NATIONAL REGIONAL STATE OF TIGRAY

LUXURY RESORT AND LODGE PROPOSAL

Project consultant :Tedros Abreham

Lead consultant @kingdomnomics consulting Group
Mobile 251-989830495
Table of Contents
I. EXECUTIVE SUMMARY......................................................................................................................................3
II. BUSINESS CONCEPT..........................................................................................................................................8
III. SWOT ANALYSIS..............................................................................................................................................12
IV. MARKET ANALYSIS..........................................................................................................................................13
International Tourism Trend...............................................................................................................................13
National Trend (Ethiopia)...................................................................................................................................15
Target Market by Purpose of Visit......................................................................................................................17
Tourism Profile of Tigray and Hawzien...............................................................................................................18
Demand and Supply Analysis..............................................................................................................................22
V. MARKETING PLAN..........................................................................................................................................23
Market Segmentation and Target.......................................................................................................................23
Marketing Strategy.............................................................................................................................................24
Positioning......................................................................................................................................................25
Promotion..........................................................................................................................................................26
Pricing.................................................................................................................................................................27
VI. TECHNICAL PLAN............................................................................................................................................27
Site and Location................................................................................................................................................27
Technical and Operational Requirements for the Development of the luxury resort and lodge........................28
Overall Cost of the Investment project..............................................................................................................28
Description of the luxury resort and lodge Establishment.................................................................................30
Hotel Room....................................................................................................................................................30
Conference Center.........................................................................................................................................31
Restaurants....................................................................................................................................................31
Bars and Lounges............................................................................................................................................31
Spa and Beauty Salon.....................................................................................................................................31
Gymnasium/ Fitness Center...........................................................................................................................32
Business Center..............................................................................................................................................32
Parking............................................................................................................................................................32
VII. ORGANIZATION AND MANAGEMENT PLAN...................................................................................................33
Organizational Structure....................................................................................................................................33
 Management Team............................................................................................................................................35
Personnel Plan of The luxury Resort and lodge..................................................................................................35
VIII. FINANCIAL PLAN.............................................................................................................................................38
Start-up Summary..............................................................................................................................................39
Sales and Expenses forecast...............................................................................................................................39
Projected Financial Statements..........................................................................................................................42
A. Projected Profit/Loss (Income) Statement.................................................................................................42
Evaluation of Financial Feasibility.......................................................................................................................44
Payback Period...............................................................................................................................................44
Internal Rate of Return...................................................................................................................................44
Net Present Value...........................................................................................................................................45
IX. SOCIO-ECONOMIC CONTRIBUTION AND ENVIRONMENTAL CONSIDERATIONS.............................................46
Expected Contribution of Project to Economic Development............................................................................46
Gross Value Added (GVA) and Employment...................................................................................................46
Hospitality Investments are pro-poor.............................................................................................................46
Enhance Influx of International and Domestic Tourists..................................................................................47
Stimulate other Sectors of the Economy........................................................................................................47
Hotel Operation and Management Skill Transfer...........................................................................................48
Fuels Investment in other Business Areas......................................................................................................48
 I. EXECUTIVE SUMMARY

The Hawzien District is of a particular interest to the project promoters for several reasons. The district
is endowed with fascinating cultural, historical and natural heritages. More than 120 rock-hewn
churches and monasteries are located within 60 Kms of the site in the Hawzen, Wukro and Atsbi areas.
Most of the rock-hewn churches are located in close proximity to Hawzen District. The rock hewn
churches are similar to the world famous churches of Lalibela, but predate Lalibela churches (4-11
centuries in Tigray Vs 11-16 century in Lalibela). Most of these churches are almost a thousand years
old but still remain unexplored because they were opened to the public in the 1960s, a period in which
the state was suffering from protracted civil wars. The rock hewn churches are awe-inspiring for
tourists travelling for the purpose of learning and experiencing. The landscapes of the Gherealta
Mountains provide standalone criteria for international tourism development.

However, tourism development in the area still remains unexploited relative to its potentials. There are
several reasons explaining why the tourism potential of the Hawzen district has not been exploited. Lack
of lodging and resort services appropriate for the market has been mainly inhibiting tourism
development. Only two lodges, having a capacity 45 guest room service, are currently in operation. A
tourist can get lodging services only if he/she makes reservation 4 to 5 months ahead of his arrival. This
shows that the lodging and resort market is untouched and hence an attractive market even when one
targets existing market - retired people from Europe (mainly German, Italia and France) coming with
the purpose of cultural tourism. Beside to this there is no any luxury resort and lodges in the middle of
Hawzen District designated to exploit market opportunity by specifically serving High Net worth
Individuals (HNWI).

Thus, investor Yodit Ekuland an Ethio -American nationality with profound experience of international
hospitality sector and high financial capability saw the business opportunity to develop a luxury resort
and lodge in Gherealta Hawzien district with overall investment cost of USD8,444,035million. The
luxury resort and lodge establishment requires 50,000 m2 and will host 65 lodges’ ranges from 40-140
M2 size each. The remaining land will be used to develop the proposed extra amenities.

PRODUCT DESCRIPTION

The luxury resort and Lodge will be developed in the surrounding of the project site encircling the extra
amenities. Lodges are designed to reflect the local housing traditions with significant functional design
improvements. The proposed lodges will be constructed with local materials of high aesthetic features.
Each lodge will have an option also to provide a separate slaughtering and food preparation unit for
the customer to prepare his/her own food and/or specially trained chefs will be assigned in the
customer’s choosing.

A select-service, upscale lodge in this location will offer a balanced amount of modern and
technologically advanced meeting space. The conference center will be small sized serving utmost 30
people at a time to avoid unduly disturbances potentially associated with serving too many people. The
property will offer recreational amenities for this market and select-service product type, including an
exercise room, swimming pool, water bodies and horse racing services. Additional amenities will
include children playing ground, business center, a market pantry, a guest laundry facility, wireless
internet access in the public areas and its own landing facilities for helicopter and private aeroplanes.
FINANCIAL FEASIBILITY

The evaluation of the financial feasibility of the hotel investment project indicates that the project has a
Payback period of 4 years, a Net Present Value (NPV) of USD$22,185,412.17, and an Internal Rate of
Return (IRR) of 50 %. The investment project found to be acceptable if it is evaluated independently,
because it’s payback period is less than the maximum expected payback period( which is 10 years), the
NPV is greater than Zero with higher positive figure, and the IRR is also greater than the cost of
capital(10% to the nearest 1%).

Socio-Economic benefit

Implementing this investment project has a long lasting impact on the socio-economic conditions of the
local, regional and national communities. The expected contribution of the project to economic
development is briefly described as follows.

Gross Value Added (GVA) and Employment

The GVA, also known as the localized gross domestic product (GDP), is a measure of the value of goods
and services produced in an area, industry or sector of the economy. It takes into account the following:

• Net profits;

• Depreciation; and

• Salaries and wages.

The GVA is an indication of the economic activity that can take place in a certain geographical area,
brought about by the establishment or operation of a venture. GVA is calculated by adding the average
annual net profit, depreciation and salary spend. The GVA for this project is expected to average at
USD $37,818,997.31.

Based on the number of people needed to operate the operations, management and support staff, the
project could yield 77 direct job opportunities. In addition, the impact multiplier for jobs in the Agro
processing sector is 1.3 – therefore, in addition to the direct jobs created, this project could contribute
to the livelihoods of 231 people.

Hospitality Investments are pro-poor

Investments in hotels and hospitability sector are usually pro-poor and help local community to directly
benefit from the investment. Tourists staying in the hotel usually spend money on beverages and foods
the source of which is usually local farmers and business owners. Farmers will be involved in the supply
of animal products and crops and vegetables to be consumed by customers of the proposed property.

Some 30 to 40 percent of the food and beverage spending of the tourist goes directly to the farmer and
businesses involved in the food and beverage supply chain. This indicates that the project will generate
an income of USD 672,120.00 to farmers and small scale business operating in the location of the
subject property. Besides, around 5 local cooperatives and small scale enterprises will be organized not
only supply of sheep or goats, quality honey, handmade souvenir and garments but also to supply their
products to the Middle East markets through the technical and managerial support of the proposed
property. This will further enhance the economic vitality of farmers and generation of hard currency to
the region and the country. As such, the project will have significant contribution in building strong and
resilient local community. Needless to say, this will definitely play a catalyst role as an incentive to
enhance productivity and production at local and regional level.

Enhance Influx of International and Domestic Tourists

It is obvious that the presence and/or absence of quality lodging facility significantly affects the flow of
tourists to a given destination site. The destination site does not have any luxury lodging facility to
accommodate lodging service needs of not only to high profile tourists but also to the needs of the
average tourist. This has been one of the major bottlenecks to the flow of tourists to this historically
valuable destination site. The subject property will be developed in such a way that it will be a
destination site in its own right. The subject property development concept together with the historical
site will induce demand and hence, increase the influx of a new target markets which categorized as
high wealth networking individuals. To this end, the project will contribute to the generation of hard
currency and incomes of the local community.

