Haji Shifa

HAJI SHIFA SHUKRE
INTERNATIONAL
HOTEL
Promoter: HAJI SHIFA SHUKRE
HAJI SHIFA SHUKRE

INTERNATIONAL HOTEL
PROJECT PROPOSAL
+251911319732
6/4/2022
HAJI SHIFA SHUKRE INTERNATIONAL HOTEL
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Table of Contents
EXECUTIVE SUMMARY ……………………………….…………..3
1. INTRODUCTION…………………………………………..…………4
2. STUDY OF THE PROJECT SITE……………………………………..7
3- THE PROJECT…………………………………………………………8
4 MARKET STUDY……………………………………………………… 10
5 TECHNICAL STUDY……………………………………………………12
6 ORGANIZATION AND MANAGEMENT……………………………..15
7 FINANCIAL STUDY…………………………………………….………17
8 CONCLUSION and RECOMMENDATION…………………………... 27
2
EXECUTIVE SUMMARY
1. Project Name INTERNATIONAL HOTEL
2. Project Owner HAJI SHIFA SHUKRE

3. Nationality Ethiopian
4. Project Location SNNPRS, Seltie Zone, Alem Gebeya city Administration.
Diversified type of services provided by project is HOTEL

5. Product capacity
service,
6. Land Requirement 2000m2
7. Construction period 2 Years
The total investment capital of the project is estimated at birr

62,856,639.88 of which birr 48,619,120.7 is for fixed investment
8. Total initial capital
items while the remaining balance of birr 14,237,519.18 will be
initial working capital.
Out of the total investment cost of the project birr sources fund is
9. Funding
from bank loan 70% and from owners’ Equity 30%
Employment The total manpower required for the plant will be 80 permanent
10.
Opportunity and temporary employees at full capacity
Start operation at 60% of its installed capacity, which will grow to

11. Production program 70% in the 2nd year. Full capacity production will attained in 5th
year
Land acquisition and civil construction... 1st 6 month,

12. Project Action Plan mobilization-next 6 months, and 2nd yr. production and full
capacity is at 3rd year.
3
1. INTRODUCTION
Ethiopia is among the developing countries in Africa. Previously the economic and development
policies in the nation didn’t create a good investment plat form. The liberalization policies of the
present political system, however, are widely believed to bring about growth in economic
development. If not best, the situation is now better on matters related to Hotel and tourism,
conservation and manufacturing industry. In fact, until now land cannot be hold privately but can
acquire through a lease system. Taking note of this scenario the objective of the study is to look
into the possibilities and situations under which the promoters would get into the business of
Hotel and tourism industry.
The existing system encourages private investments and as the result, economic growth has been
apparent in industrial, agricultural and in other sectors of the economy. This on its turn has
demanded for the establishment of Hotel and tourism industries that provides different types of
Hotel services and other related.
1.1 MISSION STATEMENT
Based on, the present conductive investment policy of the country the promoter of the project
seeks to contribute to the economic development of the nation, encourage and support the
HOTEL and Tourism sector and the individual and users to attain their business objectives and
satisfy their needs respectively by providing efficient and state of the art Hotel service.
1.2 OBJECTIVE OF THE PROJECT
HAJI SHIFA SHUKRE INTERNATIONAL HOTEL to be one of the best HOTEL service render in
the area in terms of market share and long term profitability, it should strive for one of its
objective that is maximizing its revenue by promoting the modern & efficient Hotel determined
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by diversifying its activities and it will be timelier to introduce a business reform which is
required.
Therefore, the main objective of this project proposal is to assess the commercial viability of
constructing mixed use building mainly for Hotel services in Southern Nations, Nationalities and
people state.
Hence, based on the above facts and experience as well as to effectively Utilize the available
finance and human resources at hand, the following fundamental objectives were established:-
 To carry out and undertake the Hotel service business.

 To construct multipurpose building, fishing and finishing of the Hotel.
 Availing modern & efficient Hotel and related service.
 Provide efficient and effective services and satisfying the customer at large.
 To create employment opportunities services and contribute to the national economy.
 To promote the transfer of the technical knowhow in the individuals to improve their
capabilities to earn additional income and establishing, maintaining and enhancing the
long term customer relationship.
1.3 PROJECT RATIONALE
The data from Ministry of culture and tourism indicates that the number of Hotels in the country
is around 393 having 10,930 rooms and 14,535 beds, but the number of international and local
tourists increasing for the past five years. As indicated in the market section of this study, the
demand and supply gap for the services were very high in which it make show the proposed
project is feasibility in regards to profit and other economic benefits. The machinery,
equipment’s and furniture for the Bed Rooms, bar and restaurant, conference rooms and other
services requirements will be fulfilled through abroad (China ) and small quantity from local
markets. The cost of the items will be purchase abroad is very low comparing to the local
market. The inputs and raw materials are available in the local market at low cost.
5
The establishments of the selected project in rational in its profit generating and job opportunity
creating to the society in addition to satisfying the existing high demand and country especially
in the city.
The incentive policy of the government in Hotel and tourism investment, the high demand of the
products and services, easy availability of inputs for the services, cheap labor, availability of
infrastructures, and availability of machinery； equipment’s and furniture imported without tax
(exempted from tax) are the major points to be considered as the project is rationale.
1.4 PROFILE OF PROMOTER
The promoter of the project HAJI SHIFA SHUKRE has an Ethiopian National living in Alem
Gebeya City administration. Inductility; promoter has been engaged in the Public tasks for long
years as a volunteer, and and being a manager and owner of various private projects. The
promoter has management as well as the finance and marketing capacity and necessary
experience for the business.
The promoter has an initial vision, readiness and deep assessment of the situation to implement
the project, the purposes of this feasibility study is to obtain required land and investment
certificate for the realization of the project objective.
1.5 Premises required
For the proposed International Hotel service setup, a total of 2,000 square meters is required.
This land includes space for hotel service facilities (buildings), multipurpose field and including
Parking, green area.
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2. STUDY OF THE PROJECT SITE
Table 1:- Land requirement (m2)
S/No Buildings and Civil works Unit Total quantity
1 Hotel building m2 1,000
2 Café and restaurant m2 500
3 parking and green urea m2 500
total m2 3,000
STUDY OF THE PROJECT SITE

