BUSINESS PLAN

ETEGE HOTEL LOCATION: ADDIS ABABA, ETHIOPIA

ETEGE HOTEL
2025
BUSINESS PLAN 2025

Table of contents
1. Executive summary
1.1 Brief introduction to the business plan its purpose
1.2 Summary of key points and objectives
2. Company overview
2.1 History and background of the hotel
2.2 Mission statement
2.3 Vision statement
2.4 Current ownership and management structure
2.5 Description of the hotel’s current services and facilities
3. Market Analysis
3.1 Description of the target market
3.2 Analysis of the competitive landscape
3.3 Identification of key trends and opportunities in the market
4. Expansion plan / operational plan
4.1 Description of the proposed renovations to the hotel’s rooms, pub, and restaurant
4.2 Timeline and budget for the renovations
4.3 Impact of the expansion on the hotel’s operations
4.4 staffing plan for the expansion hotel and new features
4.5 Training and development plan for staff
4.6 Operational procedures and policies
5. New Features
5.1 Description of the proposed new gym, spa, and event venue
5.2 Timeline and budget for the new features
5.3 Projected revenue from the new features
6. Marketing and Sales plan
6.1 Strategies for promoting the Expansion hotel and new features
6.2 Pricing strategies for the renovated rooms, pub, restaurant, gym and spa
7. Financial plan
7.1 projections for revenue, expenses, and profits
7.2 Financing plan for the Expansion and new features
7.3 Break-even analysis and return on investment projections
8. Funding request
9. Conclusion
9.1 summary of the business plan and its objectives
1.Executive summary

1 | ETEGE HOTEL
BUSINESS PLAN 2025

ETEGE Hotel is an existing hotel located in the heart of Addis Ababa, Ethiopia. Our hotel has
been in operation for Thirteen years and has established a loyal customer base. However, we
recognize the need to update our facilities and enhance our guest experience to remain
competitive in the market.

The purpose of this business plan is to outline a expansion and adding new features project for
Etege hotel. The hotel will undergo to expand its rooms, pub, and restaurant, and new features
will be added, including Catering and event venue. The objective of this plan is to increase
revenue, improve customer satisfaction, and position the hotel as a top destination in the market.
The plan will detail the proposed expand and new features, marketing and sales strategies,
operational procedures, and financial projections to ensure the success of the project.

Our expand plan includes adding a Catering and event venue to our existing facilities, as well as
updating guest rooms and common areas to create a modern, luxurious atmosphere. We will also
implement energy-efficient systems and eco-friendly practices to reduce our environmental foot
print.

Our marketing strategy will focus on show casing the updated facilities through social media,
online travel platforms, and partnerships with local businesses and tour operators. We will also
prioritize guest satisfaction by providing personalized service and attention to detail.

We project that our expansion costs will be approximately 30,000,000.00 Br and we expect to
generate revenues of approximately 30,752,640.00 Br in the first year of operation, with a
projected net profit of 27,432,640.00Br. Our revenue will primarily come from room bookings,
food and beverage sales, Cetering, and event bookings.

Our management team consists of experienced hospitality professionals who have a deep
understanding of the Ethiopian market. We have a General Manager, a Director of Sales and
Marketing, a Director of Food and Beverage, and a Director of Operations. We will also hire
qualified and experienced staff for our facilities.

At Etege Hotel, we prioritize guest satisfaction by providing personalized service and attention
to detail. Our staff will undergo extensive training in customer service, cultural sensitivity, and
safety and security procedures. We will implement a comprehensive risk management plan to
ensure the safety and security of our guests and staff during the expansion process.

Overall, our expansion plan for Etege hotel is aimed at providing a modern, luxurious experience
for our guests while maintaining our commitment to sustainability and responsible tourism. We
are confident that these updates will position us as a leading hotel in Addis Ababa and attract
new customers while maintaining our loyal customer base.

2 | ETEGE HOTEL
BUSINESS PLAN 2025

2. Company overview

Overview:

The hotel industry in Addis Ababa is highly competitive, with a range of international and local
hotel chains operating in the city. To stay ahead of the competition, hotels need to differentiate
themselves by offering superior services, amenities, and hospitality. For Etege Hotel Adding a
Catering and event venue can be a great way to attract more customers and increase revenue.

Mission statement

At our hotel, we strive to provide our guests with exceptional experiences by offering
comfortable accommodations, exceptional dining options, and a range of amenities to help them
relax and unwind. With our upcoming renovations and new features, including a state of the art
Bar , Restaurant ,Catering event venue, we are committed to providing our guests with
everything they need to make their stay unforgettable. Our pub and restaurant will also be
updated to provide a welcoming atmosphere. Outstanding service, and delicious food and drinks.
Our mission is to exceed our guest’s expectations and make their stay with us one they will
always remember.