Stimulate other Sectors of the Economy

Investment projects on lodging and hospitability sectors are well known for their role in stimulating
other sectors of an economy. Construction, transportation and agriculture sectors, to say the least, are
some of the sectors favorably affected by investment projects of this kind. Hence, the subject property
will contribute significantly to boosting the construction, transportation and agriculture sectors of the
region as well as the locality. No doubt, these sectors will contribute to employment generation and to
improved standard of living of citizens.

Hotel Operation and Management Skill Transfer

One of the key exogenesis to the tourism development in the Tigray State in particular and Ethiopia in
general is lack of qualified technical and managerial human capital. To redress this challenge, the
proposed property’s service delivery and day-to-day operations will be handled by reputable foreign
based hotel management companies in the form of management contract for 5 years period.

The management contract will contain terms and conditions explicitly dictating the company of its
obligation to train and certify local technical and managerial staffs. This approach to human capital
accumulation will address the skill and knowledge gaps rampant in the tourism and hospitability sector.

II. BUSINESS CONCEPT

Tigray is endowed with beautiful landscapes and historical values of unparalleled beauty, good nurtured
and hospitable people, who are proud of their culture and heritage deeply anchored in their great history.
In fulfilling the aspirations of the people of Tigray for overall socio-economic development multi-sector
development strategies have been implemented so as to effectively exploit region’s economic potential.
Effective use of Tigray’s economic potential is essential for its people and for a strong Ethiopia, which
itself is a pillar to wider regional and African renaissance. This can materialize only if the benefits of
economic development and the region’s resources can be sustainably exploited.

The Hawzien District is of a particular interest to the project promoters for several reasons. The district
is endowed with fascinating cultural, historical and natural heritages. More than 120 rock-hewn
churches and monasteries are located within 60 Kms of the site in the Hawzen, Wukro and Atsbi areas.
Most of the rock-hewn churches are located in close proximity to Hawzen District. The rock hewn
churches are similar to the world famous churches of Lalibela, but predate Lalibela churches (4-11
centuries in Tigray Vs 11-16 century in Lalibela). Most of these churches are almost a thousand years
old but still remain unexplored because they were opened to the public in the 1960s, a period in which
the state was suffering from protracted civil wars. The rock hewn churches are awe-inspiring for
tourists travelling for the purpose of learning and experiencing. The landscapes of the Gherealta
Mountains provide standalone criteria for international tourism development.

However, tourism development in the area still remains unexploited relative to its potentials. The
overwhelming numbers of tourists coming to Ethiopia are cultural tourists traveling for the purpose of
learning and experience. The share of Hawzen district from the national market is insignificant
compared to the diversity and magnitude of destination sites, which outshine other destinations sites of
the country. The market is untapped and hence, offers lucrative investment opportunity for alert
entrepreneurial businesses.

Moreover, these sites are ideal sites for a curios tourist who is interested in adventure tourism. Here
under is a quote by an international tourist that succinctly reflects the untapped potential for adventure
tourism development in the Hawzen District:

The rock curved churches are at the top of this mountain, looking at the other tourist, which
appear as small dot on the vertical wall of the mountain, I wonder what might have
prompted to build two monolithic churches in a place where there should be only eagles and
goats.

There are several reasons explaining why the tourism potential of the Hawzen district has not been
exploited. Lack of lodging and resort services appropriate for the market has been mainly inhibiting
tourism development. Only two lodges, having a capacity 45 guest room service, are currently in
operation. A tourist can get lodging services only if he/she makes reservation 4 to 5 months ahead of his
arrival. This shows that the lodging and resort market is untouched and hence an attractive market even
when one targets existing market - retired people from Europe (mainly German, Italia and France)
coming with the purpose of cultural tourism.

This project envisions developing luxury lodges in the middle of Hawzen District to exploit market
opportunity by specifically serving High Net worth Individuals (HNWI). Recently, the site was visited
by world’s prominent personalities, including former president of United States of America, Gorge W
Bush, a popular Artist Will Smith and New Zealand’s prime minster, just to mention, among the High
Net Worth individuals. The worldwide luxury market was estimated at €1 trillion in 2016, with an
average annual growth of 4%. Over a six-year period (2010-2016), the number of High Net worth
Individuals (HNWI) grew by 52% whose wealth increased by 49%.

The proposed property will be developed at the center of Gheralta Mountains. The lodging facility will
be located at a plain area surrounded by hills featured by impressive nature of modest scenery, which
places the customer in a tranquil state. The proposed property will be situated away from the main high
way avoiding traffic noises and disturbances lending itself for quieter lodging environment. The weather
conditions of the location of the property are moderate throughout the year providing the international
tourist with conducive and favorable weather conditions. The weather condition is particularly highly
esteemed by the international tourist who travels across the globe to escape extreme weather conditions
occurring seasonally in their home countries.

Lodges will be developed in the surrounding of the project site encircling the extra amenities. Lodges
are designed to reflect the local housing traditions with significant functional design improvements. The
proposed lodges will be constructed with local materials of high aesthetic features.

The lodges will have one dining room and dairy farming unit. The dairy farming unit is unique and the
first of its kind offering the customer with a unique opportunity to feed and manage livestock to produce
and use fresh milks on daily basis. In case, the customer does not have milking skills or is not interested
to perform the task, specially trained professional will be assigned. As a result, customers will feel
relaxed and relieved from noisy and stressful urban modes of living. Each lodge will have an option also
to provide a separate slaughtering and food preparation unit for the customer to prepare his/her own food
and/or specially trained chefs will be assigned in the customer’s choosing.

A select-service, upscale lodge in this location will offer a balanced amount of modern and
technologically advanced meeting space. The conference center will be small sized serving utmost 15
people at a time to avoid unduly disturbances potentially associated with serving too many people. The
property will offer recreational amenities for this market and select-service product type, including an
exercise room, swimming pool, water bodies and horse racing services. Additional amenities will
include children playing ground, business center, a market pantry, a guest laundry facility, and wireless
internet access in the public areas.

The property will be developed in 50 hectares and will host 65 lodges’ ranges from 40-140 M 2 size each.
The remaining land will be used to develop the proposed extra amenities.
Currently the Gheralta Rock hewn churches core attraction are began to influence the travel decision of
High Net worth Individuals (HNWI) .Recently the site is visited by world prominent personalities a late
president of United states of America W.BUSH, a popular Artist Willy SMITH, Newzland prime
minster among prominent personalities which recently visited the region. But there is no appropriate
luxury hospitalities that much the needs of them.

The promoters of the project are highly interested on the high net worth individuals as the target of the
project and the region .The worldwide luxury market was estimated at €1 trillion in 2016, with an
average annual growth of 4%. Over a six-year period (2010-2016), High Net worth Individuals (HNWI)
grew in number by 52%, in addition to their wealth, which increased by 49%. The Asian and North
America regions are primary drivers of the growth.

In addition to the luxury market and customer base growth, the world has changed, and the pace of
change is continuing to grow. In the previous period luxury travel has been growing faster (+4.5%) than
overall travel(+4,25%) and the forecasted growth rate of luxury travel is also higher (+6,2%) than
overall travel (+4,8%). .

With deep understanding of the Gap for both the actual and the potential target markets to the region
mainly the high net worth individuals , we decided to establish a new luxury hospitality that
accommodate the interest of the demonstrated and potential target markets in the region

Our New Branded Luxury in Hospitality’ in Gherealta will guide with Business concept of the traveler
is seeking a more transformative and soul-enriching experience and all of product development package
will focus on realizing the emotional impact on guests

Hence we propose to develop a new Branded Luxury resort and lodge (45-65 rooms), convenient located
to have direct access to the Attractions nearby the rock hewn churches around Gherealta .it will offer a
luxury and relaxing environment for not only international tourist but also for the local people looking
for a nice place to spend the weekends or short vacations (e.g. summer school vacations, carnival, etc.)

Also, it is expected that it will offer to our customer excellent facilities to host special events as
seminars, weddings, private parties, etc. Also, it will include a SPA and outdoor package activities for
those tourists looking for a place to relax and invest some money in their physical and spiritual treatment
(e.g. engaging on outdoor games, Hiking, trekking, horse riding and presenting physically on church
ceremonies, and others.)Differentiating the type of business service offered, from that of the
competition, will assist not only in building the lodge & Resort brand as a whole, but will attract a
frequent business traveler, who requires a higher level of personal service and recognition.

III. SWOT ANALYSIS

On the following analysis we will highlight the internal strengths and weaknesses of ours and the
existing opportunities and threats we expect to establish luxury hospitality in Gheralta region.
Opportunities
Strengths :
 having strategy for positioning  Market: High demand for Gheralta Tourism
products
 our financial strength to finance the
whole project independently  Competitors: no direct competition exists at present,
in terms delivery luxury hospitality in the region
 we are free of depending for hard
currency from Ethiopian Government  Suppliers & Staff: Supplies (materials) and Staff
(Personnel) required to run the facilities could be
 our strong network relationship with obtained from the local market
VIPs and high net worth individuals
over all the world  Guest Dependency: repeat corporate business based
on personal service and quality, in luxurious resort
 similar experience in managing luxury and lodge environment.
hospitality
 Weaknesses Threats

 Staff: Availability of Trained staff around the  Market Entry: potential for a competitive, global
project site brand to enter the market with a similar product.

