hotel business plan in ethiopia pdf

New Business Ethiopia

Covering Business & Economy Since 2009

Hotel, hospitality business in Ethiopia

By Woubishet Sisay – The hotel and hospitality industry in Ethiopia has experienced significant growth and development in recent years.

Addis Ababa, the capital city of Ethiopia, is a major hub for business travelers and tourists. It is home to numerous international conferences, diplomatic missions, and organizations. Consequently, the city has seen a surge in the number of luxury hotels catering to high-end clientele. These hotels offer world-class amenities, including conference facilities, fine dining restaurants, spa services, and recreational activities.

Apart from Addis Ababa, other popular tourist destinations in Ethiopia such as Lalibela, Bahir Dar, Gondar, Axum, and the Simien Mountains have also witnessed an increase in hotel development. These regions attract tourists with their historical sites, natural beauty, and unique cultural experiences.

Key Players in the Ethiopian Hotel Industry The Ethiopian hotel industry comprises a mix of international hotel chains, local hotel groups, independent boutique hotels, and guesthouses. Some of the key players in the industry include:

1. Ethiopian Hotels Enterprise (EHE): EHE is a government-owned corporation responsible for managing several hotels across Ethiopia. It operates under the Ministry of Culture and Tourism and plays a significant role in providing accommodation options for both domestic and international travelers. 2. Marriott International: Marriott International, one of the world’s largest hotel chains, has a strong presence in Ethiopia. It operates several hotels in Addis Ababa, including the Sheraton Addis, which is a landmark luxury hotel in the city.

Challenges Facing the Hotel and Hospitality Industry in Ethiopia While the hotel and hospitality industry in Ethiopia has experienced significant growth, it also faces various challenges that need to be addressed for sustainable development. Some of the key challenges include:

1. Infrastructure: Despite improvements in recent years, Ethiopia’s infrastructure still requires further development to support the growing tourism industry. Issues such as inadequate road networks, limited air connectivity, and inconsistent power supply can hinder the industry’s growth potential.

2. Skilled Workforce: The availability of a skilled workforce is crucial for delivering high-quality hospitality services. However, there is a shortage of trained professionals in the Ethiopian hotel industry. Efforts are being made to address this issue through vocational training programs and collaborations with international hospitality schools.

3. Marketing and Promotion: While Ethiopia has made progress in promoting itself as a tourist destination, more efforts are needed to enhance marketing and promotional activities on both domestic and international fronts. Effective branding campaigns and targeted marketing strategies can help attract a wider range of tourists.

Furthermore, Ethiopia’s strategic location as a gateway to Africa positions it as a potential hub for international conferences and events. This presents an opportunity for the hotel industry to cater to the needs of business travelers and delegates attending such events.

In conclusion, the hotel and hospitality industry in Ethiopia has experienced significant growth in recent years. The government’s efforts to promote tourism, improve infrastructure, and ease visa regulations have played a crucial role in attracting both domestic and international visitors.

With a mix of international hotel chains, local hotel groups, and independent boutique hotels, Ethiopia offers a diverse range of accommodation options. While challenges such as infrastructure development, skilled workforce availability, and marketing efforts need to be addressed, the future prospects for the industry are promising .

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Hotel Business Plan

OK, so you have decided to realize your dream and open your own hotel business . You have thought out an amazing concept delivering unparalleled guest service. The next step would be to write a hotel business plan. It’s like a road map to the opening. However, as a seasoned hotel revenue management consulting and hotel management company , we have seen that this is where most entrepreneurs get stuck.

Why? Many do not have the time and don’t know what to write or how to do the financials. But until you finish your business plan, you will not be able to get the financing either. So you end up with ideas sitting in your head not realizing your dream.

Really it is not that difficult to make a good hotel business plan. It is merely a structured summary of your idea. Most people try to include everything about their hotel concept in the plan. This leads to an indigestible super novel-like bookwork, aka a mess.

The key is, knowing what to include, and what not to include in your hotel business plan. Create a clear road map for success. Excite investors rather than bore them to death like most business plans full of redundant information do. And you need to lead readers down the exact path you want.

One of the main challenges for example is that after reading the first page most businesses often don’t fully understand what the hotel is all about. For investors and lenders, it is crucial they can quickly comprehend your plan, without reading the whole document.