Vision statement

Our vision is to become the leading Hotel in our region, offering our guests a luxurious and
unforgettable experience that blends comfort, convenience, and exceptional service. Through our
commitment to excellence, Expand, and sustainability, we aim to set a new standard for
hospitality and establish ourselves as a destination of choice for travelers seeking the ultimate in
relaxation, rejuvenation, and entertainment. With our newly renovated rooms, stylish pub and
restaurant, and state of the art amenities like our Catering and venue, we are well positioned to
deliver on this vision and exceed our guest’s expectations at every turn.

Company Profile:

SGS Hotel is a mid-sized hotel located in a central location in Addis Ababa. The hotel currently
offers standard amenities, including a restaurant, bar, and conference facilities. The hotel has
decided to renovate and expand its operations to include a gym, spa, and event venue to attract
more customers and increase revenue.

To create a business plan for a hotel renovation project that includes room, pub, restaurant
renovation and new features such as a gym, spa, and venue, it’s important to consider the
ownership and management structure of the business. Here’s a potential structure:

Ownership structure:

The hotel is owned by a single owner.

3 | ETEGE HOTEL
BUSINESS PLAN 2025

Management structure:

The hotel does have a management team to oversee daily operations and ensure that the
renovation project is completed on time and within budget. Here’s the management structure:

General Manager:

The general manger will be responsible for overseeing all aspects of the hotel’s operations,
including the renovation project. They will work closely with owners to develop a plan for the
renovation and ensure that it is executed accordingly to schedule and budget. They will also be
responsible for managing the hotel’s staff, finances, and marketing efforts.

Operation Manager:

The operations manager will oversee the day-to-day operations of the hotel, including the front
desk, housekeeping, and maintenance. They will work closely with the general manger to ensure
that all staff member are trained and performing their duties to the highest standard.

Food and Beverage manager:

The Food and beverage manager will oversee the hotel’s pub and restaurant, ensuring that they
are running smoothly and providing high-quality food and drinks to guests. They will also work
with the general manager to develop new menus and promotions to attract customers.

Spa and Fitness Manager:

The spa and fitness manager will be responsible for overseeing the hotel’s spa and gym facilities.
They will work with the general manger to develop new programs and services to attract guests,
and ensure that all equipment and facilities are maintained the the highest standards.

Event Manager:

The event manager will be responsible for overseeing the hotel’s event venue and ensuring that it
is booked and utilized to its fullest potential. They will work with the general manger to develop
marketing strategies to attract clients, and ensure that all events are executed smoothly.

Sales and Marketing Manager:

The sales and marketing manager is responsible for developing and implementing marketing
strategies to attract new customers to the hotel, as well as managing sales and promotional
activities.

4 | ETEGE HOTEL
 BUSINESS PLAN 2025

Organizational chart

GENERAL MANAGER

Assistance Manager
Gym & spa Manager Event Manager

Financial Front office Marketing & Logistics

HR Manager Food Manager
Directors Manager Sales Manager manager

Assistant purchase
Accountant Assistant manger Assistant

tequncian
Cashier Front desk Restaurant
Kitchen Manager
employee Manager
Security
manager

Valet parking
driver

Overall, the ownership and management structure of the hotel will play a critical role in the
success of the renovation project. By having a clear plan and experienced team in place, the hotel
can achieve its goals of creating a modern, attractive space that meets the needs of its guests.

Current services and products of a SGS hotel:

The hotel offers a range of room options to suit every need, including standard rooms, deluxe
rooms and twin bed. Each room is well appointed with comfortable beds, soft-linens, and
modern amenities such as flat TVs, high speed internet access. The rooms are designed with a
contemporary style and feature large windows that offer stunning views of the city.

5 | ETEGE HOTEL
BUSINESS PLAN 2025

THE Hotel bar and restaurant facilities are located on the ground floor, just off the lobby area.
The bar is stylish and inviting space that serves a range of premium spirits, wines and cocktails.
Guests can relax in the comfortable seating area and enjoy a drink or two with friends and
colleagues.

Overall, the hotel is a regular standard that is perfect for both business and leisure travelers of
local people with comfortable rooms, delicious dining options, and a range of amenities, guests
are sure to have a memorable stay.

