel to be classified under Five stars of as such this one must have at least two
dining places having the size proportional to the guests who have checked in as normally
customers do not prefer to worry about going out once they have settled. The area determination
has to take into account this. Hence, the hotel must provide the maximum range of varieties at all
times. The hotel will have the capacity entertaining 600 guests and allow maximum efficiency in
the service by having the restaurant located nearer to the main kitchen.

(d) Banquet/Conference hall

A hotel with Five stars needs to have a conference/banquet hall of larger area which can be used
for banquet or conference interchangeably. This project considers this component as the second
important function next to the room services as this area has a higher potential for such services.
The holding capacity of the main conference hall will be 1500 persons.

(e) Supports Kitchen

Two kitchens, with the processes of multiple varieties of food preparation and a proportional
capacity to handle the maximum guests to be served in the main restaurant as well as in banquet
hall, is the critical requirement for the proposed hotel. It should be large enough also to

15
accommodate the working areas of cold and hot meals on the one hand and pastries and bakery
on the other.

In order to allow reasonable space for workers to move around as well as to avoid the possibility
of contamination and spoilage, the pastries and bakery will be placed at the nearest door joining
the main buffet at the gate of the restaurant. On the other hand, the kitchen should be provided
with a space to add a small store with a flexible structure to contain butchery and cold rooms.
These are critical for easy facilitation of cooking’s. Moreover, the kitchen will have a well-
connected washing corner with at most margin of clearance to make the area safe and clean.

Power House

For the service of the hotel to continue uninterrupted, a power house is already planned to be
placed in the underground or back to the building. Hence, the power house will be supplied with
a general planned to be fixed for emergency service.

Store

Alike the capacity projection made on the kitchen, the envisaged project requires a store as big
as the varieties of items that are needed to be kept as stock. The store will need to have a
systematic management for stocks properly placed and identified at the time of delivery and
inventory. Hence, it is the required procedure to organize the stock items in separate sections so
that the proper handling of stocks shall be maintained. In view of this, the hotel requires a
number of stores with sections for food items, beverage, glass wares, silver wares, soft
furnishings, cleaning and sanitary materials, stationery materials all placed according to their
physical appearances. The store will be placed in locations nearer to kitchen or leisure service.

Car Parking

The hotel must provide the service of car parking with 24 hours’ protection at least for those
customers who have checked in. Again, it should be large enough to accommodate as many
vehicles as the hotel is going to entertain a large crowd. In view of this, a parking space for about
120 vehicles is planned to be allocated with the standard width and height of the drive in routes.

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 4.4. Inputs/ raw materials and utilities
4.4.1. Raw Material cost
The annual cost and list of raw materials are indicated in Table 3 Table 3. Annual requirements
of raw and auxiliary materials

S/N Raw materials Quantity per cost per per year

month month
Food materials raw costs lamp sum 500,000.00 6,000,000.00

d/t type Beverage raw costs lamp sum 500,000.00 6,000,000.00

massage, sauna bath and other lamp sum 15,000.00 180,000.00

related cost
Cleaning materials and other lamp sum 15,000.00 180,000.00
miscellaneous uses
Total 12,360,000.00

4.4.2. Utilities
Annual requirement of electricity, water and fuel is estimated at 5,367,000 birr from which,
800,000 kwh, 500,000 m3 and 4000 liters, are electricity, water and fuel respectively. The total
costs of utilities are, therefore, about Birr 5,367,000 per annum.
Table 4 utilities
Description Qty. Cost per
unit cost year
Electricity, kWh 500000 1.25 625000
Water, m3 300000 4.5 1350000
LPG, lt 2000 16 32000
Diesel, lt 20000 18 360000
Total 2367000

17
 4.5. Machinery and equipment
Machinery and equipment required for jute bags manufacturing plant are given in Table
Table 5 list of machinery and equipment Furniture and equipment's required for Suit bed rooms

S/ Description Quantity Unit Total

n price (birr)

1 Sofa single 20 2,500 50,000

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

18
Furniture and equipment's required for double bedrooms

S/ Description Quantity Unit Total

n price (birr)