1.6. Location, area, and administrative division of Siltie Zone
Siltie zonal administration is among one of the 14 zones, 1 Reform Town (Hawasa) and 4 special
woredas that forms SNNPRS (southern nation nationality and people regional state) covering an
area of 2786.09 square kilometer. Astronomically, it is roughly lies between 7.43-8.10" north
latitude and 37.86-38.53 longitude It is bordered with Hadiya Zone in South, in north and North
West Qurage Zone, Oromiya Region in East, in south -east directions Halaba zone, it was
established soon at referendum that had been taken by Siltie nationality in 1993 EC. The zone’s
capital town is located on the main road from Addis Ababa to Hossana just 173 KM apart from
Addis Ababa. And the 2007 Population and Housing Census of Ethiopia the population of the
zone in 2013 E.C was about 1144659 where 49% male and 51% female concerning the
settlement 87% and 13% of population lives in rural and urban areas respectively. Siltie is one
of the central zones of the reigon with large plain land, mountainous area, plateaus. Regarding to
the climate of the zone it has 1\NO different agro-climatic conditions, Dega and Woina-Dega
and consisting 20.5% and 79.5 respectively. The average temperature range from 12-260C and
7
the average annual rainfall ranges from 780-1818mm. About 95.5% of the population engaged in
agriculture.
3. THE PROJECT
This Hotel relies mainly on the provision of hotel services to meet the existing potential demand.
Despite the existence of some hotels which are not hotels in the sector, there is still sufficient
economy and untapped market that can benefit HAJI SHIFA SHUKRE the potential investor. If
this project is successfully implemented and properly utilizes the potential resources, it will not
only generate income to the investors but also contribute to the national economy by enhancing
the inflow of foreign currency.
The impact of such a project will exceed its direct financial results through enhancing the
capabilities and expertise of local Ethiopian investors. The service process of the proposed
project should utilize high quality machinery& equipment's in accordance with the latest industry
standards and expected to provide the service that are acceptable by the consumer market with
competitive price.
The construction period of the Hotel is estimated to be one year. After full completion of
erection of equipment's availing furniture's & house hold materials, the service provision will
commence immediately.
3.1 LOCATION, SITE AND ENVIRONMENT
The Hotel is found on the way from Addiss –Halaba to Wolayta Sodo and Southern Ethiopia at
specific location called Sankura wereda. The Hotel's location, being out of the metropolitan area
occupies the very nature of resort/recreational site. Moreover the location, as a matter of fact, is
found just by the main asphalt road where there exists almost 24 hours flow of passengers to and
from the capital city.
8
Hence the Hotel is located at easy convene nee of reach to customers where location opportunity
and advantage are of very lucrative. But more importantly, the location offers very large
potential of ever growing demand to the Hotel's services.
The proposal presented for this project requires the consideration not only of technical,
commercial encounter for selecting proper locations and site the following factors must be
considered: Infrastructure service, existing industrial infrastructure economic and social
infrastructure & institutional frame work, urbanization, ecological and environmental impact of
the project.
Most projects have environmental impact that creates serious or irreparable pollution that results
the close down of the project. The potential risk related to the location of with the negative
environmental impacts are seriously considered and its risk free
3.2. SERVICE DESCRIPTION
International Hotel is a building usually providing overnight accommodations, catering and bar
and restaurant services, Conference and other ceremonials hall services, cultural services and
others. It is a type of Hotel, which specifically utilizes the open environment and associated
natural and historical attractions for recreational purpose of its customers.
In this project proposal a standard International Hotel is considered to provide local and
international tourists and guest's services and facilities where food, drinks, bed rooms and other
services are provided in an efficient, cordial and pleasant manner and style. The proposed Hotel
has the following services;
BED ROOMS (80): - Bed rooms as well contain all the facility contained in the first class except
salon, kitchen and outdoor space in the rooms； they are backed -up with very reasonable price
that promotes their demand. From the total bed rooms 25 rooms have 1.0 m*2m two beds and
the remaining has one 1.2 m*2m bed. Each rooms has furnished in standard bed rooms facility.
CAFE AND RESTAURANT ： - The bar and restaurant will provide in-house food and
beverage services. The restaurant will basically serve breakfast, lunch and dinner by providing
daily menu and other choices of customers.
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The restaurant will accommodate both national and international set ups with open kitchen
compartment where the customers can see and participate in cooking. This feature of the
restaurants currently is highly preferred worldwide. Its total capacity is estimated to be 150
persons at a time.
OTHER SERVICES: - Other services include Recreation for children, car wash and other related
services and shopping area.
4 MARKET STUDY
Ethiopia is investing the modernization and expansion of major infrastructures. As a result, the
stock of Hotels in Ethiopia has increased sharply over the last few years. While tourist
accommodation is available as the major attraction, improvement as well as new construction is
taking place.
The total number of international tourists arriving in Ethiopia is steadily increasing. As a