Hotels 101: The Basics of Business Planning

We have put together a hotel business plan template to help you on your way. Check out our approach based on 10 critical points, being:

• Executive Summary
• Company Analysis
• Industry Analysis
• Customer Analysis
• Competitive Analysis
• Strategic Plan
• Operations Plan
• Management Team
• Financial Plan
• Key Milestones

Steps of your Hotel Business Plan

Let’s dive into the step-by-step checklist of what your hotel business plan should look like.

Infographic by Xotels

1. Executive Summary

This first part should consist of two main parts, being:

• Mission Statement (Introduction): a 1 line company description only the essence of your hotel (not 2 lines or a paragraph). It explains why you are in business or which huge need you are solving, that currently is not being met. For example in the case of Qbic Hotels “Moving modular hotels into under-utilized real-estate to reduce build-out cost and time.” 
• Objectives : What do you hope to accomplish (i.e. “Reach an annual occupancy of 90%”).

 2. Company Analysis

More detailed information on the USPs (unique selling points) of your hotel concept.

3. Industry Analysis

Information on the current industry trends and the current state of the market and how this will impact your hotel. This is needed as investors want to be sure you really understand the hotel industry. This acts as the foundation on which decisions such as trends and developments to follow will be based.  

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4. Customer Analysis

In-depth information on your target market, including geographic, demographic, socioeconomic, psychographic, and behavioural segmentation details. It can also help you to keep up to date with the latest hotel marketing trends to understand which are the types of guests who will be staying at your hotel. Explain which features will be meeting the needs and wants of these main segments when thinking of:

Basically, how will consumers answer this question ‘Why my hotel?’

Aim to break it up to the point value can be easily communicated (do not make it too overcomplicated). Think of the following examples:

• Psychographics: interests, lifestyles, personality, values, opinions, and attitudes
• Behavioural segmentation: purchasing behaviour, level of engagement, customer loyalty
• Demographics: gender, age, marital status and education
• Geographics: location (country, state, region, city)
• Socio-economics

Any of the above examples of hotel segmentation can, if described well, be of great value to your business plan. An example of this could be a hotel located in a beach town, where you should be able to describe how demographics and psychographics differ from summer to winter time. Especially, since this example is typically known for lower demand in winter which you could be compensating for with the right hotel marketing strategies on hand.

5. Competitive Analysis

A study of your local competition or global concept competitors, with each of their strengths, weaknesses, occupancy rates and market share ( SWOT analysis ). And don’t forget the most important part; what differentiates you from them. What makes you stand out?

Ask yourself: “can I add value to a specific area”, especially when it comes to hotel-dense areas like city centres or major destinations.

6. Strategic Plan

This exists of 3 parts:

• Marketing : How exactly will you attract customers/guests? How will you position yourself? What will your message be to the different segments of your business mix? How will your direct marketing work? What will be the plan for your hotel website, SEO, SEM and SMM? Will you do offline promotion? In short, your hotel marketing strategy should cover everything there is to know about how to market your hotel.
• Distribution : Which 3rd party channels will you use and how will you manage availability? What technology will you need?
• Revenue management : What pricing and yield techniques will you use? What will your payment and cancellation policies be? Which room types will you be selling, and how will they be individually marketed? How many revenue scenarios will I create? Where can I compensate income/demand streams when necessary?

Make sure you have the capabilities to plan out a strong marketing, distribution and revenue management strategy. 

Things get complicated rather fast, and choosing to outsource hotel and revenue management is likely to give you a strategic advantage, during the planning phase, and the execution of your business plans.

7. Operations Plan

How will you run your hotel? Think of the following elements:

• How many staff and supervisors will you need? 
• What are their job descriptions/responsibilities? 
• What background and experience should they have? 
• When should they start? 
• What are your service standards?
• Will you develop manuals?
• Which supplier will you use?
• How will you manage inventory?

8. Management Team

Include the bios of your team. Focus on what uniquely qualifies you to make your hotel such a success. Having a great team is the key to success , and stakeholders will be impressed with a thorough explanation of the added value everyone brings to the table.

9. Financial Plan

Provide the start-up costs of the hotel (capital investment), the ongoing business costs, operational expenses and revenue projections for the next five years. These figures should be always based on your Hotel Feasibility Study . The KPIs to look at include expected occupancy, ADR (Average Daily Rate) and RevPAR (Revenue per Available Room).

If you are raising money , outline how much funding will be needed and when. Explain how you will generate a return on investment for investors, or when lenders will be paid back.