 Substitutes: fully furnished and serviced business

modern hotels offering lower daily rates.

IV. MARKET ANALYSIS

International Tourism Trend

According to UNWTO report for 2016, tourism has experienced continued expansion and
diversification to become one of the largest and fastest-growing economic sectors in the world over the
past six decades. Many new destinations have emerged in addition to the traditional favorites of Europe
and North America. Tourism has boasted virtually uninterrupted growth over time, despite occasional
shocks, demonstrating the sector’s strength and resilience.
International tourist arrivals have increased from 25 million globally in 1950 to 278 million in 1980, 674
million in 2000, and 1186 million in 2015. Likewise, international tourism receipts earned by
destinations worldwide have surged from US$ 2 billion in 1950 to US$ 104 billion in 1980, US$ 495
billion in 2000, and US$ 1260 billion in 2015. Tourism is a major category of international trade in
services. In addition to receipts earned in destinations, international tourism also generated US$ 211
billion in exports through international passenger transport services rendered to non-residents in 2015,
bringing the total value of tourism exports up to US$ 1.5 trillion, or US$ 4 billion a day on average.
International tourism now represents 7% of the world’s exports in goods and services, up from 6% in
2014, as tourism has grown faster than world trade over the past four years. As a worldwide export
category, tourism ranks third after fuels and chemicals and ahead of food and automotive products. In
many developing countries, tourism ranks as the first export sector (UNWTP, 2016, pp.2).
Tourism can be an engine of growth capable of dynamiting and rejuvenating other sectors of the
economy provided that it is properly organized and developed. Considering the following notable facts,
tourists are traveling around the world to visit some exotic places; to see different cultures and to enjoy
the varied climate and natural attractions of the world.

Tourism is a large contributor to worldwide economic activity, growing at a slightly faster pace than the
world economy. Though there are important differences between countries, it is clear that tourism has a
crucial role in supporting growth, development, and employment generation.

The number of international tourist arrivals (overnight visitors) in 2015 increased by 4.6% to reach a
total of 1186 million worldwide, an increase of 52 million over the previous year. It was the sixth
consecutive year of above-average growth in international tourism following the 2009 global economic
crisis. Tourism flows were influenced by three major factors in 2015: the unusually strong exchange rate
fluctuations, the decline in the price of oil and other commodities, and increased global concern about
safety and security.

By UNWTO region, the Americas and Asia and the Pacific both recorded close to 6% growth in
international tourist arrivals, with Europe, the world’s most visited region, recording 5%. Arrivals in the
Middle East increased by 2%, while in Africa they declined by 3%, mostly due to weak results in North
Africa. International tourism receipts grew by 4.4% in real terms (taking into account exchange rate
fluctuations and inflation) with total earnings in the destinations estimated at US$ 1260 billion
worldwide in 2015 (euro 1136 billion).

France, the United States, Spain and China continued to top the rankings in both international arrivals
and receipts. In receipts, Thailand climbed three places to 6th position, and Hong Kong (China) climbed
one place to 9th. Mexico moved up one position to come 9th in arrivals. China, the United States and
the United Kingdom led outbound tourism in their respective regions in 2015, fuelled by strong
currencies and economies. Forecasts prepared by UNWTO in January 2016 point to a continuation of
growth in international tourist arrivals at a rate of between 3.5% and 4.5% in 2016, in line with the
Tourism Towards 2030 long-term projection of 3.8% growth a year for the period 2010 to 2020.

International tourist arrivals worldwide are expected to increase by 3.3% a year between 2010 and 2030
to reach 1.8 billion by 2030, according to UNWTO’s long-term forecast report Tourism Towards 2030.
Between 2010 and 2030, arrivals in emerging destinations (+4.4% a year) are expected to increase at
twice the rate of those in advanced economies (+2.2% a year). The market share of emerging economies
increased from 30% in 1980 to 45% in 2015, and is expected to reach 57% by 2030, equivalent to over 1
billion international tourist arrivals (UNWTO, 2016 pp.2-4).

The worldwide luxury market was estimated at €1 trillion in 2016, with an average annual growth of
4%. Over a six-year period (2010-2016), the number of High Net worth Individuals (HNWI) grew by
52% whose wealth increased by 49%. The Asian and North America regions are primary drivers of the
growth.

In the previous period luxury travel has been growing faster (+4, 5%) than overall travel (+4.25%) and
the forecasted growth rate of luxury travel is also higher (+6.2%) than overall travel (+4.8%). This
growth has been followed by an increase in competition, due to both an increase in the number of luxury
properties as well as improvements in the service delivery to luxury guests in existing operations.

National Trend (Ethiopia)

Ethiopia is home to magnificent cultural, natural and archeological tourism attraction sites. Ethiopia’s
bounty of heritage sites has drawn adventure and beauty seekers, but only recently, it appears, is the
country taking its rightful place. The country is voted the world’s top tourism destination of 2015 for its
“excellent preservation of humanity landmarks” by the European Council on Tourism and Trade.

No surprise, Ethiopia’s tourism has been exploding since 2005 both in terms of international tourist
arrivals and tourism receipt. International tourist arrival to Ethiopia has grown by three fold from
227,000 in 2005 to 681,000 in 2013. Similarly, Tourism receipts have almost quadrupled during this
period. Yet, the market share of Ethiopia is small compared even to Africa countries, and ranks 12 th and
10th respectively in terms of tourist arrival and receipts. Tanzania, Kenya and Uganda have larger
market shares in East Africa.

Table 1: International and local tourists visit Ethiopia

Year Tourist
Arrival
2000 136,000

2001 148,400

2002 156,300

2003 179,900

2004 184,300

2005 227,400

2006 330,000

2007 357,800

2008 383,400

2009 427,300

2010 468,300

2011 523,400

2012 596,400

2013 681,200
 2014 770,400

2015 863,700

Likewise, the average receipt per tourist was estimated to be approximately US$900; which places
Ethiopia in the ‘average’ yield category along with Uganda, Reunion and South Africa but above the
lower yield destinations like Mozambique, Kenya, Zimbabwe, Tunisia, etc. However, Ethiopia’s per
tourist receipt compared to Tanzania, Seychelles and Mauritius (which earn around US$1,500 and more
per visitor) is still significantly low.

Considering the current average receipt per tourist, Ethiopia generates USD 777,300,000 from its
tourism sector. As such, the sector has immense potential in generating foreign exchange and in
accelerating the pace of the nation’s overall socio-economic development. Consequently, the
government of Ethiopia has been investing considerable share of its national resources to the
development of the tourism sector and renewed its commitment to enhance tourism competitiveness
over the coming decades.

Consequently, national and regional tourism marketing strategy was crafted in realizing the vision of
placing Ethiopia among five top tourist destinations in Africa by 2025. With this strategy, the total
number of tourists will reach 3 million while the total receipt is estimated to reach US$ 3.4 billion by the
end of this strategic period. Of little surprise, this will have sustainable and positive impact on Ethiopia’s
economy, its socio-cultural and environmental landscapes.

As part of the overall strategy, Ethiopia’s brand of “the 13 months of sun shine” is replaced by the
“Land of Origins” which conceptualizes Ethiopia’s sources of many ‘origins’ that are scattered all over
the nation. It is the origin of humanity, global coffee culture, Aksumite civilization and unique language
etc. These justify a differentiated marketing position strategy. Following this marketing foundation the
Ethiopian government has committed marketing resources of different magnitude to different markets
according to their revenue potentials. Bearing this in mind, the government identified three target market
segments on the basis of traveler type namely: Segments to Embrace, Segments to develop and segments
to leverage.

The strategy by which Ethiopia aspires to realize its vision will be executed through a portfolio of five
programs. This policy direction offers lucrative opportunity not only for improving Ethiopia’s tourism,
and hence, its contribution to the overall economy but also to individual businesses operating in the
sector. This bold move cannot be materialized through government programs and initiatives only. The
private sector and other stakeholders are expected to play exemplary role both in stimulating the sector
and reaping the concomitant opportunities by putting everything on the table ahead of time.

Target Market by Purpose of Visit

International tourists arriving in Ethiopia within the core market differ by the purpose of their visit. The
main purposes of their visit include business, conference, leisure & holiday, transit, visiting relatives and
friends (VRF) and unknown. In 2012 the majority (45%) of the tourists arrive in Ethiopia for leisure &
holiday purpose followed by tourists coming to Ethiopia for business purposes (21%). Further, the
tourists arriving for conference and visiting relative & friends purposes account for 5% and 10%
respectively. Finally, tourists arriving for transit and unknown purposes in 2012 represent 8% and 11%
respectively. The share of arrival is summarized in the following chart:

Core Market by Purpose of Visit(2012)

Business

11% Conference
21%
10% Liesure & holyday

5% Transit
8%
VRF
NS

44%

Tourism Profile of Tigray and Hawzien

Tigray is cradle of civilizations with numerous contributions to the foundation of Ethiopia. The Da’mat
Kingdom dated back to 900BC being the oldest once succeeded by the Axumite Empire, which was one
of the famous Empires in its high-day. As result of the cultural dynamics during its long history the
region is home to varied cultural heritages comprising ancient archeological sites, rock arts, built
churches, rock-hewn churches, mosques and Derih- Muslim tombs, and ancient monuments.