gateway to all international inbound, Outbound and transit tourists/passengers, Addis Ababa has
been taking the lion's share in the country's tourist arrivals hosting an estimated 95-99% of the
total international tourist's arrivals.
But according to data obtained from world Hospitality Group , Ethiopia has only six
internationally branded Hotels with just 990 rooms, a fact that was declared at the inaugural
ceremony of the Hotel Investment Forum (AHIF) 2014 back in June that "this is not
acceptable’ Overall growth and the continued progress in the tourism industry are forecasted by
the world Travel& Tourism Council to be 4.8% per annum over coming decade. Increasing the
supply of high quality top-end Hotel accommodation through Hotel construction is necessary for
improved competitiveness and the economic success of the sector.
It was to reduce this dilemma that two organs, the Tourism Transformation council and the
Ethiopian Tourism Organization were established. The former provides secretariat for guidelines
for the country's tourism marketing initiatives while the later serves as an earn the former. The
two new offices are tasked to transform the industry as the country around US 150 million in
2014/15 from the sector.
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It is not the building that makes a Hotel. It is the flawless combination of the right peoples the rig
prices and the right technology providing an unforgettable service. According to unofficial
estimates from the AHA, approximately one Hotel joins the market every month and that number
may rise up to 1.5 Motels a month in the coming few years. Thanks to both local and
international architects commissioned by developers, a number of dazing buildings are giving the
city a new look. However, there are cases in which the science behind the glamour is not so
attractive.
4.1 PAST SUPPLY AND DEMAND
It is generally believed that currently there is an acute shortage of standard Hotels in Major
cosmopolitan cities of the country. In order to minimize, if not eliminate the prevailing wide
demand-supply gap; the government is undertaking a number of courageous measures. This
includes issuing of plots of land to individuals and accompanied with attractive investment
incentives for the construction of Hotels.
During the period (1991-2005), on average about 17% of the total number of tourists that have
visited the country were for vacation purpose while those who visited the country for business
account 22% of the total. Regarding the others, transit accounts for 18% visiting relative 9%
conference 11% and those who did not stated their purpose account for 22% of the total. As the
gateway of all intimation inbound, outbound and transit tourists/passengers, Addis Ababa has
been taking the lion's share in the country's tourists arrivals hosting an estimated 95-99% of the
total international tourist arrivals.
Table 3 Total Number of Tourists arrivals in Ethiopia
Year Number Growth rate Year Number Growth rate
1991 81,581 - 1999 115,000 2.7

1992 83,213 2 2000 135,954 18.2
1993 93,072 11.9 2001 148,438 9.2
11
1994 98,070 5.4 2002 156,327 5.3

1995 103,336 5.4 2003 179,910 15.1
1996 108,885 5.4 2004 184,079 2.3
1997 139,000 27.7 2005 227,398 23.5
1998 112,000 -19.4
Source: Ethiopian Tourism Communion
4.2 DEMAND AND SUPPLY ANALYSIS
In order to project tourist arrival in to Ethiopia, the past trend in tourist arrival is considered.
During the period 1991-2005, the total tourist arrival in the country has registered an 8.2%
average growth rate. Accordingly, assuming that this growth rate will continue in the future and
taking year 2014 figure (700,572) as a base, tourist arrival is forecasted. Moreover, in order to
compute the unsatisfied demand the total annual capacity of standard Hotels, which computed to
be 597,140 rooms per annum, is taken as the existing capacity. The projected tourist room
requirement, which is calculated by taking the projected tourist arrival and multiplying it by
average Hotel stay of tourists (4 days), the unsatisfied demand, is shown in Table 4.
Table 4 EXISTING HOTEL CAPAC11 Y. PROJECTED AND UN SATISFIED DEMAND
Year Projection of Tourist Arrival Room Night Demand Existing Hotels Annual Capacity Unsatisfied Demand
2022 Arrival
758,019 3,032,156 597,1 40 1,253,876
2023 831,569 3,326,276 644,911 1,547,996
2024 912,231 3.64&924 696.504 1.870,644
2025 1.000.718 4,002,872 752,224 2,245,920
2026 1.097,729 4,391J 48 812,402 2.612,862
2027 1,204,273 4.11 7,092 877,395 3,038,812
This shows that the demand and supply gap for Hotel service is high and forecasted to be
continued since based on the assumption that the sector growth is continued as of the past
experience of the sector.
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5 TECHNICAL STUDY
5.1 CAPACITY AND SERVICE PROGRAM