1 Sofa single 40 2,500 100,000

3 TV 21” 20 8,000 160,000
4 Telephone stand 20 500 10,000
5 Telephone apparatus 20 750 15,000
6 Refrigerators 20 4,000 80,000
7 Standing lump 20 1,000 20,000
8 Coffee table 20 1,500 30,000
9 French Bed (120 x 180cm) 40 12,000 480,000
10 Cupboard built in 20 5,000 100,000
11 Head lump 20 1,000 20,000
12 Writing table with chair 20 2,500 50,000
13 Chest drawer 20 1,500 30,000
14 Spring mattress 40 5,000 200,000
Bed made wood 80 20,000 1,600,000
15 Bed sheets 80 500 40,000
16 Bed cover 80 800 64,000
18 Pillow 80 250 20,000
Total 3,019,000

19
Furniture and equipment's required for single bedrooms

S/n Description Quantity Unit price Total (birr)

1 Sofa single 100 2,500 250,000

2 TV stand 50 2,000 100,000
3 TV 21” 50 5,000 250,000
4 Telephone stand 50 500 25,000
5 Telephone apparatus 50 750 37,500
6 Refrigerators 50 4,000 200,000
7 Standing lump 50 1,000 50,000
8 Coffee table 50 1,500 75,000
9 French Bed (150 x 180cm) 50 20,000 1,000,000
10 Cupboard built in 50 5,000 250,000
11 Head lump 50 1,000 50,000
12 Writing table with chair 50 2,500 125,000
13 Chest drawer 50 1,500 75,000
14 Spring mattress 50 3,000 150,000
15 Bed sheets 100 250 25,000
16 Bed cover 100 500 50,000
17 Blanket 100 1,000 100,000
18 Pillow 100 100 10,000
Total - - 2,822,500

Furniture and equipment's required for office, reception, leisure and others

20
S/n Description Quantity Unit price Total (birr)

1 Executive double redistill desk 2 20,000 40,000

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

Furniture and equipment's required for bar and cafe

21
S/n Description Quantity Unit price Total (birr)

1 Tables 60 2,500 150,000

2 Chairs 300 750 225,000
3 Long drawer (Balcony) 2 30,000 60,000
5 TV stand 5 2,000 10,000
6 TV set 27” 5 15,000 75,000
7 Casher box 3 5,000 15,000
8 Stools (high chairs) 12 1,500 18,000
9 Coffee machine stand 2 50,000 100,000
10 Refrigerator big 2 20,000 40,000
11 Refrigerator medium 2 12,500 25,000
12 Coffee roaster 2 7,500 15,000
13 Ice maker 2 5,000 10,000
14 Pastries stand 2 15,000 30,000
15 Juice maker 2 5,000 10,000
16 Draft beer machine 2 15,000 30,000
18 Tape recorder 2 10,000 20,000
19 DVD player 2 1,200 2,400
20 Satellite dish with receiver 2 2,500 5,000
21 Shelf with drawer 2 20,000 40,000
22 tea cup 500 25 12,500
23 coffee cup 500 25 12,500
24 Milk cup 500 25 12,500
25 Makiyato cap 500 25 12,500
26 water glass 500 15 7,500
27 draft glass 500 60 30,000
28 wine glass 500 100 50,000
29 Whisky glass 400 100 40,000
30 local gen glass 500 50 25,000

22
31 service tree 1000 150 150,000
Total - - 1,232,900
Furniture and equipment's required for dinning/restaurant room

S/n Description Quantity Unit price Total (birr)

1 Tables 50 2,500 125,000

2 Chairs 200 750 150,000
3 Long drawer (Balcony) 2 30,000 60,000
5 TV stand 2 2,000 4,000
6 TV set 27” 2 7,500 15,000
7 Stools (high chairs) 2 1,500 3,000
8 Refrigerator big for beer 2 20,000 40,000

9 Refrigerator medium for soft drank 2 12,500 25,000

10 Coffee roaster 2 7,500 15,000

11 Ice maker 2 5,000 10,000
12 Draft beer machine 1 15,000 15,000
13 water glass 200 12 2,400
14 draft glass 200 60 12,000
15 service tree 50 30 1,500
16 30-34 sauce pot 10 20 200
17 Sauce-medium 40 30 1,200
18 Soup pot 40 50 2,000
19 Medium 4 45 180
20 Large – round hot pot 10 80 800
21 Medium – round hot pot 10 57 570
22 Small – round hot pot 10 30 300
23 High rim flat 10 70 700
24 Flat rim round 12 50 600

23
 25 Normal alloy 20 45 900
26 Nonstick normal 20 20 400
Total 485,750
Furniture and equipment's required for Conference rooms

S/n Description Quantity Unit price Total (birr)