10. Key Milestones

These are the most important achievements which once they have been completed, will make your hotel more likely to succeed. Think off:

• Location selection
• Permits & Licenses
• Build-out / Construction of the Hotel
• Staffing and Training
• GOP Break-even
• NOI Break-even

Each time one of the key milestones is achieved, the risk of lenders or investors decreases . And once your last key milestone is reached, the chance of success is more or less guaranteed.

11. Appendix

Provide any other relevant information here. Don’t clutter the main sections of your hotel business plan with too many details. Rather support them with attachments in this part.

Putting Your Plan into Action

Many people have great business ideas. But that really doesn’t matter. The difference between dreamers and entrepreneurs is the action mindset. Are you ready to ship your idea to the market? 

The first step is to put your ideas on paper. I hope this free sample will help you write a persuasive hotel business plan. Because no investor or lender will be interested if you cannot present a clear plan.

Follow your dreams and go for it!

Maximize Your Hotel Revenue

Uncover the hidden revenue potential of your hotel or resort.

Need help to Develop and Manage your Hotel Concept?

Our revenue management consulting experts at XOTELS have helped hundreds of hotels to develop and optimize their businesses.

With cost-effective implementations and best practices developed over years of experience, successful business for your boutique hotel, resort, B&B, aparthotel, hostel, or any other lodging concept for that matter.

Hope this template has helped you get inspired to start your own hotel business .

Best of luck in your endeavours!

Patrick Landman

PS. Get in touch with us if you need help developing and managing your hotel concept, and help bring your hotel to the next level with our hotel consulting services.

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From idea to execution: 10 sections to include in your hotel business plan

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By Lana Cook

Do you love connecting with people from all over the world who share your passion for travel? Don’t want to work a typical 9-5 job and instead want to build a business where every day is different, and you own your schedule?

Starting a hotel business is a dream many entrepreneurs have, but it can be a daunting venture to start. A hotel business plan is a critical first step for business owners to turn their dreams into reality. A strategic plan allows one to study the hotel industry, identify their hotel’s unique point of view, and outline how exactly they will reach their goals.

Read on to learn more about the ten sections to include in your hotel business plan, tips for creating an effective plan, and key things you need to start your new hotel business.

Ready to get started creating your plan? Download our hotel business plan template.

What is a hotel business plan?

A hotel business plan is a detailed document that identifies your business’s goals, objectives, and strategies for success. It includes market research and a roadmap for building and operating your business.

Why do you need a hotel business plan?

Studies show that entrepreneurs who finished their business plan were twice as likely to succeed in growing their business than those with no plan. A hotel business plan:

• Helps you identify whether you have a viable business idea
• Provides a detailed roadmap on what you need to accomplish and why
• Gives potential investors insight into your business idea and confidence that you can be successful
• Keeps you on track as you start to execute the different tactics outlined in your plan
• Identifies critical milestones for you and your team to reach

Your plan does not have to be static and should change over time as your business grows and evolves. Your first draft is a starting point to help guide your strategy and instill confidence in potential investors.

10 sections to include in your hotel business plan

Whether you’re starting a small boutique hotel, a cozy B&B, or a 5-star resort, you will need to address the following sections in your hotel business plan.

1. Executive summary

An executive summary is the most essential part of your business plan. It should concisely explain the purpose of your business and why it will be a success.

Include your mission statement explaining why your hotel exists and its overall goal. For example, Capella Hotels & Resorts ’ mission is to combine tradition, discovery, individuality, and twist of the unexpected to create the perfect stay for each guest.

You should also include your vision statement that clearly describes your hotel’s purpose for being in a single sentence. For Capella Hotels, its vision is to embody excellence in the craft of hospitality.

We recommend writing your executive summary as the final stage, as it should summarize the goals and objectives laid out in your plan.

2. Company analysis

Your company analysis is where you can dive into your hotel’s competitive advantage. Ask yourself what makes your hotel unique . Why would guests want to stay with you instead of your competitors?

In this section, identify your brand’s identity and the goals and objectives you want to accomplish. Outline how many rooms and room categories your property will have. For example, will you offer a hybrid hospitality model with dorms, single rooms, and suites? Explain what ancillary revenue sources you’ll offer, like in-room food and beverage options, welcome drinks, or airport shuttles.

Use storytelling to communicate your excitement and passion and make it clear what your hotel will bring to the hospitality industry that hasn’t been done before.