3. Market Analysis

Industry Analysis

Market Overview:

The hospitality industry in Addis Ababa is experiencing steady growth, fueled by an increase in
business travel, tourism, and foreign investment in the country. With a population of over 5
million people and a booming economy, Addis Ababa is a popular destination for both domestic
and international travelers. The hotel industry in the city is highly competitive, with a range of
international and local hotel chains vying for a share of the market.

Market Size and Growth:

The hotel industry in Addis Ababa is expected to grow at a compound annual growth rate
(CAGR) of 7.4% between 2021 and 2026. The growth is driven by an increase in tourism and
business travel, as well as a rise in foreign investment in the country. The number of hotel rooms
in the city is expected to reach 14,800 by 2026, up from 10,200 in 2021.

Competitive Landscape:

The hotel industry in Addis Ababa is highly competitive, with a range of international and local
hotel chains operating in the city. Major international hotel brands include Marriott International,
Hilton Worldwide, and Radisson Hotel Group, while local brands include Sarem Hotel and Spa,
Soramba Hotel, and Jupiter International Hotel. The addition of a gym and spa to a hotel can be a
upgrading factor, as it provides additional amenities that customers are increasingly looking for.

Market Trends:

The hospitality industry in Addis Ababa is evolving to meet the changing needs of customers.
Some of the key trends in the market include:

• Increasing demand for luxury hotels: As the economy grows, there is a rising demand for
luxury hotels that offer premium amenities and services.

6 | ETEGE HOTEL
BUSINESS PLAN 2025

• Focus on sustainability: There is a growing trend towards eco-friendly and sustainable hotels
that prioritize energy efficiency and environmental conservation.

• Digital transformation: Hotels are increasingly adopting technology solutions to improve guest
experience and streamline operations.

Regulatory Environment:

The hotel industry in Ethiopia is regulated by the Ethiopian Ministry of Culture and Tourism.
Hotel operators are required to obtain a license from the ministry to operate in the country. The
ministry also sets standards for hotel operations, including safety and hygiene regulations.

Conclusion:

The addition of a gym ,spa and venue to a hotel in Addis Ababa can be a strategic move to
differentiate the hotel from its competitors and attract more customers. The hotel industry in the
city is experiencing steady growth, with a range of international and local hotel chains operating
in the market. However, with the right marketing and customer experience strategy, the hotel can
gain a competitive advantage in the market. It is important for the hotel to stay abreast of
industry trends and regulations to ensure compliance and maintain a high level of customer
satisfaction.

Customer analysis

Demographics:

The target market for the renovated hotel is likely to be a mix of business and leisure travelers. In
terms of age, the target market may range from 20 to 65 years old. The gender split is likely to be
fairly even, with both men and women interested in using the gym and spa facilities. The hotel
also attracts local residents who are looking for a fine dining experience or a place to host events.

Psychographics:

The target market for the renovated hotel is likely to be relatively for mid and higher class
people, as they are more likely to be able to afford the room rates and additional services. They
may be professionals, entrepreneurs, business people or executives who are looking for a luxury
experience that caters to their busy schedules. They may also be health-conscious individuals
who are looking for a hotel that provides access to a gym and spa.

Behavioral:

The target market for the renovated hotel is likely to be discerning travelers and local people who
value quality, fair price and excellent service. They may be looking for a hotel that provides a
unique experience, rather than a standard chain hotel. They may also be repeat guests who have
stayed at the hotel before or who have heard about the hotel through positive word-of-mouth

7 | ETEGE HOTEL
BUSINESS PLAN 2025

recommendations. The hotel should aim to provide exceptional customer service to ensure that
guests return and recommend the hotel to others.

Needs and Wants:

The renovated hotel's target market is likely to have a range of needs and wants, including:

• Comfortable and well-appointed rooms with modern amenities

• Access to a gym and spa facilities

• High-quality food and beverage options, including a pub and restaurant

• A range of event spaces for hosting meetings, conferences, and social events

• Excellent customer service and attention to detail.

Conclusion:

To attract and retain customers for the renovated hotel in Addis Ababa, it is essential to
understand their demographics, psychographics, and behavioral patterns. By catering to their
needs and wants, the hotel can create a memorable and unique experience that will encourage
repeat business and positive word-of-mouth recommendations. It is important to provide
exceptional customer service and pay attention to the details to ensure that guest’s feel valued
and appreciated. By doing so, the hotel can differentiate itself from competitors and become a
top choice for discerning travelers and local people in Addis Ababa.

Competitive Analysis

SWOT Analysis

Strengths:

1 Location: The hotel is located in a prime location in Addis Ababa, providing easy access to
local attractions, business centers, and tourist sites.