From the market study, it is observed that there is a great demand gap between the demand and
supply of the service. Therefore, taking in to account the market study and economic scale of
service provision the envisaged project will have capacities as shown below Table 5.
Table 6:- SERVICE AND SALES CAPACITY OF THE PROJJECT
SNo Descriptions of services Total Occup/ year Year-I Year- Year -3 Year-4 Year -5 Year 6 Year -7
At full capacity 2
60 80 100% 100 100 100% 100%
1 Bed Rooms 365 219 292 365 365 365 366
% % % %
2 Restaurant & Cate 150 (persons/day) 32850 43800 54750 54750 54750 54750 54750
3 Other Services 365 219 292 365 365 365
5.2 MATERIALS AND CONSUMABLES

The annual cost and list of raw materials are indicated in the attached cost of goods/service sold
based on that the inputs are forecasted as follow；
 Food and beverage cost were 40% of the sales

 Other service costs were 30% of other service income.
 OIL GAS COST SERVICES INPUTS (75% OF ITS SALES)
 Utilities like electricity, water and cleaning agents were 5% of the total sales.
5.3 TECHNOLOGY
The technical data has been complied by visiting the existing international Hotels with in Addis
Ababa and discussion with various professionals in similar fields and review of technical
documents about the international tourist standard Hotels.
5.4 ENGINEERING
5.5 A. MACHINERY, MATERIALS AND EQUIPMENT

The under listed are the list of machinery and equipment by major category of service centers.
The details of the machinery and equipment are fully described in annex A. As shown below, the
total cost of Machinery, Equipment’s and Furniture is estimated at Birr 12,000,000.
Table7: - Machinery, Equipment’s and Furniture Cost

13
S/No Description Total Price (Birr)

1 BED ROOMS 5,000,000
2 RESTAURANT 3,000,000
3 CAFTER1A 1,000,000
4 KITCHEN 500,000
5 ORHER EQUIPMENTS and 1,000,000
FURNITURE
7 MULTIPURPOSE ASSEMBLY HALL 1,000,000
11 PARK and RECREATION CENTER 500,000
Total 12,000,000
5.6 B. LAND, BUILDING and CIVIL WORKS

Land requirement by the envisaged Hotel is estimated at 2,000 m2. The Hotel building and civil
work area is estimated to cover as shown below, the total cost of building and civil work is
estimated at Birr 34,650,000.
Table 8 - Lists of Building and civil Works and Their Costs
S/No Buildings and Civil works Unit Total quantity Unit cost Total cost
1 Hotel building m2 1000 30,000 30,000,000
2 Café and restaurant M2 500 6,000 3,000,000
2 parking and green area m2 500 3,300 1,650,000
Total 34,650,000
5.7 PROJECT IMPLEMENTETION SCHEDULE
The successful implementation of any project proposal depends on the planning of core activities
to be performed during the project phase, and meeting the desired result by close follow up And
due attention,
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Therefore, considering that the basic assumptions will be realized, the pre operating activities to
be undertaken with their corresponding time table set for the implementation of the project are
presented here under.
Table 9: - project implementation schedule
No Item Description Month (starts from JUN 2022)

12 3 4 8 10 12 14 16 20 22 24
1 Applying &getting, land, the bank loan
2 Contracting Fur & Equip suppliers
3 Construction of civil works
4 Plant & machinery erection
5 Man power requirement
6 Purchase of fixed assets & raw for the
service materials
7 Final preparation
6 ORGANIZATION AND MANAGEMENT

6.1 MANPOWER REQUIREMENT
The organizational structure of the business was designed based on the functions of the overall
business towards the achievements of the setting objectives and selecting the best way of
managing the organizations resources (human resource, capital, information and technology)
effectively and efficiently. In addition to the above mentioned bases of the organization structure
design, the intentions of the business and the external economic situations of the area taken in to
account. By considering all of the above,, the skeleton of the organizational structure is shown in
Fig 1 below.
Fig 1: - Organizational Structure.
General Manager
Secretary
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Operational Head
Finance & Administration
6.2. THE MANAGEMENT TEAM
The management teams of the Motel are the General Manager, Operation and Customer Service'
Head and Finance & Administration Head. The General Manager has the responsibility of
managing the overall function of the Motel and also the head of the team.
6.3 PERSONAL PLAN
The Hotel will recruit personnel's for the managerial positions who have an extensive experience
on the area of businesses and also have expected educational background. The management has
an advantage of sharing experience from the top management of other Hotels to utilize the sell
experienced administrative system of the Hotel and other sister companies.
A total of 80 permanent and temporary staff workers are proposed to attain the required outputs.
The availability of professional and semiskilled workers is assessed accordingly, in which the
gap in skills and efficiency, if existed, can be filled by extensive training program to cope up
with the necessary labor norm’
By considering the expansion plan of the business and the services it will render, additional
personnel will be employed to fill the vacant posts of the organization that comes from the
expanded part of the organization.
Salaries are generally in line with market pay system for the sector. The project is planned to
have fringe benefits for both skilled and unskilled workers under the general labor legislation
with regard to the entitlement in the social security system for government employees.
16
Currently based on the study the detail of manpower requirements to start its operation fully is
depicted in table 8 .the annual salaries and benefits is estimated to be Birr 1,289,560.
Table 10： - MANPOWER REQUIREMENT
S.N Job title No. of Monthly Yearly