Moreover, Tigray region has a rich intangible cultural heritage, including its own distinct language -
Tigrinya - directly descended from Ge’ez, the language of the Axumite Empire and still the liturgical
language of the Ethiopian Orthodox Church. Culture is also expressed in music and dance, which both
feature in the Ashenda festival - a 3-day festival for girls, and the Hoye festival, a youth festival which
coincides with Mesqel, two of the most important traditional festivals in Tigray, as well as in traditional
handicrafts, of which leather craft, pottery and weaving are amongst the most important.

It is not only the churches themselves which are major heritage assets, but also their contents, which
include objects as old as the structures themselves, represented by manuscripts, icons and different kinds
of liturgical objects, such as crosses, censors, crowns, liturgical fans, vestments, makomyas, drums,
lyres, sistra , and so on.

Regardless of its rich tourism endowments, Tigray is still behind Addis Ababa, Amhara, Harar, Oromia,
and SNNPR in terms of tourist arrival and receipt. Tigray has attracted 62,972 international tourists and
generated USD 86.9 million receipts in 2008 E.C. According to the Tigray Tourism Marketing Strategy
for 2016-2020, there is no doubt that Tigray has substantial tourism growth potential given the region’s
rich history and the many cultural and outdoor opportunities on offer.

Table 3 below shows that the number of international and local tourist flow to the Tigray region and
amount of income earned from the sector in the past ten years increases from year to year. In 2003, the
number of international and local tourists visited the region were 9,666 and 14,366 respectively and
these number is significantly increased to 32,343 and 41,930 respectively in 2014. Income from the
sector is also raised from 3.2 million USD in 2003 to 12.34 million USD in 2014. It is obviously
believed that the demand of service facilities for tourists also significantly increased in all rounds.

Table 2: International and local tourists visit Tigray and income (million USD)
 Year International Local tourists Income
tourists Million USD
2003 9666 14366 3.2

2004 13857 15709 4.6

2005 14689 12604 4.75

2006 15662 17991 4.99

2007 17740 22548 6.74

2008 20319 37148 8.43

2009 22293 29411 8.33

2010 24303 31915 9.13

2011 26313 34419 9.94

2012 28323 36923 10.74

2013 30333 39426 11.54

2014 32343 41930 12.34

Total 255841 334391 94.73

Source: Tigray Culture and Tourism Bureau, 2009 E.C.

Hawzen area congregates more than 120 most beautiful rock-hewn churches and monasteries within 20-
30 Kms. The rock hewn churches are similar to the world famous churches of Lalibela, but predate
Lalibela churches (4-11 centuries in Tigray Vs 11-16 century in Lalibela). These ancient churches
curved in the Gheralta Mountains adorned by classic paintings, and host several religious and secular
books and artifacts that withstood the test of time. The rock hewn churches offer rich learning
experiences for the curios international and domestic tourist traveling as cultural tourist. The soul
enriching landscapes featuring an amazing sun set nourishes the tourist emotionally, physically and
mentally. Some of the most beautiful medieval Churches on impressive viewpoints are Abuna Yemata
Guh, Debre Maryam Korkor or Abreha-Atsheba churches.

These sites are ideal sites for a curios tourist interested in adventure tourism. Here under is a quote, by
an international tourist, that succinctly reflects the untapped potential for adventure tourism
development in the Mekelle region:
 The rock curved churches are at the top of this mountain, looking at the other tourist, which
appear as small dot on the vertical wall of the mountain, I wonder what might have
prompted to build two monolithic churches in a place where there should be only eagles and
goats.

Hawzen region has high potential as a hub for ecotourism due to pleasant natural conditions, easy access
to the most fascinating historic, religious and natural beauty sites of Tigray and Afar States. By the
virtue of its location, Hawzien town is most accessible to the vast majority of tourist attraction places in
the region including Aksum and Yiha. The Hawzen region has a very convenient climate, nature
conditions and landscape for the development of ecotourism. Hawzien is connected by air through
Mekelles international airport, connected to Addis Ababa and other cities through daily flights. It has
also very good road network with other cities and nearby attractions.

Table 3: Accessibility of major tourist attraction places from Hawzien

No Name of the place Distance from Hawzien in Description

Km

1 Teklehaimanot 0.00 Rock-hewn church

2 Geralta mountains 9.00 Chain mountains

3 Debre Mariam Korkor 9.00 Rock-hewn church

4 Dugum Selassie 18.00 Rock-hewn church

5 Debretsion 20.00 Rock-hewn church

6 Abune Me’anta 14.00 Rock-hewn church

7 Abreha Atsbeha 33.00 Rock-hewn church

8 Abune Gebremichael 25.00 Rock-hewn church

 9 Giorgis maikado 5.00 Rock-hewn church

10 Eyesus Gwahgot 21.00 Rock-hewn church

11 Mariam Bahra 21.00 Rock-hewn church

12 Mariam Bezuhan 21.5 Rock-hewn church

13 Mariam Kiat 22.00 Rock-hewn church

14 Wukro Cherkos 22.00 Rock-hewn church

15 M/alem Adikesho 24.00 Rock-hewn church

16 Mikael Imba 27.00 Rock-hewn church

17 Negash Mosque 31.00 Ethiopia’s earliest and most holy center

18 Michael Barka 33.00 Rock-hewn church

19 Michael Debreselam 34.60 Rock-hewn church

20 Zarema Giorgis 36.00 Built up church

21 Petros and Paulos 37.00 Cave Church

22 Gunda gundo Monastery 65.00 Built up church

23 Debredamo 78.00 Found perched on sheer-sided plateau

24 Yeha 95.00 Century’s old building

25 Aksum 125.00 Cradle of Ethiopian ancient civilization

Source: Own compiled data

Table 4 below shows that the number of international and local tourist flow to the Hawzien district and
amount of income earned from the sector in the past ten years increases from year to year. In 2003, the
number of international and local tourists visited the region were 2900and 2873 respectively and these
number is significantly increased to 4157and3142 respectively in 2014. Income from the sector is also
raised from 0.80USD in 2003 to 1.15 million USD in 2014. It is obviously believed that the demand of
service facilities for tourists also significantly increased in all rounds.
Table 4: International and local tourists visit Hawzien and income (million USD)

Year International tourists Local tourists Income

Million USD

2003 2900 2873 0.80

2004 4157 3142 1.15

2005 4407 2521 1.19

2006 4699 3598 1.25

2007 5322 4510 1.69

2008 6096 7430 2.11

2009 6688 5882 2.08

2010 7291 6383 2.28

2011 7894 6884 2.49

2012 8497 7385 2.69

2013 9100 7885 2.89

2014 9703 8386 3.09

Total 76752 66878 23.68

Source: Tigray Culture and Tourism Agency

Demand and Supply Analysis

The stoke take of the supply side of hospitality and accommodation sector in Hawzien region indicates
gap in terms of quantity and quality. According to the Regional Culture and Bureau, there are only 2 star
designated hotels (Lodges) in Hawzien with 65 bed rooms.

Table 5: Number of Star Designated Hotels and Bed rooms in Hawzien

Hotel Name Number of standard Multipurpose hall Recreation center

rooms and other facilities

Gheralta Lodge 25 Not available Available

Korkor Lodge 10 Not available Available

Gheralta Pension 6 Not available Not available

 Tourist Hotel 8 Not available Not available

Adulis Hotel 17 Not available Not available

Fitsum Girmay Hotel 7 Not available Not available

Vision Motel 14 Not available Not available

Total 87

Sources: Own compilation 2019.

In Hawzien town there are a total of about 87 bed rooms in lodges and hotels. Nevertheless, except in
Gheralta and Korkor lodges all other hotels have not recreation center.

Thus, absence of luxury hospitality and facilities for visitors and tourists on one hand and presence of
adequate potential market for the luxury Resort and lodge on the other hand inspired the promoter of this
project to invest in the Resort and Lodge hospitability. Its establishment plans to provide level best
luxury international service to visitors and local guests will have also positive impact on the
neighborhood by initiating complementary businesses and attractive visit and business.

V. MARKETING PLAN
Market Segmentation and Target
The proposed subject property will offer high quality services with combination of luxury
accommodation, diversified international and national menu, entertainment, fitness and health, and
conference facilities. Accordingly we propose to develop a new Branded Luxury resort and lodge (45-65
rooms), convenient located to have direct access to the Attractions nearby the rock hewn churches
around Gherealta .it will offer a luxury and relaxing environment for not only international tourist but
also for the local people looking for a nice place to spend the weekends or short vacations (e.g. summer
school vacations, carnival, etc.)

Also, it is expected that it will offer to our customer excellent facilities to host special events as
seminars, weddings, private parties, etc. Also, it will include a SPA and outdoor package activities for
those tourists looking for a place to relax and invest some money in their physical and spiritual treatment
(e.g. engaging on outdoor games, Hiking, trekking, horse riding and presenting physically on church
ceremonies, and others.)Differentiating the type of business service offered, from that of the
competition, will assist not only in building the lodge & Resort brand as a whole, but will attract a
frequent business traveler, who requires a higher level of personal service and recognition.