3. Industry analysis

As a business owner, you must be prepared for forces outside your control. You will need to conduct a market analysis that looks at the hospitality industry to identify micro and macro trends that may impact your business. Look at:

• Economic trends
• Environmental trends
• Political trends
• Global health trends
• Technology trends

For each trend, identify how it will impact your business and ways to mitigate risk or take advantage of opportunities.

For example, digital check-in technology has increased across the hotel industry with the rise of tech-savvy guests, new innovative software providers, and labor challenges. Therefore, consider what guest experience solution you’ll include at your hotel.

In addition to trends, look at the history of the hospitality industry, its current size, and how it’s expected to grow in the short and long term. This research will impact the rest of your plan, especially your marketing and financials.

4. Customer analysis

What type of hotel guests do you want to attract? It’s impossible to please every kind of guest, which is why it’s important to identify your target market . Once you know who you want to stay at your property, you can develop amenities, services, and marketing materials to attract these guests and deliver exceptional experiences .

Ask yourself:

• What type of guests do I want? Business or leisure travelers? Retirees or Gen-Z?
• What demographics? Age, gender, marital status, etc.
• What are my target market’s interests? Water sports, hiking, relaxation, museums, etc.
• What does my target market value? Sustainability, contactless technology, personalized service, localized experiences, etc.

This section will help you formulate the guest experience to ensure that expectations meet reality .

5. Competitive analysis

The competition you face will vary depending on where your hotel is located. In this section, you should conduct in-depth competitor research to understand how your hotel will compare. Identify your five major competitors — ideally, three direct competitors you will be competing with upon opening and two aspirational competitors you can emulate as you grow your business.

Conduct a SWOT analysis based on your competitors to look at:

• Strengths . Where does your property excel in comparison to competitors? Why would travelers pick you? Price, amenities, location, technology, etc.
• Weaknesses . Where does your property fall short in comparison to competitors? Price, amenities, location, technology, etc.
• Opportunities . What industry trends can you take advantage of? What local events or partnerships can you capitalize on?
• Threats . What are the biggest threats facing your property? War, travel restrictions, recession, etc.

A thorough analysis can help solidify your competitive advantage and develop a contingency plan for how you will deal with your weaknesses and threats.

6. Marketing plan

Without demand, there is no business. A hotel marketing plan outlines the channels you’ll use to reach your target audience to drive bookings. Your marketing strategy should include three key channels:

1) Paid media . Paid advertising to promote your property and drive bookings. This includes online travel agencies (OTAs) , search engine marketing (SEM), retargeting, and metasearch advertising.

2) Owned media. The content  you create, like your hotel website , social media channels, blog posts, and SEO.

3) Earned media. User-generated content created by third parties like media coverage or online reviews.

7. Operations plan

How do you plan to run your day-to-day operations? This section of your plan will outline all of the key tasks and responsibilities of your team and what exactly your hotel will offer. Consider:

• The number of staff and supervisors required
• Job descriptions and responsibilities
• Your service standards (check out our downloadable SOPs for some inspiration)
• How you’ll manage your inventory
• What hotel technology solutions will you need? PMS, channel manager, booking engine, payment terminal, revenue management tools, guest engagement software, etc.
• What services and amenities do you want to offer? Room service, bar, restaurant, pool, spa, wellness center, etc. 

Detail your short and long-term operational plans and the stakeholders involved for each area.

8. Management team

Whether or not you’ve hired your team yet, this is one of the most important sections potential investors will look at. Make sure to outline the key personnel you will require and their roles. 

In general, these are the following roles you’ll want to outline:

• Hotel management (general manager, front office manager, housekeeping manager, maintenance manager, revenue manager)
• Hotel sales team
• Housekeeping staff
• Front office staff
• Maintenance

Depending on the size of your hotel, your team will vary. Identify the team members you need to open and your hiring plans over the next five years.

9. Strategic plan

Hoteliers must be strategic in optimizing occupancy rates across seasons to maintain revenue. As part of your strategic plan, identify how you will manage:

• Pricing – what room types will you offer, and how will the pricing vary?
• How will you maintain consistent occupancy throughout the high and low seasons? Will you adapt your pricing and marketing strategies?
• How will you conduct revenue management ? What type of rules/alerts will you use to adjust rates? Will you use technology to help with revenue management?
• What will your online reputation management strategy be? How will you collect and respond to online reviews?
• What will your distribution mix look like? How will you drive reservations across a variety of channels?