2 Reputation: The hotel has a good reputation in the market; it can attract customers who value
high-quality service and a luxury experience.

3 Facilities: The addition of a gym, spa, and venue spaces can attract a wider range of customers,
including health-conscious travelers and event organizers.

4 Food and Beverage: A high-quality pub and restaurant can attract both guests and local
residents looking for a dining experience.

Weaknesses:

8 | ETEGE HOTEL
BUSINESS PLAN 2025

1. Limited Renovation: If the renovation is not extensive, it may not be enough to attract new
customers or retain existing ones.

2. Limited Brand Recognition: If the hotel is not well-known in the market, it may struggle to
attract customers and compete with larger, more established hotels.

Opportunities:

1 Growing Market: The tourism and hospitality market in Ethiopia is growing, and there is an
opportunity for the hotel to capture a larger share of the market by offering unique and high-
quality services.

2 Diversification: The addition of new facilities and amenities can diversify the hotel's offerings,
attracting a wider range of customers and increasing revenue streams.

3 Partnerships: Collaborating with local businesses or tour operators can offer unique
experiences for guests, making the hotel more attractive to travelers.

Threats:

1 Economic Uncertainty: Economic instability in Ethiopia can affect the tourism industry,
resulting in a decrease in demand for hotels and hospitality services.

2 Increased Competition: New hotels may enter the market, or existing hotels may expand their
offerings, making it difficult for the hotel to compete.

3 External Factors: Natural disasters, political unrest, or other unforeseen events can impact the
hotel's operations and profitability.

Direct Competitors:

1 Semen hotel, a Luxury Collection Hotel: This is a high quality hotel located in Addis Ababa
with multiple dining options, fitness facilities, and event spaces. It attracts a similar target market
to the renovated hotel, offering luxurious amenities and high-end services.

2 Soramba Hotel: This is a hotel located in the city center, offering modern rooms, a gym, a spa,
and multiple dining options. It may attract business travelers and families looking for a
comfortable stay in the city.

Indirect Competitors:

9 | ETEGE HOTEL
BUSINESS PLAN 2025

1 Yerossa : Many visitors to Addis Ababa may opt to stay in an Yerossa apartment or house,
especially if they are traveling with a group. This can provide a more cost-effective option and
more personalized experience for guests.

2 Other boutique hotels: There are several smaller boutique hotels in the city, offering unique
and personalized experiences. These may be attractive to travelers looking for a more intimate
atmosphere.

Competitive Advantage:

To differentiate from competitors, the renovated hotel should focus on providing exceptional
customer service and attention to detail. By offering a unique and memorable experience for
guests, the hotel can create a loyal customer base and positive word-of-mouth recommendations.
Additionally, the addition of new features like the gym, spa, and venue spaces can attract guests
who are looking for additional amenities during their stay. The pub and restaurant should offer
high-quality food and drink options to further enhance the guest experience. Finally, the hotel
should leverage its location in Addis Ababa to offer unique cultural experiences and tours to
guests. By providing a comprehensive and personalized experience, the hotel can stand out in a
crowded market and become a top choice for discerning travelers.

Conclusion:

By analyzing the hotel's strengths, weaknesses, opportunities, and threats, the hotel has
developed a strategic plan to renovate and improve its offerings. By leveraging its strengths and
opportunities, the hotel can position itself as a top choice for discerning travelers and local
people, while addressing weaknesses and threats can help the hotel mitigate potential risks and
remain competitive in the market.

4. Renovation plan

The renovation plan for SGS hotel project in Addis Ababa could be structured as follows:

1 Project Overview:

This section provides a brief summary of the hotel renovation project, including the goals and
objectives of the project, the timeline for completion, and the estimated budget.

1.1 project overview

The hotel renovation project in Addis Ababa aims to upgrade the hotel's facilities, including
renovating the hotel rooms, pub, and restaurant and adding new features such as a gym, spa, and
venue. The project aims to enhance the guest experience and increase the hotel's revenue and
profitability.

10 | ETEGE HOTEL
BUSINESS PLAN 2025

The renovation of the hotel rooms will involve upgrading the existing fixtures, furniture, and
equipment to meet modern standards of comfort and functionality. The renovation will be done
in phases, with each phase focusing on a specific set of rooms to minimize disruption to guests.

The pub and restaurant will be renovated to create a more modern and attractive atmosphere for
guests, with updated furnishings, lighting, and decor. The renovation will also include upgrading
the kitchen equipment to improve the quality and efficiency of food service.