1 General Manager 1Post Salary6,00072,000
Salary
2 Operations Head 1 4,000 48,000
3 Administration & Finance 1 4,000 48,000
4 Purchaser 2 2,500 60,000
5 Accountant 1 3,000 36,000
6 Secretary 2 2,000 48,00()
7 Driver 2 2,000 48,000
. 8 Cashier 2 2,000 48000
9 Guards and Gardner 4 850 40,800
10 Receptionist 2 1,200 28,800
11 Cooker 4 1,500 72,000
12 Supervisor 2 2,000 48,0()0
13 Restaurant Attendant 6 950 68,400
14 Laundry service Attendant 4 950 45,600
15 Accommodation Attendant 4 950 45.600
16 Store Keeper 2 1,750 42,000
17 Recreation center Attendant 4 1,200 57,600
S.N Job title No. of Post Monthly Salary Nearly Salary

Cafteria Attendant 34,200
18 3
950
19 Cleaner 6 850 61,200
20 technician 48,000
2 2,000
Sub Total 58 1,034,400
Employees benefit (15% of basic salary 155,160
21 daily laborer 25 100,000

Grand total 80 1,255,360
7 FINANCIAL STUDY
7.1 Fixed costs
a) Building and civil works
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The cost of building and construction is one of the major cost components of fixed costs. The
construction cost of building, is not based on actual specifications and engineering cost estimate
(bill of quantities). Considering the prevailing local contractors average unit cost of the project
area building and construction cost is estimated Birr 34,650,000. The detail is shown as follows.
Table 8 - Lists of Building and civil Works and Their Costs
S/No Buildings and Civil works Unit Total quantity Unit cost Total cost
1 Hotel building m2 1,000 30,000 30,000,000
2 Café and restaurant M2 500 6000 3,000,000
2 parking and green area m2 500 3,300 1,650,000
Total 2,000 34,650,000
b) Machine- and equipment’s
The under listed are the list of machinery and equipment by major category of service centers.
The details of the machinery and equipment are fully described in table 12. As shown below, the
total cost of Machinery, Equipment’s and Furniture is estimated at Birr 12,000,000.
Table12: - Machinery, Equipment’s and Furniture Cost
S/No Description Total Price (Birr)

1 BED ROOMS 5,000,000
2 RESTAURANT 3,000,000
3 CAFTER1A 1,000,000
4 KITCHEN 500,000
5 ORHER EQUIPMENTS and 1,000,000
FURNITURE
7 MULTIPURPOSE ASSEMBLY HALL 1,000,000
11 PARK and RECREATION CENTER 500,000
Total 12,000,000
c) Vehicles
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The types of Vehicles required by the envisaged Hotel are delivery van, service vehicle. And
their total cost estimated 1,690,000 birr.
Table 13: Cost estimated of Vehicles
S/Noitem Unit Total quantity Unit cost Total cost

1 service vehicle pieces 2 550,000.00 1,100,000,00
2 delivery van pieces 1 590,000.00 590,000
0
Sub total 1,690,000
d) Office furniture and other equipments
Office furniture and equipment to be purchased includes office tables, chairs, shelf, filing
cabinet, computers with accessories and other miscellaneous equipment’s cost estimate is birr
279,196.38
Table 14： Summary of fixed costs
S/n Description Cost estimate (Birr)

1Building & constructions 34,650,000
2 Machinery, equipment and furniture 12,000,00
3 Vehicles 1,690,000.
0
4 Office furniture & other equipment’s 279,120.7
00
Total 48,619,120.7
54,039.39
7.2 Service Production costs
Production cost of the project includes direct production costs and administrative costs. The
major cost items under this include cost of goods/service sold, salary of employee, utilities, fuel
and oil and lubricants, repair and maintenance, office supplies and others indicated as follows
and summary shows in table 19.
19
Raw materials and inputs
The annual cost and list are indicated in the attached cost of goods/service sold based on that the
inputs are forecasted as follow;
 Food and beverage cost were 40%of the sales