The general Target Markets for this luxury resort and lodges are three main groups of tourists coming to
Hawzien for non-business purpose. The first group is retired people from Europe (mainly German, Italia
and France) coming with the purpose of cultural tourism. This group of visitors is very price sensitive
whose main purchasing criteria are moderate accommodation cost and high level of services provided.
The second group of visitors is expatriate population coming from Addis Ababa for weekend or short
vacations. However from our study we observed that the demand and supply gap interims of quantity
and quality. Beside to the demonstrated target market, the promoters of the project are highly interested
to include the high net worth individuals as the third target market of the region.

Marketing Strategy
The proposed subject property will design and implement carefully its marketing strategy to penetrate
the untapped market for star level and high end accommodation and build reputation through
appropriate marketing mix or 4p’s and a new insight for luxury resort (positioning, product, promotion,
and pricing) based on the market analysis.

Table 4: plan to deliver luxury resort

Our strategic focus
 Core brand  we defined our resort and lodge as luxury for leisure ,holiday and retreat escape in historical
values and stories place
 so everything in design, service and communication will relate with the interests of target
customers and integrated with Historical values and stories of the

Gourmet  Our luxury resort will give high emphasis for food and Beverage.
 beyond the regular kitchen and Restaurant service it will have a space for customers to
enrich their experiences as well as their special needs by them selves

Purpose and  Our marketing strategy will give high emphasis for determine of expectation of the
deeper meaning targeted customers.
 Based on this beside to the normal lodging services we will develop transformative
objectives within each of the customer segments and integrate emotional triggers within the
customer journey

service  we will give high emphasis to educate ,support and motivate the staff since they are the
critical ones to build experiences to customers
 we will train, support and motivate the local community around our property to be part of
the experience builder to targeted customers

Positioning
The subject property will establish its positioning strategy on strength, opportunities, weakness and
threat analysis. The strong management experience of the project promoter as corporate business will be
exploited to create strong management and motivated staff that can provide customer oriented
products/services and easily position the hotel establishment of in the market. The management and staff
shall work on the identified target markets (high net worth individuals for luxury retreat, International
and domestic leisure tourist, business travellers and conference) to position as modern, quality and

affordable products/services provider Product

The proposed luxury and resort, as a new entrant to the hospitality will develop its products/services
based on Ethiopian Standards ES 3808-1:2014 for HOTELS – GRADING REQUIREMENTS AND
CLASSIFICATION to international, African and National standards for luxury resort and lodge.
 Promotion
The 3 star hotel will design, develop and implement comprehensive promotion package to promote its
products/services as single brand identity. The promotion package will be a combination of brand &
logo, resort and lodge website, printed materials, audio-video materials, packaging materials, bill boards,
light boxes, signage, giveaways, tags, broachers, leaflets, folders, business cards, stickers and so on. The
brand and logo will be implemented on all products/services lines where it is applicable. These
promotional packages will be communicated through different promotional methods, namely;
advertising, personal selling, direct marketing, and digital marketing among others.

A. Advertising: This comprises advertising in print Medias, TV channels, on permanent screens like
airport and Radio stations. The print media shall be undertaken through trade and industry publications
like business magazines. Both national and private TV channels and radio stations will be used for
advertising products/services of the hotel.

B. Personal Selling: Undoubtedly customer solicitation face-to-face will be a powerful form of

promotion mainly due to the fact that its flexibility will enable the business to match the customer's
needs to specific attributes of its services as well as giving concise details of what it has to offer.
Another important determinant in utilizing personal selling is the fact that the business is relatively new
on the market. As such, potential customers/clients will, to a certain degree, be skeptical towards the
intended service(s) and how they are able to benefit from the service that the business will provide.

In cases where the opportunity of obtaining a large order exists it may be necessary for the top
management to go out personally, especially considering the fact that the business is still a relatively
new firm on the market. However this shall be the situation in the majority of cases due to our relative
infancy.

C. Direct Marketing: This will be used but only to a limited extent in the form of telemarketing and
informing potential customers and obtaining referrals where possible. In the case of telemarketing it will
involve the business’ target potential customers of its services and informing them of its existence and
destinations. It may then arrange for an appointment with the respective decision-maker, with the
intention being to lure them into utilizing of the services. In this case, the business will employ direct
mail and telephone sales.
D. Digital Marketing: The increasing growth of the internet as an information source provides an
opportunity for the hospitality business. This is particularly in view of the increasing dissemination of
information over the World Wide Web, as individuals and groups look at obtaining the best deal
possible. More often individuals and groups seek out information over the internet due to its relatively
low cost and ease of use helping to minimize time wasting. In doing so, the hotel will develop its own
website to promote itself worldwide. However this will require adequate planning so as to ensure that
all information on the website is accurate and up-to-date, ensuring it markets in a professional image.
This will mainly serve foreign tourists and other interested stakeholders.

In all the above, the hotel establishment intends to communicate its ability to deliver a quality product/
service that will satisfy the customers’ needs. Hence our messages will influence the engagement
decision of prospective customers by emphasizing our customer focus and, persuade prospective clients
that it is different from its competitors.

Pricing
Products/services of the proposed hotel will be competitively priced in relation to the dictates of the
market. It is intended to implement market based (demand based) pricing strategy which will ensure that
potential customers are not frightened away by the price. However this will dictate that the costs are
prudently kept so as to ensure the financial goals are realized.

VI. TECHNICAL PLAN

Site and Location
The subject property is proposed to be built in the land close to the awful landscape of Gherealta in a
particular place of Qorqor which currently owned by youths though the land is not right place to grow
crops. The proposed site to establish the luxury resort and lodge will be on 5 hectare with direct access
to first grade road of Hawzien and Wukro.

Technical and Operational Requirements for the Development of the

luxury resort and lodge
Development of the luxury resort and lodge Hotel Establishment will consider Ethiopian Standards
HOTELS – GRADING REQUIREMENTS AND CLASSIFICATION approved by Ethiopian
Standards Agency, and has been implemented by Ministry Culture and Tourism since 2015 in addition
to Ethiopian Building Code Standards (EBCS’s).Detail criteria and requirements of Ethiopian Standards
HOTELS – GRADING REQUIREMENTS AND CLASSIFICATION for luxury lodge star is adopted.

Overall Cost of the Investment project

The overall investment cost of luxury resort and lodge project is USD 8,503,243.55 and the whole cost
investment to be financed from owners’ equity. As indicated in the Table below the Overall
Investment Cost is composed of land rent cost, building cost, fixture, equipment, furniture and facilities
installation cost, and pre-opening and stat-up operational cost of the business

Table 5: Overall Investment Cost of the project

Building and civil work

Land rent cost-first payment $ 4,166.00

Feasibility Study & Consultancy &Architectural design $ 138,994.80

 Building construction including finishing cost and Landscaping and greenery cost $ 6,949,740.00

Subtotal $ 7,092,900.80

Fixtures, Equipment, Furniture, and Facilities Installation cost

Hotel Rooms equipment, fixture and furniture $ 100,000.00

Conference equipment and facilities $ 33,333.33

Kitchen equipment, cabinets and utensils $ 76,666.67

Gymnasium appliances $ 133,333.33

Beauty salon appliances $ 50,000.00

Motor Vehicles $ 83,333.33

Parking appliances and facilities $ 26,666.67

Safety and security system installation $ 50,000.00

Central Boiling system $ 50,000.00

Subtotal $ 603,333.33

Total Pre-opening and Start-up operation cost $ 807,009.41

Total Investment Cost $ 8,503,243.55

Own Equity (100%)

Bank Loan (0%)

Description of the luxury resort and lodge Establishment

The luxury resort and lodge establishment will be based on 5 Hectare and the proposed subject
property will offer high quality services with combination of luxury accommodation, diversified
international and national menu, entertainment, fitness and health, and conference facilities. Accordingly
we propose to develop a new Branded Luxury resort and lodge (45-65 rooms), convenient located to
have direct access to the Attractions nearby the rock hewn churches around Gherealta .it will offer a
luxury and relaxing environment for not only international tourist but also for the local people looking
for a nice place to spend the weekends or short vacations (e.g. summer school vacations, carnival, etc.)

Also, it is expected that it will offer to our customer excellent facilities to host special events as
seminars, weddings, private parties, etc. Also, it will include a SPA and outdoor package activities for
those tourists looking for a place to relax and invest some money in their physical and spiritual treatment
(e.g. engaging on outdoor games, Hiking, trekking, horse riding and presenting physically on church
ceremonies, and others.)The estimated building cost of the luxury resort and lodge establishment based
on expert estimation including cost of engineering services and land rent is USD6, 896,406.67.