1 Tables 100 2,500 250,000

2 Chairs 1000 750 750,000
3 Buffet stand 5 20,000 100,000
4 Speaker (big) 5 5,000 25,000
5 Amplifier 3 20,000 60,000
6 Wireless microphone 5 750 3,750
7 Table microphone 20 350 7,000
8 LCD projector 5 30,000 150,000
9 Slid board 5 5,000 25,000
10 Satellite dish with receiver 5 2,500 12,500
11 TV stand 5 2,000 10,000
12 TV set 57” 5 15,000 75,000
Total - - 1,468,250
Kitchen materials
S/n Description Quantity Unit price Total (birr)

1 Stove 5 45,000.00 225,000.00

2 Toaster 5 15,000.00 75,000.00
3 Oven 5 40,000.00 200,000.00
4 Aluminum tables 8 4,000.00 32,000.00
5 Grill (electrical) 5 15,000.00 75,000.00
6 Washer sink 5 5,000.00 25,000.00
7 Refrigerator 5 20,000.00 100,000.00
8 Clip fryer 5 5,000.00 25,000.00

24
9 Pastries formwork 5 5,000.00 25,000.00
10 Petra 10 2,500.00 25,000.00
11 Cupboard 3 7,500.00 22,500.00
12 Shelf 3 5,000.00 15,000.00
13 Grill bench top 5 11,887.00 59,435.00
14 Deep friend double 6 4,218.00 25,308.00
15 Micro wave grill 5 3,250.00 16,250.00
16 Mincer meat 5 12,999.60 64,998.00
17 Brad oven 5 47,999.85 239,999.25
18 Pizza claye oven 5 29,841.00 149,205.00
19 mixer 15 KG capacity 5 37,999.45 189,997.25
20 Range commercial 5 38,745.00 193,725.00
21 Range linear 3 14,995.00 44,985.00
22 Fruit blender 3 3,585.00 10,755.00
23 Potato chopper 3 41,999.30 125,997.90
24 Onion peeler /chopper 3 15,780.00 47,340.00
25 Blender small 3 3,185.00 9,555.00
26 Deep refrigerator 6 9,450.00 56,700.00
27 Refrigerator 10 9,960.00 99,600.00
28 Digital scale (35k.g) 3 1,800.00 5,400.00
29 Waiting scale (220 K.g) 3 4,700.00 14,100.00
30 Kitchen hood 5 29,745.00 148,725.00
31 Kitchen cabin with double Sink 5 31,488.00 157,440.00
32 Kitchen cabin 5 27,488.00 137,440.00
33 Kitchen top -stainless steel 8 8,195.00 65,560.00
34 Kitchen top -stainless steel -large 8 13,195.00 105,560.00
35 Chaffing dish -silver 25 9,499.00 237,475.00
36 Spaghetti plate 50 712.2 35,610.00
37 Dinner plate 50 720 36,000.00
38 Dessert plate 50 720 36,000.00
39 Table fork 10 163.8 1,638.00
40 Table knife 10 136.8 1,368.00

25
41 Chopper knife 10 62.1 621.00
42 Table spoon 15 163.8 2,457.00
43 Kitchen Pan 10 499 4,990.00
44 Food Box 5 220 1,100.00
45 soup bowl 3 336 1,008.00
46 Cook pot large 10 693.2 6,932.00
47 Cook pot big 38 10 3,054.00 30,540.00
48 Cook pot medium 20 581.4 11,628.00
49 Cook pot small 20 469.6 9,392.00
50 restaurant Table w/ 4 Chair 50 9,246.00 462,300.00
51 cafe table 20 1,455.00 29,100.00
52 Restaurant chair- sheraton Type 100 2,510.00 251,000.00
53 cafe chair 100 964.5 96,450.00
54 Open generator-24 KV 3 389,748.00 1,169,244.00
sub total 5,237,428.40

26
S/N Aerobics and physical fitness Qty Unit cost Total Cost

1 Public addressing system 3 15,000 45,000

2 Aerobics dumbbell 10 3,500 35,000
3 Stepping rocks(assoried) 120 250 30,000
4 Wall mounted mirror 30 200 6,000
5 Bike Proms 9 5,500 49,500
6 Track tread mills(electrical) 2 22,000 44,000
7 Track tread mills(manual) 6 4,000 24,000
8 heart rate monitors and pedometers 6 2,500 15,000
9 body solid endurance up right 2 11,000 22,000
10 muscular dynamics 2 13,000 26,000
11 simplex II series 2 16,000 32,000
portable massage tables with tools and
12
accessories 2 17,000 34,000
13 massage body work tools 6 4,000 24,000
14 massage chairs with tools and accessories 2 11,000 22,000