 Other service costs were 30% of other service income.
 OIL COST SERVICES INPUTS (75% OF ITS SALES)
 Utilities like electricity^ water and cleaning agents were 5% of the total sales.
Table 15: Cost of Goods sold Projection
S.N Item Year-1 Year -2 Year -3 Year -4 Year-5

o FOOD & BEVERAGE
1 29,132,650 36,839,31 50,669,93 55.897,248
COST (40% of ITS
.00 9.00 5.80 .33 61,619,840.24
SALES)
OIL COST SERVICES 18,750,000 27,500,00 37,812,50 41,592,086
2
INPUTS (50% OF ITS .00 0.00 0.00 .25 45,751,294 88
UTILITIES
SALES) AND
3 4,188,775. 6,139,886.5 8.444,989.3
CLEANING AGENTS (5
00 0 0 9,316,208.06 10,269,973.37
% OF SALES)
Total 52,071,425 70,479,20 96,927,42 106,805,542. 7.641.108.49
.00 5.50 5.10 64
Utilities: - The major utilities required and their costs are: for water, electric power, Fuel and
lubricants estimated as follows
Table 16: Cost of Utilities
S/NoUtility Unit of Qty. Unit price Cost( in Birr)

1Electricity Measure kWh 49,733 0.673633,500.00
2Water It. 3,222 4.514,500.00
3Fuel It. 4,500 2090,000.00
Oil and lubricants Ls 16,380.00
Total 154,380
1
20
Salary expense:
The annual salary expense for permanent employees including Benefits is calculated to be birr
1,289,560/year.
Repair and maintenance cost
Table 18: Repair and maintenance cost
S.N Item Cost estimate/year

% Value
1 Building & constructions 2 633,000
2 Machinery and equipment 3 360,000
3 Vehicles 5 84,500.00
4 Office furniture & other equipment’s 5 13,959.82
Total 1,091,459.82
Insurance： - It is assumed to be 0.75% of fixed investment cost = birr 342,143.40 /year.
Office supplies：・Including stationary and sanitary supplies annual cost of birr 195,000.00 is
considered.
Miscellaneous expense： -It includes cost of land rent, legal and license fees, and other
miscellaneous expenses. It is estimated at birr 150,000.
Table 19 Summary of project SERVICE production costs in birr
Cost item Annual cost in birr

S.N
Direct cost of production 1 2 3 4 5
A cost of goods and services sold 52.071,425 70.479,205. 96.927.425 106,805.542.64 117.641.108.
sub-total .00 52,071,425 5070,479,205. .10 49
96,927,425 106,805,542.61 117,641,108.
B Operating expenses:- .00 50 .10 49
21
1 ^Salary expense 1,289,560 1585,000 1,605,000 1,615,000 1,670,000

Employee benefit (15% of 155,150 166,947 171,342 175,076 178,283
2
salary)
3 Property insurance 342,143.4 135,731 141,804 160,685 171,453
4 Audit and legal fee 0 12,000.00 13,200 14,520 15,972 17,569 '
6 Telephone, fax, internet & 36,000.00 39,600 43,560 47,916 52,708
postage
S
.N Cost item Annual cost in birr .
7 uniform ‘sanitary material 195,000.00 214,500 235,950 259,545 285,50
stationary & related expenses 0
8 Repair and maintenance 1,091,459.82 575000 580000 590,000 610000
9 advertisement & sales promotion 50,000.00 55,000 60,500 66,550 73,20
11 Electricity 33,500.00 36,850 40,535 44,589 5 49,04
12 Water 14,500.00 15,950 17,545 19,300 7 21,229 I
1 Fuel 90,000.00 99,000 108,900 119,790 131,769
3 1 Oil and lubricants 16,380.00 18,018 19,820 21,802 23,98
4 1 Miscellaneous expense 150,000.00 165,000 181,500 199,650 2 219.61
5 sub-total 3,475,693.22 3,298,510.9 3,498,510 3,708,510 5 3,938,51
Grand Total 0120,334,31
55,547,118.22 72.502,648.56 99,153,212.47 109,253,908.74
1.20
Initial working capital
Table 20: Determination of initial working capital
22
Table 7.2 Determination of initial working capital

S/n | Cost item Annual cost Period Initial W.C.
A Direct cost
1Direct cost of goods and services sold 52.071,42522 I months 14,005,952
sub-total 52.071,42522 08 14.005,952.
B Operating expenses:-
1 Salary expense 1,289,560 I months 67,650.00
2 Employee benefit (15% of salary) 155,150 1 months 10,147.50
3 Properly insurance 342000 12 months 73,391.95
4 Audit and legal fee 12,000.00 12 months 12,000.00
6 Telephone, lax, internet & postage 36,000.00 1 months 3,000.00
7 uniform .sanitar\f material, stationary & related 195.000.00 I months 16,250.0
8 Repair and maintenance 1,091,459.82 1 months 19.595.9
9 advertisement & sales promotion 50,000.00 1 months 4,166.67
11 Elcclricity 33,500.00 1 months 2.791 67
12 Water 14,500 00 1 monihs 1,208.33
13 Fuel 90,000 00 I months 7,500.00
14 Oil and lubricants 16,380.00 I months 1.365.00
15 Miscellaneous expense 150.000.00 1 months )2,500.00
sub-total 2,617,199.81 231,567.1
G.Total 55,547,118.22 0 14,237,519.18
7.4 Project capital and financing
Project capital: - The total investment capital of the project is estimated at birr 62,856,639.88
of which birr 48,619,120.7 is for fixed investment items while the remaining balance of birr
14,237,519.18 will be initial working capital. The detail of the total initial investment capital
of the project is given as below:
Table 21: The total investment capital
S/n Description Cost estimate (Birr)