The addition of a gym and spa will provide guests with additional amenities to enhance their stay
at the hotel. The gym will be equipped with state-of-the-art exercise equipment, while the spa
will offer a range of services, including massage, facials, and other wellness treatments.

The venue will be designed to accommodate a range of events, including conferences, weddings,
and other special occasions. The venue will be equipped with audio-visual equipment and will
offer catering services to meet the needs of guests.

The project will be implemented over a period of 8 months, with each phase carefully planned
and managed to ensure minimal disruption to guests. The project will be overseen by a dedicated
project manager and will involve a team of experienced contractors and subcontractors.

The total budget for the project is estimated at 30 million birr, with the majority of the funding
allocated for the renovation of the hotel rooms, pub and restaurant and new features of gym, spa
and venue. The expected revenue and profitability of the renovated hotel are projected to
increase significantly, making the project a worthwhile investment for the hotel's owners.

2 Room Renovations:

This section outlines the specific steps that will be taken to renovate the hotel rooms, including a
detailed timeline for each step, the materials and equipment needed, and any contractors or
subcontractors that will be involved.

2.1 Room renovation of the hotel

The room renovation project of SGS hotel aims to enhance the comfort and functionality of the
hotel rooms to meet the expectations of modern travelers. The renovation will involve the
following steps:

1 Planning and Design: The first step in the room renovation project is to develop a detailed plan
and design for the renovation. This will involve working with an experienced architect and
interior designer to create a concept for the new room design, including the selection of
materials, colors, and furnishings.

11 | ETEGE HOTEL
BUSINESS PLAN 2025

2 Demolition and Removal: The room renovation plan has been finalized; the existing fixtures,
furniture, and equipment will be removed from each room. This will involve careful planning to
minimize disruption to guests, including scheduling the demolition work during off-peak hours.

3 Electrical and Plumbing Upgrades: Before new fixtures and equipment can be installed, the
electrical and plumbing systems in each room will be upgraded to meet modern safety and
efficiency standards. This will involve the installation of new electrical outlets, switches, and
lighting fixtures, as well as the replacement of outdated plumbing fixtures.

4 Installation of New Fixtures and Equipment: Once the electrical and plumbing upgrades have
been completed, new fixtures and equipment will be installed in each room. This will include
new flooring, wall coverings, bedding, and furniture, as well as updated technology such as
smart TVs and high-speed internet access.

5 Finishing Touches: The final step in the room renovation project will be to add the finishing
touches, including decorative items such as artwork, curtains, and accessories. This will help
create a welcoming and comfortable atmosphere for guests.

The total cost to renovate the rooms, pub and Restaurant and add new feature of the venue will
cost 8,000,000.00 Br.

Throughout the renovation project, the hotel will prioritize the safety and comfort of its guests by
minimizing noise and disruption. The project will be managed by a dedicated project manager
who will work closely with the hotel staff to ensure that the renovation is completed on time and
within budget

3. Pub and Restaurant Renovation:

This section outlines the specific steps that will be taken to renovate the hotel's pub and
restaurant areas, including a detailed timeline for each step, the materials and equipment needed,
and any contractors or subcontractors that will be involved.

2.2 Pub and restaurant renovation for SGS hotel

The pub and restaurant renovation project of SGS hotel aims to create a modern and inviting
atmosphere for guests, improve the quality of food service, and enhance the profitability of the
hotel's food and beverage operations. The renovation will involve the following steps:

1 Planning and Design: The first step in the pub and restaurant renovation project will be to
develop a detailed plan and design for the renovation. The hotel has worked with experienced
architect and interior designer to create a concept for the new restaurant and pub design,
including the selection of materials, colors, and furnishings.

12 | ETEGE HOTEL
BUSINESS PLAN 2025

2 Demolition and Removal: the existing fixtures, furniture, and equipment will be removed from
the restaurant and pub area. This will involve careful planning to minimize disruption to guests,
including scheduling the demolition work during off-peak hours.

3 Electrical and Plumbing Upgrades: Before new fixtures and equipment can be installed, the
electrical and plumbing systems in the restaurant and pub area will be upgraded to meet modern
safety and efficiency standards. This will involve the installation of new electrical outlets,
switches, and lighting fixtures, as well as the replacement of outdated plumbing fixtures.

4 Installation of New Fixtures and Equipment: Once the electrical and plumbing upgrades have
been completed, new fixtures and equipment will be installed in the restaurant and pub area. This
will include new flooring, wall coverings, tables, chairs, and bar stools, as well as updated
kitchen equipment to improve the quality and efficiency of food service.