Lodge Room
The lodge Rooms will be constructed on 5150 square meter. There will be 65 rooms varied from
Standard Queen Bed Rooms to Presidential Suite and Villas rooms as indicated in the Table7
below.Table 6: Type and number of lodge Rooms

Room Type Size in m2 No. of Rooms Total Size in m2

Standard Queen Bed Rooms 40 10 400

Standard King Bed Rooms 45 10 450

Standard Twin Rooms 50 10 500

Junior Suite Rooms 70 10 700

Family Suite Rooms 100 10 1000

Presidential Suite Rooms 140 10 1400

Villas 140 5 700

Total 65 5150

Conference Center
The venues and conference center will be designed to meet the demand of the target markets such like
the business travelers and luxury visitors for retreat .The Conference Center will have 8 meeting halls of
different size, 1 big, 3 medium and 4 small multipurpose halls placed on 3200 square meter area. The
biggest one can host 50 people at full capacity, the medium size hall can host 30 people each, and the 4
small size halls will host 10 to 20 people each. The meeting halls can be customized and partitioned to
different sizes and purposes based on prevailing demand of customers. The conference center will be
equipped with modern technology and facilities required to provide international standard service.

Restaurants
Our luxury resort and lodge will give high emphasis to food and Beverage .The restaurants will be
constructed on 2600 square meters with their adjacent kitchens. There will have 5 restaurants including
1 Ethiopian Cultural Restaurant that can host up to 250 people each at mealtime. The kitchens will be
designed and furnished with appropriate ventilation and layout to harmonize with the operation of the
restaurants and other activities of the luxury resort and Lodge establishment. It will be equipped with
Kitchen cabinets and heavy duty kitchen machineries.

Our luxury resort and lodge also will have facilities that allow customers to prepare their food based on
their needs on open space including in the compound of communities around our properties.

Bars and Lounges

The Bars and Lounges will be constructed on 800 square meters. There will be 5 bars and lounges with
hosting capacity of 500 people per day. Necessary consideration will be taken during construction to
have convenient layout of bars and lounges. Common facilities will be there for customers from the
lodge as well as walking customers.

Spa and Beauty Salon

The proposed lodge facility will have beauty salon with 800 square meters size. The Spa and beauty
salon will be furnished and equipped with the necessary fixtures and equipment to serve customers. It
will have separate wing for kinds in addition to wings for adults in their sex category (men and
women).

Gymnasium/ Fitness Center

It will be laid on 800 square meters area size. The Gymnasium will be well designed and equipped with
latest materials and facilities including appropriate ventilation and sound proofing to harmonize with
other functions of the lodge establishment. The fitness center will have also swimming pool adjacent to
the main building that can be easily accessed from the first basement.
Business Center
The business center will serve as back and upward ward linkage to the community products such like
honey, other agricultural products and indigenous craft products. The center comprises 1000 square
meters area allotted for ancillary services and products like office support and Stationary (Fax, Print,
Photocopy, Scan…etc.), Travel Agencies, ATM’s, Gift and souvenir shops and other similar products
and services.

Parking
Availability of parking lot is very important to the functionality of any luxury resort and lodge
establishment. In this luxury resort and lodge there will be a parking lot with modern appliance of
security and traffic placed on 3000 square meter area size. Based on international standard for parking
space the area allotted for parking will be enough for 208 cars where about 80% of the area is allocated
for car parking and the 20% is allocated for aisles between parking lanes.

Total allotted area= 1600 m2, (80% parking lane, 20%parking aisle)

Net parking space=3000*0.80=2400m2

International standard of parking space for 1 car= 2.4m*4.8m=11.52m2

Parking capacity (No. of cars) = 3000m2/11.52m2

=208cars

VII. ORGANIZATION AND MANAGEMENT PLAN

The proposed luxury resort and lodge establishment strongly believes the human resource element is an
essential component in the delivery of quality service. The business will work to build enthusiastic,
capable and empowered people interacting with customers in order to enhance its competitive advantage
among other things. The lodge will have human resource management and development manual to
evaluate jobs and remuneration packages against market benchmarks to employees for their agreed and
set out tasks so as to ensure they are competitive. These principles extend to accident, medical, death
and welfare benefits.

Organizational Structure
The subject property will five departments under the General Manager namely; i) Finance and
Administration, ii) Sales and Marketing, iii) Food and Beverage, iv) Housekeeping and Maintenance ,
and v) Fitness, recreation and Beauty Center. The lodge shall have an organizational structure whereby
the five departments can be run effectively by integrating management, expertise and open
communication between all personnel at all levels. The organizational structure of the subject property is
illustrated below:
Figure 1: Organizational Structure of luxury resort and lodge, Hawzien

General
Manager

Office
Assistance

Housekeeping Fitness,
Finance and Sales and Food and
and recreation and
Administration Marketing Beverage
Maintenance Beauty Center
Management Team
The management team of the proposed lodge will be led by dedicated General Manager and composed
of Finance and Administration Department Head, Marketing and Sales Department Head, Food and
Beverage Department Head, Housekeeping and Maintenance Department Head, and Fitness, Recreation
and Beauty Salon Department Head. The General Manager will be responsible for the overall
management of the lodge business establishment. The Finance and Administration Department will
handle the financial management of the lodge business as well as serving internal finance and
administration support. The Marketing and Sales Department will handle the Marketing and Sales
activities of the lodge which includes operation of the front office, lodge rooms conference and business
centers. The Food and Beverage Department will be in charge of the services of Restaurants, Bars and
Lounges. Maintaining cleanliness and prober functionality of lodge room facilities is the main duty of
Housekeeping and Maintenance Department. While the Fitness, recreation and beauty salon department
will take care of the service of gymnasium, beauty salon, swimming pool and so on. The lodge plans to
create passionate management team which motivates the entire employee and respect customers. To
this end, luxury resort and lodge establishment will make sure the General Manager and the Department
Heads have relevant Academic degrees’ and work experience in their respective profession.

Personnel Plan of The luxury Resort and lodge

The company will have 77 employees’ composed of General Manger, 5 Department heads, unit
heads, professionals, and support staff as specified in Table 8 below. The overall cost of personnel for
the first year will be USD153, 600.00, and expected to grow by 7% each consecutive year for the
business plan period. It may hire additional employee and mobilize per time workers when the business
grows. The lodge will have its own Human Resource Management and Development Manual which
clearly indicates remuneration, benefit package and other administrative issues of employees to manage,
motivate and develop its human resource. It will in place continuous staff development scheme through
in house or outsourced training packages.
Table 7: Personnel Plan of The luxury Resort and Lodge

Position No Monthly Total Monthly Annual Salary in Annual salary in

. salary Salary Birr dollar

1.Managment
1.1.General manager 1 20,000.00 20,000.00 240,000.00 $ 8,000.00

secretary 1 5000 5000 60000 20000

Subtotal 2 25,000.00 300,000.00 $ 10,000.00

2. Administration -

2.1.Finance and Administrative Manager 1 15,000.00 15,000.00 180,000.00 $ 6,000.00

2.2. Senior Accountant 1 10,000.00 10,000.00 120,000.00 $ 4,000.00

$ -

2.3.Junier Accountant 2 6,000.00 12,000.00 144,000.00 $ 4,800.00

2.4. Purchaser 1 6,000.00 6,000.00 72,000.00 $ 2,400.00

2.5. Store Keeper 1 6,000.00 6,000.00 72,000.00 $ 2,400.00

2.6. General Cashier 1 4,000.00 4,000.00 48,000.00 $ 1,600.00

2.7.Sales Casher 4 3,000.00 12,000.00 144,000.00 $ 4,800.00

2.8. Personnel & General Services Head 1 10,000.00 10,000.00 120,000.00 $ 4,000.00

2.9. Training Officer 1 8,000.00 8,000.00 96,000.00 $ 3,200.00

2.10. Driver 3 4,000.00 12,000.00 144,000.00 $ 4,800.00

2.11.Cleaner 3 1,500.00 4,500.00 54,000.00 $ 1,800.00

2.12.Securuty Guard 5 1,200.00 6,000.00 72,000.00 $ 2,400.00

Subtotal 24 105,500.00 1,266,000.00 $ 42,200.00

4.Sales and Marketing $ -

3.1. Sales and Marketing Manager 1 15,000.00 15,000.00 180,000.00 $ 6,000.00

3.2. Marketing Officer 1 8,000.00 8,000.00 96,000.00 $ 3,200.00

3.3. Web and System Administrator 1 8,000.00 8,000.00 96,000.00 $ 3,200.00

3.3.Front Office Head 1 10,000.00 10,000.00 120,000.00 $ 4,000.00

3.4. Receptionist 3 6,000.00 18,000.00 216,000.00 $ 7,200.00

Subtotal 7 59,000.00 708,000.00 $ 23,600.00

5. Housekeeping and Maintenance -

4.1.House keeper & Maintenance Head 1 8,000.00 8,000.00 96,000.00 $ 3,200.00

4.2.Bed Room Maids 5 2,000.00 10,000.00 120,000.00 $ 4,000.00

4.7. Laundry Maids 5 2,000.00 10,000.00 120,000.00 $ 4,000.00

4.8. General Technician 3 5,000.00 15,000.00 180,000.00 $ 6,000.00

Subtotal 14 43,000.00 516,000.00 $ 17,200.00

5. Food & Beverage $ -

5.1.Food & Beverage Manager 1 15,000.00 15,000.00 180,000.00 $ 6,000.00

5.2.Chef 1 12,000.00 12,000.00 144,000.00 $ 4,800.00

5.3.Assistance chef 2 8,000.00 16,000.00 192,000.00 $ 6,400.00

5.4.Cook 3 5,000.00 15,000.00 180,000.00 $ 6,000.00

5.5.Baker 2 5,000.00 10,000.00 120,000.00 $ 4,000.00

5.6.Head Waiter 2 6,000.00 12,000.00 144,000.00 $ 4,800.00

5.7.Waiter 6 4,000.00 24,000.00 288,000.00 $ 9,600.00

5.8.Cleaner 3 1,500.00 4,500.00 54,000.00 $ 1,800.00

Subtotal 20 108,500.00 1,302,000.00 $ 43,400.00

6.Fitness, recreation and Beauty Center -

6.1.Fitness, recreation and Beauty Center 1 8,000.00 8,000.00 96,000.00 $ 3,200.00