1Building & constructions 34,650,000
2 Machinery, equipment and furniture 12,000,000
3 Vehicles 1,690,000
23
4 Office furniture & equipment’s 279,196.38

Total 48,619,120.7
5 Working capital 14,237,519.18
Total 62,856,639.88
Financing： - The total investment capital of the project is to be financed from Bank loan 70%
and the promoter’s equity 30%.
Loan repayment schedule: - At this stage of the project it is to be supported by loan from
government agencies or local banks the recovery to the loan is assured by observing the financial
evaluation criteria and the social and economic feasibility. The loan will repaid with interest rate
of 10% in ten years.
Table 22: Repayment of Bank lone
project Principal interest 10% total repayment Outstanding Balance

0 Year pavniein 41,899,647.706
1 4,189,964.77 4,189,964.77 8,379,929.54 37,709,682.936
2 4,189,964.77 3,770,968.29 7,960,933.06 33,519,718.166
3 4,189,964.77 3,351,971.82 7,541,936.59 29,329,753.396
4 4,189,964.77 2,932,975.34 7,122,940.11 25,139,788.626
5 4,189,964.77 2,513,978.86 6,703,943.63 20,949,823.856|
6 4,189,964.77 2,094,982.38 6,284,947.15 16,759,859.086
7 4,189,964.77 1,675,985.9 5,865,950.67 12,569,894.316

8 4,189,964.77 1,256,989.4 5,446,954.17 8,379,929.546
9 4,189,964.77 837,992.95 5,027,957.72 4,189,964.776

4,189,964.77 0.00
10 418,996.48 4,608,961.25
Depreciation of fixed investment items: - The straight-line method has been used to
depreciate/amortize all fixed items of the project. The depreciation rate applied for is indicated in
table its original value cost i.e. Total Annual depreciation cost estimated birr 3,176,339.25.
Table 23: Fixed asset depreciation schedule
24
Type of asset Total cost Depr. Depre. Expense

rate
Building & constructions 34,650,000 5% 1,582,500
Machinery, equipment and furniture 12,000,000 10% 1,200,000
Vehicles 1,690,000 20% 338,000
Office furniture & other equipment 279,196.38 20% 55,839.28
Grand total48,619,196.38 3,176,339.25
7.5 Revenue projection/ SALES FORCAST
As indicated at previous sections The Company will compare its prices with the other
competitors in the competitive market. As the bases of the revenue estimate the prevailing
average price and the revenue from sales of services is estimated as follows. The sales are
forecast based on the following assumptions;
 The price for each services and items are increased by 10% in each year of the forecasted
period
 The capacity utilization of the Hotel will be 60%, 80% and 100% for the first to third
years of the forecasted period
 The average daily sales is taken in to account for the forecast of the total sales of
beverage, foods and other services based on the beginning year daily average sales
assumptions to the total forecasted years.
 Cost of beverages and foods inputs were % of the revenue,
 Average Prices for oil gas item is taken from current oil gas prices.
 Cost of other service and inputs were forecasted as 20%of the service sales.
 Utilities, cleaning agents and others were forecasted as 5% of the total sales.
 The Bar, Restaurant and Cafe has assumed that at full capacity 150 persons per day will
have got the service and assumed that each will expected 250 birr.
25
Table 24: SALES FORCAST
S.No.Service Year-1 Year -2 Year -3 Year -4 Year -5

2 Bed Rooms
Description 12,330,188.67 13,030,000 15,690,000 18,550,000 22,005,000
3 Restaurant & Cafe 13,497,500 9 16,863,000 23,186,62 25,505,28 28.055,816
4 GUEST HOUSE 38,500,000 55,000,000 75,625,00 83,184,17 91.502,590
5 Other
serviceServices 803,000 1,107,150 0 1,577,235 3 2,269,355 2,939,181
Total 65,130,688.67 81,000,150 111,430,110 123,104,190 135,857,499
7.6. FINANCIAL EVALUATION
a) Profitability
Based on the projected profit and loss statement, the project will generate a profit throughout its
operation life. Annual net profit will grow from Birr 6,407,231.2to Birr 10,385,696 during the
five years life of the project.
Table 25: The Project projected profit/loss statement in birr
Gross sales 65,130,688.6 83,000,149 111,430,110 123.104.190 135,857,499