5 Finishing Touches: The final step in the pub and restaurant renovation project will be to add
the finishing touches, including decorative items such as artwork, lighting fixtures, and
accessories. This will help create a welcoming and comfortable atmosphere for guests.

Throughout the renovation project, the hotel will prioritize the safety and comfort of its guests by
minimizing noise and disruption. The project will be managed by a dedicated project manager
who will work closely with the hotel staff to ensure that the renovation is completed on time and
within budget. The renovated pub and restaurant are expected to increase revenue and
profitability for the hotel by attracting more guests to dine and drink on the premises.

4 New Features:

This section describes the new features that will be added to the hotel, including a gym, spa, and
venue. It outlines the specific steps that will be taken to implement each of these features,
including a detailed timeline for each step, the materials and equipment needed, and any
contractors or subcontractors that will be involved.

3.3 Addition of new features to the hotel

The addition of a gym, spa, and venue to the hotel in Addis Ababa, Ethiopia, will provide guests
with additional amenities and enhance the hotel's competitiveness in the market. The project will
involve the following steps:

1 Planning and Design: The first step in the addition of the gym, spa, and venue will be to
develop a detailed plan and design for the new facilities. This hotel has worked with experienced
architects, interior designers, and fitness equipment suppliers to create a concept for the new
spaces, including the selection of materials, colors, and equipment.

13 | ETEGE HOTEL
BUSINESS PLAN 2025

2 Construction: This will involve renovating space for the gym, spa, and venue. The
construction process will be managed by a dedicated project manager who will work closely with
the hotel staff to ensure that the project is completed on time and within budget.

Throughout the addition of the gym, spa, and venue, the hotel will prioritize the safety and
comfort of its guests by minimizing noise and disruption. The new amenities are expected to
attract more guests to the hotel, increase revenue and profitability, and provide guests with an
enhanced experience during their stay.

6. Marketing and sales strategies

There are a number of effective marketing and sales strategies that SGS hotel can use to promote
its brand and attract more customers.

1. Create a strong online presence: In today’s digital age, having a strong online presence is
crucial for any hotel. Create a website that is user-friendly and visually appealing, and
optimize it for search engines so that it ranks well in search results. You should also
create social media accounts for your hotel and regularly post updates and promotions.
2. Utilize email marketing: Email marketing is a powerful tool for reaching out to potential
customers engaged. Collect email addresses from guests and subscribers, and send out
newsletters, special offers, and other promotional materials.
3. Attend trade shows and events: Attending trade shows and events in your industry is a
great way to network and promote your hotel. Make sure you have promotional materials
to hand out, such as brochures, business cards, and branded merchandise.
4. Offer packages and promotions: create packages and promotions that entice guests to
choose your hotel over competitors. Offer special rates for extended stays, free meals or
drinks and other incentives.
5. Build relationship with local businesses: partnering with local business can help you
expand your reach and attract more customers. Reach out to local restaurants, bars, and
other attractions and offer to cross- promote each other.
6. Offer exceptional customer service: providing exceptional customer service is one of the
most effective marketing strategies for hotels. Happy customers are more likely to
recommend your hotel to others and write positive reviews online.
7. Use guest feedback to improve: Encourage guests to leave feedback to make
improvements. Responding to negative feedback in a professional manner can also help
improve your reputation and attract more customers in the long run.
8. TV and radio advertising for mass audience
The total amount of money required doing for the marketing and sales is
1,000,000.00 Br.

14 | ETEGE HOTEL
BUSINESS PLAN 2025

Pricing strategy
There are several pricing strategies that a hotel can use to maximize revenue and
occupancy rates. Here are some common pricing strategies:

1. Dynamic pricing: Dynamic pricing involves adjusting room rates based on real-time demand,
seasonality, events, and other factors that influence demand. By using dynamic pricing,
hotels can increase revenue by charging higher rates during high demand periods and
lowering rates during low demand periods.
2. Price Bundling: This strategy involves offering packages that include rooms, meals, and
other amenities at a bundled price. By bundling services, hotels can create additional value
for customers and increase revenue by selling multiple services at once.
3. Loyalty programs: Hotels can offer loyalty programs that reward guests for frequent stays or
spending. By offering rewards and discounts to loyal customers, hotels can encourage repeat
business and increase revenue.
4. Early Bird Discounts: Offering discounts for customers who book their rooms in advance can
encourage bookings and increase revenue.
5. Last minute deals: Similarly, offerings discounts for last-minute booking can help hotels fill
rooms that might otherwise go empty, increasing revenue.
6. Seasonal pricing: Adjusting prices based on seasonal demand can help hotels maximize
revenue during peak periods and maintain occupancy during low-demand periods.