27
 15 massage store heater 2 1,500 3,000
16 massage table electric warming pad 4 3,000 12,000
17 flece message table pad 12 1,000 12,000
18 massage table and video kit 2 6,000 12,000
19 pillows/body support/back care 16 4,500 72,000
20 cleaner and sanitizers 8 2,500 20,000
21 wall mirror(1.5 -2 ml) 6 400 2,400
22 sofa guest chair(three set) 10 4,500 45,000
23 Wall maound lockers 20 2,500 50,000
24 receptionist table 2 2,200 4,400
25 swivel chair 4 2,000 8,000
26 satellite dish with color 2 10,000 20,000
27 public addressing system 2 6,000 12,000
28 wall watch 2 400 800
Total 682,100

4.6. Land, Building and civil work

4.6.1. Land lease
The overall land required is about 1200square meters. Land lease cost at the rate of Birr 150 per
m2 average and for 99 years’ land holding is estimated to be Birr 8.3 million. Thus, the total
land & construction cost assuming that the total land lease cost will be paid in advance (5%)
amounts to Birr 833,917 government has following significances the remaining amount paid
within 40 years per year.

4.7. Environmental impact assessment

The project will seriously involve itself protecting conserving and developing the natural and
flora of the project area in line with the millennium development goal. To this to will play a
vital role in participating the varies organization and the community around the project area to
from an environmental commute in charge of all environmental issues to be handled in
accordance to varies environmental and water policies of 97/99. The owner of the project
believes to undertake several environmental issues for the conservation development and
creation of sustainable environmental around the project area.

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 4.8. Implementation Schedule
The actual implementation of the International 7-star hotel is planned to begin on the May 2025.
The major activities envisaged are processing of land preparation, construction and delivery,
installation and commissioning of the factory line. Undertaking of civil design works and
execution of construction works which will be carried out by side which opening and
processing of L/C will take 3 months. The FOB delivery of plant machinery and equipment will
take 4 months. Allowing additional one month for sea freight and clearing, the delivery of plant
of project site and thus commencement of installation work requires 5 months. Plant installation
and commissioning will take place for 4 months. The provision of infrastructural facilities such
as Electric Power and water will be carried out in the course of project implementation
schedule. Other activities such us man power recruitment and training, system development,
and procurement of raw and other supplies will also be duty performed to ensure that everything
is in place by the time the plant is ready for operation. All in all, the project is expected to take 2
years for completion as per the below detailed implementation schedule.
Table 7. implementation schedule
Years
Description 2023 2024 2025
Acquisition of Investment Land
(May 2025)
Opening & Processing of L/C x
Building Construction x

Delivery of Plant machinery and x

Clearing
Installation and Commissioning x

Recruitment of man power x x

arranging for other works
Customers, timely availability all the week including week end days, customer care, and quick
response to the feedback from clients.

29
 4.9. Manpower Requirement
For smooth and efficient operation of the organization, it has been anticipated that each unit
will have adequate number of qualified and experienced manpower. The labor component of the
International 7star hotel Service G/manager will hire qualified and experienced in management
whose main responsibility is to coordinate the overall activity of the project. The distinct units
have their own operational teams under them. To fill in all these work units with the required
manpower The project will provide 500 employees150 permanent (100 skilled & 50 unskilled)
and 175 casual skilled and unskilled workers. For smooth operation of the project, employees
will be given on job training, clear duties and responsibilities under the direct supervision of
their respective units.
Table 8. Manpower Requirement