Less production 755,547,118.2 72,502.649 99,153,212 109.2S3.909 120334311
Gross
costs income 29,583,570.45 10,497,500 12.276,898 13.850281 15,523.188
Less: Depreciation 3,176,339.25 1,658,323.58 686,479.02
Profit before tax 6,407,231.2 8,839,176.4 11,590,4 J9 13.163,802 14,836,709
Less: income tax (30 0 22 0 3.477,126 3,949,141 4,451,013
Net
%) profit 6,407,231.2 8,839,176.4 8,113,293 9,214.662 10,385.696
22
b) Ratios
In financial analysis financial ratios and efficiency ratios are used as an index or yardstick for
evaluating the financial position of a firm. It is also an indicator for the strength and out over the
period of the project life and all the results are weakness of the firm or a project. Using the year-
end balance sheet figures and other relevant data, the most important ratios such as return on
26
sales which is computed by dividing net income by revenue return on assets (operating income
divided by assets), return on equity (net profit divided by equity) and return on total investment
(net profit plus interest divided by total investment) has been carried found to be satisfactory.
c) PAY-BACK 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 is estimated that project's initial investment will be
fully recovered with in 6 consecutive years.
d) INTERNAL RATE OF RETURN AND NET PRESENT VALUE
Based on the cash flow statement, the calculated IRR of the project is 23.7% and the net present
value at 15% discount rate is Birr 61,000,000 million.
8 CONCLUSIONS and RECOMMENDATION
8.1 CONCLUSION
Therefore, this project feasibility study is compiled and submitted based on the facts and figures
by summarizing the need and the call by the existing potential market to create opportunity for a
better supply of the envisaged product. Moreover, depending on the acceptability and
achievement of the product in its first phase, additional marketable related product may be
introduced in the future.
8.2 RECOMMENDATIONS
The profitability of this business is out of question, as clearly demonstrated by the financial
projection, which projections ore actually very conservative with regard to the assumptions on
operating cost of sales and selling price. This was done deliberately, so that the bank can see the
profitability of the operation even under the most conservative assumptions. The project is found
27
to be profitable throughout its life with sufficient capacity to repay the requested bank loan
(principal plus interest) and operational costs. The financial Analysis shown that this project is
financially viable, bankable and worth investing and, therefore, implementation of the project
entails no financial risk.
28

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HAJI SHIFA SHUKRE

Promoter: HAJI SHIFA SHUKRE

HAJI SHIFA SHUKRE

STATEMENT OF CONFIDENTIALITY & NON-DISCLOSURE

BY ACCEPTANCE OF THIS DOCUMENT, THE RECIPIENT AGREES TO BE BOUND BY THE AFOREMENTIONED

EXECUTIVE SUMMARY ……………………………….…………..3

2. STUDY OF THE PROJECT SITE……………………………………..7

6 ORGANIZATION AND MANAGEMENT……………………………..15

8 CONCLUSION and RECOMMENDATION…………………………... 27

2. Project Owner HAJI SHIFA SHUKRE

4. Project Location SNNPRS, Seltie Zone, Alem Gebeya city Administration.

Diversified type of services provided by project is HOTEL

6. Land Requirement 2000m2

7. Construction period 2 Years

The total investment capital of the project is estimated at birr

Start operation at 60% of its installed capacity, which will grow to

Land acquisition and civil construction... 1st 6 month,

1.1 MISSION STATEMENT

1.2 OBJECTIVE OF THE PROJECT

 To carry out and undertake the Hotel service business.

1.3 PROJECT RATIONALE

1.4 PROFILE OF PROMOTER

1.5 Premises required

2. STUDY OF THE PROJECT SITE

Table 1:- Land requirement (m2)

S/No Buildings and Civil works Unit Total quantity

1 Hotel building m2 1,000

2 Café and restaurant m2 500

3 parking and green urea m2 500

STUDY OF THE PROJECT SITE

3.1 LOCATION, SITE AND ENVIRONMENT

3.2. SERVICE DESCRIPTION

The total number of international tourists arriving in Ethiopia is steadily increasing. As a

4.1 PAST SUPPLY AND DEMAND

Table 3 Total Number of Tourists arrivals in Ethiopia

Year Number Growth rate Year Number Growth rate

1991 81,581 - 1999 115,000 2.7

1994 98,070 5.4 2002 156,327 5.3

Source: Ethiopian Tourism Communion

4.2 DEMAND AND SUPPLY ANALYSIS

Table 4 EXISTING HOTEL CAPAC11 Y. PROJECTED AND UN SATISFIED DEMAND

5.1 CAPACITY AND SERVICE PROGRAM

Table 6:- SERVICE AND SALES CAPACITY OF THE PROJJECT

5.2 MATERIALS AND CONSUMABLES

 Food and beverage cost were 40% of the sales

5.5 A. MACHINERY, MATERIALS AND EQUIPMENT

Table7: - Machinery, Equipment’s and Furniture Cost

S/No Description Total Price (Birr)

5.6 B. LAND, BUILDING and CIVIL WORKS

Table 8 - Lists of Building and civil Works and Their Costs

5.7 PROJECT IMPLEMENTETION SCHEDULE

Table 9: - project implementation schedule

No Item Description Month (starts from JUN 2022)

6 ORGANIZATION AND MANAGEMENT

Fig 1: - Organizational Structure.

6.2. THE MANAGEMENT TEAM

6.3 PERSONAL PLAN

Table 10： - MANPOWER REQUIREMENT

S.N Job title No. of Monthly Yearly

S.N Job title No. of Post Monthly Salary Nearly Salary

21 daily laborer 25 100,000

Table 8 - Lists of Building and civil Works and Their Costs

b) Machine- and equipment’s