Ultimately, it’s important for hotels to regularly monitor and adjust their pricing strategies based
on market conditions and customer demand.

7. Financial projection
7.1Revenue Projections
Room’s revenue
For the first year Based on 44 rooms and an occupancy rate of 80%, the hotel can expect to sell
around 12,848 room nights per year (44 rooms x 365 days x 80%). The room rate of 700br plus
15% tax amounts to 805 per night.
For the second year, with a 2% increase in room sales, the hotel can expect to sell around
13,169.2 room nights per year (44 rooms x 365 days x 82%). The room rate of 700br plus 15%
tax amounts to 805 per night in the second year.
For the third year, with a 2% increase in room sales, the hotel can expect to sell around 13,490.4
nights per year (44 rooms x 365 days x 84%). The room rate of 700br plus 15% tax amounts to
805 per night in the second year. Therefore, the total revenue for the hotel rooms can be
projected as follows:
Year 1: -12,848 room nights x 805br = 8,852,640.00 Br
Year 2:- 13,169.2 room nights x 805br = 10,601,206.00
Year 3:- 13,490.4 room nights x 805br = 10,859,772.00
Year 4:- 13,500 room nights x 893.81br = 12,407,125.93

15 | ETEGE HOTEL
BUSINESS PLAN 2025

Year 5:- 13,600 room nights x 985.82br = 13,407,125.93

Pub and restaurant revenue
• The pub and restaurant can accommodate 100 people at any given time.
For the first year Based on 50% users (50* 365= 18250 people) and 200 birr profit per person.

For the second year, with a 10% increase users, the hotel pub and restaurant can expect to serve
(55x 365 = 20,075 people).

For the third year, with a 10% increase users, the hotel pub and restaurant can expect to serve
(60.5x 365 = 22,082.5 people).
Therefore, the total revenue for the hotel from the pub and restaurant can be projected as
follows: - Year 1:- 18,250 x 200 Br = 3,650,000.00
- Year 2:- 20,075 x 200 Br = 4,015,000.00
- Year 3:- 22,082.5 x 200 Br = 4,416,500.00
-Year 4:- 20,075 x 200 Br = 4,907,222.22
- Year 5:- 22,082.5 x 200 Br = 5,452,469.16

YEAR 1 -Total hotel revenue

Room revenue-8,852,640.00
Pub and restaurant-3,650,000.00
Total revenue-30,752,640.00

YEAR 2 -Total hotel revenue

Room revenue-10,601,206.00
Pub and restaurant-4,015,000.00
Total revenue-34,691,206.00

YEAR 3 -Total hotel revenue

Room revenue-10,859,772.00
Pub and restaurant-4,416,500.00
Total revenue-37,358,772.00
YEAR 4 -Total hotel revenue
Room revenue-12,066,413.33
Pub and restaurant-4,907,222.22
Total revenue-41,509,746.67
YEAR 5 -Total hotel revenue
Room revenue-13,407,125.93
Pub and restaurant-5,452,469.14
Total revenue-46,121,940.74
7.2 Operating expenses:
7.3

16 | ETEGE HOTEL
BUSINESS PLAN 2025

Operating expenses for the hotel will include costs associated with running the hotel, such as
salaries, utilities, equipment maintenance, and supplies. Some of the significant expenses that
the hotel may incur include:
• Salaries and wages: Assuming an average monthly salary of 170,000.00 birr per month, and
the annual salary expense would be 2,040,000.00
• Utilities: This can include electricity, water, gas, and internet services. Assuming a monthly
cost of 90,000.00, the annual utility expense would be 1,080,000.00
• Maintenance: This can include costs associated with repairs and upkeep of the hotel property
and equipment. Assuming an annual cost of 200,000.00, the maintenance expense would be
200,000.00
• Supplies: This can include costs for cleaning supplies, towels and other hotel amenities.
Assuming an annual cost of 100,000.00 Br the supplies expense would be 100,000.00 Br
Therefore, the total operating expenses for the hotel can be projected as follows:
2,040,000.00 (salaries) + 1,080,000.00 (utilities) + 200,000.00 (maintenance) + 100,000
(supplies) = 3,320,000.00 Br