Annual
S/n Description of Job Qualification No. Monthly Salary(Br)
1 General Manager BSc in Hotel management 1 10000 120000
2 Coordinator/supervisor BSc in Hotel management 5 6000 360000
1 Assistance Supervisor diploma in Hotel management 5 6,000 360000
2 Receptionist diploma in Accountant 5 5,000 300000
3 Pastry and Staff Cafeteria diploma in food preparation 5 7,000 420000
4 Cafeteria supervisor diploma in Hotel management 2 5,000 120000
5 Waiter diploma and Certificate 20 2,000 480000
6 Cooker diploma in food preparation 20 7,000 1680000
7 Coffee machine operator 12th complete 2 3,000 72000
9 Pastry attendant Certificate 5 5,000 300000
10 Coffee machine operator 12th complete 5 3,000 180000
11 Dessert attendant skill professional 4 1,500 72000
12 Massage expert Certificate 5 5,000 300000
13 Physiotherapist Certificate 5 5,000 300000
14 Sauna /steam Bath Certificate 5 5,000 300000
15 Sauna and Steam bath Certificate 5 5,000
attendant 300000
16 life saver Certificate 4 5,000 240000
17 Casher diploma in Accountant 4 2,500 120000
18 Cleaner vice 8th grade complete 10 1,500 180000

30
19 Plumber diploma in electrical 2 2,000
engineering 48000
20 Electrician diploma in electrical 2 2500
engineering 60000
21 Gardener skill professional 2 1000 24000
22 Guards gardener 8 1,000 96000
Total 125 - 6,432,000

5. FINANCIAL STUDY
Financial analysis of the proposed project of Cattle fattening farm will be projected to test the
financial visibility if the investigated organization. Quantifying both project cost and benefits
over the assumed project life, which is five years, made the project visible. Besides it has been
tried to make a realistic forecasting of costs and the benefits based in current market price of all
necessary materials. Once the anticipated cattle fattening operation has been attained both
projects cost and revenue is estimated to be consumed to be compensated by increasing in sales
revenue.

5.1. Classified Investment cost

The cost of the project is classified as fixed incitement cost and initial working capital. With
regards to fixed investment cost of the project, the land lease, building and civil works cost,
machinery and equipment cost office furniture costs and fuel costs will be required. As to
working and operating cost a brief illustration will be given as to utilities, salary expense,
maintenance.

5.1.1. Operational cost costs

Production cost of the project includes direct production and overhead costs. The major cost
item under this category includes cost of material and labour inputs, fuel and lubricants, repair
and maintenance, employee salary and benefits, insurance, office supplies and other
miscellaneous expenses; the total estimated production cost is birr 6,732,310 million 20.8 % of
the total project capital is. cost and depreciation cost and the other related costs.

31
NPV (Net Present Value)

It is a method of calculating the expected net gain or loss from project by discounting rate of all
expected future cash inflow and outflows to the present point in time. NPV at 30% and 35 %
discount rate is 128.8 million and 102.2 million respectively, this figure is positive value or
NPV>0 it is indicating that accepted the project until 30 % and 35 % of discount rate.

Break-even Analysis

The break-even analysis establishes a relationship between operation costs and revenues. It
indicates the level at which costs and revenue are in equilibrium. To this end, the break-even
point of the project including cost of finance when it starts to operate at full capacity (year 4) is
estimated by using income statement projection.

¿ cost
BE = = 23 %
sales variable cost

Payback Period (PBP)

The payback period is the amount of time required for a firm to recover its initial investment in
a project, as calculate from cash inflow. The investment cost and income statement projection
are used.

Initial investment Cost

PBP = = 5Years
Gross Profit + Depreciation

The payback period =5 is less than the maximum acceptable payback period (10) therefore
accept the project. to project the pay-back period.

IRR

32
The internal rate of the project is the rate of discount that radios the present value of the
investigated project to zero. In calculating the IRR, the discount rate can be adjusted until the
NPV becomes Zero or at least as to zero. IRR=33.9% of the project returns its initial investment
cost within its life.

5.2. MONITORING AND EVALUATION

Monitoring and Evaluation (M&E) has long been recognized as a vital aspect of development
projects generally and of industrial and services projects in particular. The monitoring of project
performance consists of the tracking of human, physical and financial resources and the
recording of how they are converted into outputs (project goods and services), and in turn,
outcomes and impacts.

5.3. CONCLUSION
The Project is found to be operationally profitable & has significant socio-economic benefits.
According to the projected income statement, the envisaged project starts earning profit from
the first year of production. The income statement and other profitability indicators show that
the project is viable. The project is believed to have significant social and economic benefits
that accrue to the society beyond those financial returns to its owner. The most remarkable
social benefits can be expressed in terms of job creation that leads to reduction in the level of
unemployment.

5.4. Recommendation
The project directly employs 500 persons; therefore, considering the attractive financial and
economic benefits the project is to produce, the promoter has made the necessary preparation
hoping that all the concerned offices & financial institutions should give their support to
facilitate the implementation of this plan

33