Head

6.2.Gym and aerobics assistance 1 6,000.00 6,000.00 72,000.00 $ 2,400.00

6.3. Life savior in swimming pool 2 5,000.00 10,000.00 120,000.00 $ 4,000.00

6.4. Sauna, Jacuzzi…etc assistance 2 4,000.00 8,000.00 96,000.00 $ 3,200.00

6.5. Massager 2 4,000.00 8,000.00 96,000.00 $ 3,200.00

6.4.Cleaner 2 1,500.00 3,000.00 36,000.00 $ 1,200.00

Subtotal 10 43,000.00 516,000.00 $ 17,200.00

Total 77 384,000.00 4,608,000.00 $ 153,600.00

VIII. FINANCIAL PLAN
The purpose of this financial plan is to show the overall investment cost, start-up summary, projected
income/loss statement, projected cash flow, and financial feasibility of the investment. The overall cost
of investment to develop and make fully functional the proposed subject property is estimated to be
USD8, 444,035.34. This investment cost will cover Land rent cost, Building Cost, Fixtures, Equipment,
Furniture and Facilities Installation cost, and Pre-opening and Start-up operation cost of the Luxury
resort and lodge establishment.

Table 8: over all investment cost

Land rent cost-first payment $ 4,166.00

Feasibility Study & Consultancy &Architectural design $ 137,928.13

Building construction including finishing cost and Landscaping and greenery cost $ 6,896,406.67

Subtotal $ 7,038,500.80

Fixtures, Equipment, Furniture, and Facilities Installation cost 0

Lodge Rooms equipment, fixture and furniture $ 100,000.00

Conference equipment and facilities $ 33,333.33

Kitchen equipment, cabinets and utensils $ 76,666.67

Gymnasium appliances $ 133,333.33

Beauty salon appliances $ 50,000.00

Motor Vehicles $ 83,333.33

Parking appliances and facilities $ 26,666.67

Safety and security system installation $ 50,000.00

Central Boiling system $ 50,000.00

Subtotal $ 603,333.33

Total Pre-opening and Start-up operation cost $ 802,201.21

Total Investment Cost $ 8,444,035.34

Own Equity (100%)

Start-up Summary
The overall investment cost including first year operation expenses to make the luxury resort and lodge
hotel operational is USD 8,444,035.34. Out of this total cost of the investment will be financed from
own equity of the project promoter.

Sales and Expenses forecast

The selling policy of Luxury Resort and lodge are expected to be full Board and generate from; i)
lodging Rooms, ii) Food and Beverage, iii) Conference Center, iv) Fitness, recreation and SPA and
Beauty Center,

The other source Revenue for the luxury resort and lodge expected from Additional services of Business
center and organizing MICE with in the compound and organizing touring packages to the surrounding
sites.

The luxury resort and lodge establishment will have 65 rooms of varied type. It will have 10 Standard
Queen Bed Rooms, 10 Standard King Bed Rooms, 10 Standard Twin Rooms, 10 Junior Suite, 10
Family Suite Rooms, and 5 Presidential Suite Rooms with price range from USD 325 to 1000.00.The
sales from lodge rooms are calculated with 55% occupancy rate.

Another revenue stream of the luxury resort and lodge establishment from organizing MICE events on
its conference center and organizing tour packages to surrounding sites. It will have 8 different size
meeting halls with modern appliances and electronic systems which can host 320 at full capacity, while
the sales in this business plan are assumed at 20% of full capacity.

On the hand operating expenses includes Sales cost, Salaries and wages, Employee's benefit,
Professional Advisory Service, Marketing and Promotion, Maintenance, Supplies, Depression, Interest,
Telephone & Internet, Electricity and Water. The sales cost of the lodge is assumed to be 20% of the
total sales, the Salaries and wages and Employee's benefit are USD 153,600.00 for first year of
operation. USD168,030.00,USD168,030.00, USD84,015.00, and USD100,000.00 are allocated for
Professional Advisory Service, Marketing and Promotion, Maintenance, Supplies respectively for the
first year of operation based on factor cost of Ethiopia Investment Commission. The Depression
expense for the building and Fixtures, Equipment, Furniture, and Facilities including vehicles are
assumed to be 5% and 10% respectively based on the rate of National Insurance Companies. Telephone
& Internet, and Electricity bill expenses are expected to be 0.1% of total annual sales, and Water bill
expense is assumed to be .05% of total annual sales in the first year of operation. The depression
expense will remain constant through the business plan period, and the interest expense will follow its
trend based on the repayment plan. The operation expenses for the first year are summed up to USD 3,
208,804.83 and assumed to increase by 7% annually for the consecutive business plan period.
Table 9: Detail Sales Forecast

Type of Service Qua Unit sales sales revenue sales sales sales revenue in year sales sales sales sales sales
ntity Pric revenue in year 2 revenue in revenue 5 revenue revenue revenue revenue revenue
e in in year 1 year 3 in year 4 in year 6 in year 7 in year 8 in year 9 in year
doll 10
ar
Standard 1980 $ $ $ $ $ $ $1,036,3 $1,139,9 $1,253,9 $1,379,3 $1,517,3
Queen Bed 325. 643,500. 707,850.00 778,635.00 856,498. 942,148.35 63.19 99.50 99.45 99.40 39.34
Rooms 00 00 50
Standard 1980 $ $ $ $ $ $ $1,116,0 $1,227,6 $1,350,4 $1,485,5 $1,634,0
King Bed 350. 693,000. 762,300.00 838,530.00 922,383. 1,014,621.30 83.43 91.77 60.95 07.05 57.75
Rooms 00 00 00
Standard Twin 1980 $ $ $ $ $ $ $1,116,0 $1,227,6 $1,350,4 $1,485,5 $1,634,0
Rooms 350. 693,000. 762,300.00 838,530.00 922,383. 1,014,621.30 83.43 91.77 60.95 07.05 57.75
00 00 00
Junior Suite 1980 $ $ $ $ $1,317,6 $ $1,594,4 $1,753,8 $1,929,2 $2,122,1 $2,334,3
Rooms 500. 990,000. 1,089,000.00 1,197,900.0 90.00 1,449,459.00 04.90 45.39 29.93 52.92 68.21
00 00 0
Family Suite 1980 $ $ $ $ $1,844,7 $ $2,232,1 $2,455,3 $2,700,9 $2,971,0 $3,268,1
Rooms 700. 1,386,00 1,524,600.00 1,677,060.0 66.00 2,029,242.60 66.86 83.55 21.90 14.09 15.50
00 0.00 0
Presidential 1980 $ $ $ $ $2,371,8 $ $2,869,9 $3,156,9 $3,472,6 $3,819,8 $4,201,8
Suite Rooms 900. 1,782,00 1,960,200.00 2,156,220.0 42.00 2,609,026.20 28.82 21.70 13.87 75.26 62.79
00 0.00 0
Villa 990 $ $ $ $ $1,317,6 $ $1,594,4 $1,753,8 $1,929,2 $2,122,1 $2,334,3
1,00 990,000. 1,089,000.00 1,197,900.0 90.00 1,449,459.00 04.90 45.39 29.93 52.92 68.21
0.00 00 0
Food and 3960 $ $ $ $ $1,581,2 $ $1,913,2 $2,104,6 $2,315,0 $2,546,5 $2,801,2
Beverage only 0 30.0 1,188,00 1,306,800.00 1,437,480.0 28.00 1,739,350.80 85.88 14.47 75.91 83.51 41.86
0 0.00 0
conference 36 $ $ $ $ $ $ $ $ $ $ $
service 1,00 36,000.0 39,600.00 43,560.00 47,916.0 52,707.60 57,978.3 63,776.2 70,153.8 77,169.2 84,886.1
0.00 0 0 6 0 2 0 2
Total sales $ $ $ $ $ $ $ $ $ $
Revenue 8,401,50 9,241,650.00 10,165,815. 11,182,3 12,300,636.15 13,530,6 14,883,7 16,372,1 18,009,3 19,810,2
 0.00 00 96.50 99.77 69.74 46.72 61.39 97.53

Projected Financial Statements

A. Projected Profit/Loss (Income) Statement
Table 10: Projected Income (Profit/Loss) Statement

Description 1st year 2nd year 3rd year 4th year 5th year 6th year 7th year 8th year 9th year 10th year