3 Net operating income (NOI):

The net operating income (NOI) can be calculated by subtracting the total operating expenses
from the total revenue:
Year 1: 30,752,640.00 (revenue) - 3,320,000.00 Br (expenses) = 27,432,640.00
Year 2: 34,691,206.00 (revenue) - 3,320,000.00 Br (expenses) = 31,371,206.00
Year 3: 37,358,772.00 (revenue) - 3,320,000.00 Br (expenses) = 34,038,772.00
As we can see, the hotel is expected to generate significant profits in the first three years due to
wide customer base and diversification.
1. Debt service
• Debt Service: Assuming a loan of 30,000,000.00 million at a 15.5% interest rate over a 5-year
term, the annual debt service would be: 8,659,152.00
Return on Investment (ROI):
Assuming the hotel was sold after 10 years for ( amount ),
The ROI would be: (Net profit/cost of investment) x 100% = percent

BREAKEVEN
To calculate the breakeven point in years for a hotel with a revenue of 30,752,640.00, an
investment of 61,774,003.35, fixed expenses of 3,320,000.00 Br per year, and assuming that the
hotel's net income is reinvested into the business, we can use the following formula:
Breakeven Point in Years = total Investment / Annual Net cash inflow
To calculate the annual net income, we need to subtract the total expenses, including fixed and
variable costs, from the revenue:
Annual Net Income = Revenue - Total Expenses
Assuming the same variable costs of (amount) per year as in the previous example, we can
calculate the annual net income:
17 | ETEGE HOTEL
BUSINESS PLAN 2025

Annual Net Income = 30,752,640.00 (revenue) - 3,320,000.00 Br (expenses)

Annual Net Income = 27,432,640.00
Substituting the values into the breakeven point in years formula:
Breakeven Point in Years = 61,774,003.35 / 27,432,640.00
Breakeven Point in Years =2
Therefore, the breakeven point for the hotel is 2 years. This means that the hotel needs to
operate for at least 2 years and generate a total revenue of 61,774,003.35 to cover its investment
and fixed and variable costs and reach profitability. After the breakeven point, the hotel's net
income can be reinvested or distributed as dividends to the owners. It's important to note that
this calculation assumes a constant revenue and expense structure over the years, which may not
be the case in reality.

Funding request

We are seeking funding to support the renovation of our hotel rooms, the addition of new
features to our gym, venue, and spa, and the creation of a new pub and restaurant. The total
funding requirement for this project is 30 million birr.
The renovation of our hotel rooms will involve a complete overhaul of our current rooms, pub
and restaurant including the installation of new furnishings, technology, and amenities. The
addition of new features to our hotel, gym, venue, and spa will include the installation of state-
of-the-art equipment and the creation of new spaces to cater to the individual needs of our guests.
The creation of a new pub and restaurant will offer a range of dining options to cater to
individual preferences.
The funding will be used to cover the costs of the renovation, including construction, equipment,
furnishings, and technology. We will also use the funding to cover marketing and promotional
expenses to raise awareness of our new and improved product offerings.
We anticipate that the renovation and addition of new features will significantly increase our
revenue and provide a strong return on investment for our investors. We have conducted
extensive market research and believe that there is strong demand for our upgraded hotel product
and services.
In return for the funding, we are offering our hotel as collateral to the Bank. We believe that this
investment opportunity presents a strong potential for growth and profitability in the hospitality
industry.
Thank you for your consideration, and we look forward to discussing this opportunity with you
further.
Conclusion

18 | ETEGE HOTEL
BUSINESS PLAN 2025

In conclusion, the business plan for a hotel with renovation of rooms, pub, restaurant, and new
features of gym, venue and spa offers a comprehensive and all-inclusive experience for guests.
The hotel will go with a major renovation to upgrade the rooms and add new features to enhance
the guest experience, the renovated rooms will be designed to provide guest with ultimate
comfort and relaxation, while the new pub and restaurant offer a range of dining options to cater
to individual preferences. The new features of gym, venue, and spa provide a comprehensive
health and wellness experience that caters to the individual needs of our guests. The hotel’s
commitment to exceptional service and attention to detail ensures that every guest feels
welcomed and cared for during their stay. In addition, the hotel will offer a range of services to
enhance the guest experience, including 24 hour room service, valet parking, concierge services,
and a business center.

The financial projections for the hotel are based on realistic assumptions and market research
data. It is anticipated that the hotel will generate significant revenue and provide a strong return
on investment for investors. Overall, the hotel’s product and service offering are designed to
create a luxurious and comfortable environment with fair price that allows gusts to unwind,
relax, enjoy their stay. The hotels commitment to excellence and attention to detail ensures that
every guest has a memorable and enjoyable experience.

19 | ETEGE HOTEL