PROJECT PROPOSAL ON TWO STAR

HOTEL BUILDING

LOCATION :NORTH SHAWA DARA WOREDA

GUNDO MESKEL TOWN

PROMOTER:-AHMED GORO GEMADA

OCT, 2022

ADDIS ABABA, ETHIOPIA

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 \EXECUTIVE SUMMARY
1. Project title – Two StarInternational Standard Hotel
2. Promoter – AHMED GORO GEMADA
3. Project Location: North Shawa Dara Woreda Gundo Meskel Town
4. Total Proposed Land Area (M2) = 500m2
5. Employment Opportunity = 50 Per.and 100 tempo. Workers
6. Total Capital = Br. 15,000,000
7. Source Fund
a. Own Equity (30%) = Br. 4,500,000
b. Bank loan (70%) =Br. 10,500,000
8. Foreign exchange requirement =Br. 12,309,065
9. Net Revenue at Full Capacity = Br. 10.01million/year
10. Tax payment at full capacity operations =Br. 10.78 million/year

Hence, the project is feasible and important to be undertaken being the first of its kind in
the sub-urban area of the country having international quality and standard. Furthermore,
the project would contribute immensely to the development of tourism industry in
particular and the country in general.

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1. Introduction

I
n history of mankind and in no measure a particular country or society subdue it self
to a humiliating and grinding poverty as poverty is the indication of deprivation of
basic necessities. Ethiopia, the country with immense natural resource potential, is
always cited as one of the home of the people on the face of the earth stricken with
famine, drought and poverty. What so ever the past and whether it was desecrate or
blessing, the existing situations in this country is the most important one. Today in
Ethiopia the gleaming hope for development is quite encouraging, the government
policies concerning the private investments are invigorating and to indicate some major
steps taken the country in private investment policy endeavors;
 Capital goods and building materials may be imported duty-free by star designated
hotels and international standard restaurants.
 Buses for tourist use may be imported duty free.
 Four-wheel-drive passenger vehicles of the Land Cruiser type may be imported duty-
free subject to the conditions that Five brand new vehicles must be purchased within a
period of one year in a maximum of two consignments.
 Any investor may employ duly qualified expatriate experts required for the operation
of the business and so on. Furthermore, to some extent the living standards of
country’s citizens are improving. In line with social changes people are trying to pull
out themselves from primary economic activities to civilized activities and improving
their income. As income increases many people start to change their living habits and
tastes: with social changes facilities and type of social services should be changed and
modernized. One of the modern versions of social services is the development of
modern hotels and tourism sector. But due to known reasons there is no or very few
hotels in many medium and small towns of the country in general and the region in
particular. A few existing ones are with backward or poor facilities which are
nuisance to customers and undesirable for country’s image. Owing to this realities

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 and the increasing demand for such facilities, this project is proposed to be
established in the area where there is no such hotel at all.

2. Background
2.1. The industry (Hotel and Tourism sector)
The development of hotel and tourism can be categorized in the third stage of traditional
economic development of a particular country. But today the existing situations are
changing as a number of countries in the world are holistically the whole economic
growth endeavors at the same time not necessarily giving focus to a particular sector of
the economy for achieving fast and sustainable economic growth.
Thought, Ethiopia’s economic policy is ‘agriculture led industrialization’; the country is
working on all strategic areas including the tourisms sector and the income being earned
from the sector is increasing from time to time. Furthermore, as the country has able to
make register nine historical and natural world heritage centers by UNESCO, the hotel
and tourism sector is becoming one of the focus areas for achieving the five year GTP of
the country.
2.1.1. Justifications of the Industry:
As explained by Roe, Ashley, Page & Meyer (2004, the following points are deserving
attention for justifying what the sector for poor countries mean;
 Tourism is generally labor-intensive – although less than agriculture – and therefore
can impact on a large number of lives through the labor market;
 Tourism has considerable potential linkage, especially with agriculture and fisheries,
which can minimize the ‘leakage’ effect. Due to the high income elasticity of
demand for international tourism, it can offer a relatively rapidly growing market;
 Tourism provides opportunities for off-farm diversification, particularly in areas that
do not attract other types of development options;
 Tourism can provide poor countries with significant export opportunities where few
other options are viable;

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 It may create initial demand for a good or service that can itself develop into a growth
sector;
 Tourism products can generate demand for assets such as natural resources and
culture, to which the poor often have access;
 Tourism delivers consumers to the product rather than the other way around; and
 Infrastructure including hotels associated with tourism development can provide
essential services for local communities.
2.2. The project
The envisaged project is the development of hotel services in Gundo Meskel Town North
Shawa Dara Woreda Gundo Meskel Town The development of hotels in the country is
now gaining momentum as more focuses are being given to the sector. Beyond the
envisaged perceptions, development of standard hotel facilities in all towns of the country
in general and the region in particular would enhance the development of domestic and
foreign tourist flow in all areas of the country as the country is endowed with numerous
historical and natural tourist attraction sites.

2.2.1. Expected Standards of three Star Hotels

As a Two Star hotel is the lowest level of international standard hotel, expectations at this
level include a degree of luxury as well as quality in the furnishings, decor and
equipment, in every area of the hotel. Bedrooms will also usually offer more space than
at the lower star levels, and well designed, coordinated furnishings and decor. The en-
suite bathrooms will have both bath and fixed shower. There will be a high enough ratio
of staff to guests to provide services like porter age, 24-hour room service, laundry and
dry-cleaning. The restaurant will demonstrate a serious approach to its cuisine.

2.2.2. Required notifications in three star designated hotels

The following notifications required due attentions in Two Star designated hotels.