Sales Revenue 8,401,500 9,241,650 10,165,815 11,182,397 12,300,636 13,530,700 14,883,770 16,372,147 18,009,361 19,810,298
Cost of production 3,209,138 3,433,778 3,674,142 3,931,332 4,206,526 4,500,982 4,816,051 5,153,175 5,513,897 5,899,870
Taxable profit 5,192,362 5,807,872 6,491,673 7,251,064 8,094,111 9,029,717 10,067,719 11,218,972 12,495,465 13,910,428
Profit tax (35%) 1,817,327 2,032,755 2,272,085 2,537,872 2,832,939 3,160,401 3,523,702 3,926,640 4,373,413 4,868,650
Net profit 3,375,035 3,775,117 4,219,587 4,713,192 5,261,172 5,869,316 6,544,017 7,292,332 8,122,052 9,041,778
Table 11: Projected Cash Flow

year 1 year 2 year 3 year 4 year 5 year 6 year 7 year 8 year 9 year 10

A.CASH IN FLOW
Equity contribution 8,444,035
Bank loan 0
Sales revenue 8,401,500 9,241,650 10,165,815 11,182,397 12,300,636 13,530,700 14,883,770 16,372,147 18,009,361 19,810,298
Net working capital 300,000
Depreciation 720,141 895,718 819,659 750,529 687,671 630,489 578,446 531,056 487,883 448,531
Salvage value
Total cash inflow 17,565,676 10,137,368 10,985,474 11,932,926 12,988,307 14,161,188 15,462,215 16,903,203 18,497,245 20,258,829
B.CASH out FLOW
Fixed capital
Working capital
Operating cost 2,406,604 3,433,778 3,674,142 3,931,332 4,206,526 4,500,982 4,816,051 5,153,175 5,513,897 5,899,870
Loan repayment 0 0 0 0 0 0 0 0 0 0
Interest 0 0 0 0 0 0 0 0 0 0
Profit tax 1,817,327 2,032,755 2,272,085 2,537,872 2,832,939 3,160,401 3,523,702 3,926,640 4,373,413 4,868,650
Total cash out flow 4,223,930 5,466,533 5,946,228 6,469,205 7,039,464 7,661,383 8,339,753 9,079,815 9,887,309 10,768,519
Net cash inflow 13,341,746 4,670,835 5,039,246 5,463,721 5,948,843 6,499,805 7,122,463 7,823,388 8,609,935 9,490,309
Cumulative cash flow 13,341,746 18,012,581 23,051,827 28,515,548 34,464,390 40,964,196 48,086,658 55,910,046 64,519,982 74,010,291
Evaluation of Financial Feasibility
The financial feasibility of the luxury resort and lodge investments was evaluated using Payback
Period, Net Present Value (NPV) and Internal rate of Return (IRR) as follow:

Payback Period
The payback period, also called pay – off period is defined as the period required recovering the
original investment outlay through the accumulated net cash flows earned by the project.
Accordingly, based on the projected cash flow it is estimated that the project’s initial investment
will be fully recovered within 4 years.

Internal Rate of Return

The internal rate of return (IRR) is the annualized effective compounded return rate that can be
earned on the invested capital, i.e., the yield on the investment. Put another way, the internal rate
of return for an investment is the discount rate that makes the net present value of the
investment's income stream total to zero. It is an indicator of the efficiency or quality of an
investment. A project is a good investment proposition if its IRR is greater than the rate of return
that could be earned by alternate investments or putting the money in a bank account.
Accordingly, the IRR of this project is computed to be 50% indicating the viability of the
project.

A B

Data Description

-8,444,035 Initial cost of a business

3,375,035 income for the first year

3,775,117 income for the second year

4,219,587 income for the third year

4,713,192 income for the fourth year

5,261,172 income for the fifth year

 5,869,316 income for the six year

6,544,017 income for the seven year

7,292,332 income for the eight year

8,122,052 income for the nine year

9,041,778 income for the tenth year

Investment’s internal rate of return after ten years (IRR) 50%

Net Present Value

Net present value (NPV) is defined as the total present (discounted) value of a time series of cash
flows. NPV aggregates cash flows that occur during different periods of time during the life of a
project in to a common measuring unit i.e. present value. It is a standard method for using the
time value of money to appraise long-term projects. NPV is an indicator of how much value an
investment or project adds to the capital invested. In principal a project is accepted if the NPV is
non-negative. Accordingly, the net present value of the project at 10 % discount rate is found to
be USD $22,185,412.17indicating the viability of the project and hence, is acceptable.

Data Description

-$ 8,444,035.34 Initial cost of a business

$ 3,375,035.19 income for the first year
$ 3,775,116.91 income for the second year
$ 4,219,587.26 income for the third year
$ 4,713,191.76 income for the fourth year
$ 5,261,171.92 income for the fifth year
$ 5,869,316.36 income for the six year
$ 6,544,017.15 income for the seven year
$ 7,292,331.86 income for the eight year
$ 8,122,051.95 income for the nine year
$ 9,041,778.13 income for the tenth year

NPV $22,185,412.17
IX. SOCIO-ECONOMIC CONTRIBUTION AND
ENVIRONMENTAL CONSIDERATIONS

Expected Contribution of Project to Economic Development

Implementing this investment project has a long lasting impact on the socio-economic conditions
of the local, regional and national communities. The expected contribution of the project to
economic development is briefly described as follows.

Gross Value Added (GVA) and Employment

The GVA, also known as the localized gross domestic product (GDP), is a measure of the value
of goods and services produced in an area, industry or sector of the economy. It takes into
account the following:

 Net profits;
 Depreciation; and
 Salaries and wages.
The GVA is an indication of the economic activity that can take place in a certain geographical
area, brought about by the establishment or operation of a venture. GVA is calculated by adding
the average annual net profit, depreciation and salary spend. The GVA for this project is
expected to average at USD $37,818,997.31.

Based on the number of people needed to operate the operations, management and support staff,
the project could yield 77 direct job opportunities. In addition, the impact multiplier for jobs in
the Agro processing sector is 1.3 – therefore, in addition to the direct jobs created, this project
could contribute to the livelihoods of 231 people.

Hospitality Investments are pro-poor

Investments in lodges and hospitability sector are usually pro-poor and help local community to
directly benefit from the investment. Tourists staying in the lodge usually spend money on
beverages and foods the source of which is usually local farmers and business owners. Farmers
will be involved in the supply of animal products and crops and vegetables to be consumed by
customers of the proposed property.

Some 30 to 40 percent of the food and beverage spending of the tourist goes directly to the
farmer and businesses involved in the food and beverage supply chain. This indicates that the
project will generate an income of USD 672,120.00to farmers and small scale business operating
in the location of the subject property. Besides, around 5 local cooperatives and small scale
enterprises will be organized not only supply of sheep or goats, quality honey, handmade
souvenir and garments but also to supply their products to the Middle East markets through the
technical and managerial support of the proposed property. This will further enhance the
economic vitality of farmers and generation of hard currency to the region and the country. As
such, the project will have significant contribution in building strong and resilient local
community. Needless to say, this will definitely play a catalyst role as an incentive to enhance
productivity and production at local and regional level.

Enhance Influx of International and Domestic Tourists

It is obvious that the presence and/or absence of quality lodging facility significantly affects the
flow of tourists to a given destination site. The destination site does not have any luxury lodging
facility to accommodate lodging service needs of not only to high profile tourists but also to the
needs of the average tourist. This has been one of the major bottlenecks to the flow of tourists to
this historically valuable destination site. The subject property will be developed in such a way
that it will be a destination site in its own right. The subject property development concept
together with the historical site will induce demand and hence, increase the influx of
international tourist. To this end, the project will contribute to the generation of hard currency
and incomes of the local community.

Stimulate other Sectors of the Economy

Investment projects on lodging and hospitability sectors are well known for their role in
stimulating other sectors of an economy. Construction, transportation and agriculture sectors, to
say the least, are some of the sectors favorably affected by investment projects of this kind.
Hence, the subject property will contribute significantly to boosting the construction,
transportation and agriculture sectors of the region as well as the locality. No doubt, these sectors
will contribute to employment generation and to improved standard of living of citizens.
Lodge Operation and Management Skill Transfer
One of the key exogenesis to the tourism development in the Tigray State in particular and
Ethiopia in general is lack of qualified technical and managerial human capital. To redress this
challenge, the proposed property’s service delivery and day-to-day operations will be handled by
reputable foreign based hotel management companies in the form of management contract for 5
years period.

The management contract will contain terms and conditions explicitly dictating the company of
its obligation to train and certify local technical and managerial staffs. This approach to human
capital accumulation will address the skill and knowledge gaps rampant in the tourism and
hospitability sector.

Further, the subject property will serve as an apprenticeship center for TVET and college
students, and hence contribute to enhancing the human resources capabilities of the nation.
Serving as an apprenticeship center also contributes to reducing the knowledge and skill
bottlenecks the Ethiopian tourism and hospitality sector has been facing.

Fuels Investment in other Business Areas

The project will be generating steady profits over the project life. The proceeds of the investment
will be reinvested in other business opportunity areas. The new investment projects will create
job opportunities as well as wealth to the promoters of the project. This will contribute in
accelerating and integrating the pace of the socio-economic development of not only the region
but also the country. Hence, this project will have durable contribution in realizing the country’s
vision of joining middle income countries by 2025.