10. Financial plan

Your financial projections are the most challenging but arguably the most crucial part of your hotel business plan. In this section, you should include the following:

• Start-up costs. How much money will you need from lenders to operate your hotel? Consider business licenses, furniture, down payments, etc.
• Operating costs . How much money will you need to keep your business running? Consider staffing costs, guest acquisition costs, mortgage payments, utilities, SaaS payments, etc.
• Income statement . What will your revenue, expenses, and profit be over the first 3-5 years of business?
• Cash flow projections . How will cash flow in and out of your business? Show what capital investment you’ll need to start.
• Balance sheet . Identify your assets, liabilities, and equity.

If you’re looking for a potential investor, your financial plan will be the section they care about most. Here, you must prove how your business will provide a return on investment. Don’t forget to include an Appendix that shows more detailed reporting and financial figures.

8 tips for creating an effective plan

1. Start with the section that excites you the most! Covering all the topics outlined above can feel overwhelming, so don’t feel pressured to go in order.

2. Reach out to a business owner you admire. No matter what type of business you’re starting, getting advice from another business owner is always helpful. Reach out to a successful local business owner to see if they’d be willing to share some insights they learned along the way.

3. Be concise. While there’s a lot to cover, you must be concise in each section of your plan. Include any additional research or documentation in the appendix to keep your business plan clean.

4. Try to avoid industry jargon. Depending on what type of investor is reading your plan, they may find jargon irrelevant and distracting.

5. Ensure you have a clear competitive advantage. You should be able to state in one sentence what makes your property unique. This unique selling point (USP) will be prominent in all of your marketing materials.

6. Set SMART goals. Setting specific, measurable, achievable, relevant, and time-bound goals is important to stay organized and on track to reach milestones.

7. Don’t forget about your plan. You will have spent hours developing your plan, so make sure you use it! Reference your plan as you build and grow your business , and remember that it’s ok if things change.

8. Illustrate your passion. Communicate why you want to be a part of the hospitality industry. Passion is contagious and gives investors more confidence that you will work hard to achieve your dreams.

What do you need to start a hotel business?

Ok, so you’ve read through this article and are now wondering — what’s next? Ensure you have the following items on your radar to start your business.

• A vision. Know exactly what kind of business you want to build (a quaint bed and breakfast is very different from a large-scale resort).
• A business plan. Stay on track with a well-developed business plan.
• A location. Decide if you want to build a new property or renovate an existing hotel.
• Capital. Do you need to raise an upfront capital investment? Remember that new businesses usually aren’t profitable for the first few years and will need cash flow to pay for expenses.
• Business licenses & permits. Depending on the type of property and its services, you’ll need an occupancy permit, alcohol license, food service license, sales tax license, etc.
• Technology. Choose technology to help streamline operations and earn more revenue.
• Furniture & equipment. You must furnish your property with the proper furniture, electronics, appliances, etc.
• Staff. Take time hiring staff you can trust and who understand your hotel’s brand and vision.

Final thoughts

Your business plan provides the foundation for your new business and outlines the next steps in the journey. Ensure you fully understand the market and competitive landscape to enter the industry prepared for the future. Start slow and invest in the right people and technology to support the growth of your business.

Looking to start a hotel? Download the technology guide. Download now

About Lana Cook

Lana Cook is a Content Writer at Cloudbeds where she is able to combine her love of writing and passion for travel. She has spent the last few years writing about all things technology and the ways in which it can be used to help businesses thrive. When she’s not busy writing, you can find her checking out the latest movie or searching for a new TV show to binge.

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Plan Templates

15+ hotel business plan samples – pdf, word.

Hotels are one of the most lucrative businesses one can get into. They are especially profitable if the hotel business plan in question is located in a busy city or near a popular tourist destination. Being part of the hospitality industry, you will never run out of customers as long as your hotel is managed properly. To run your hotel plan profitability, you must have a proper business plan that will help you dance your worries away. We have various hotel business plan templates applicable for various related businesses and accommodations such as a startup mini hotel, guest house motel, 5 star resort lodge, 3 star spa, and boutique, etc. Keep scrolling!

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Business Plan Sections

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Free Start-up Boutique New Hotel Sample Business Plan

General FAQs

1. what is a hotel business plan, 2. what is the purpose of using a hotel business plan, 3. what should a hotel business plan include.

• Executive summary
• A detailed sample analysis of your company and the work you do
• Industry and market analysis
• Client and customer evaluation
• Your competitors and other sources
• Marketing and operation plan, etc.

4. What Is a Successful Business Plan?

5. how do you write a hotel business plan.

• Operations : explain how your organization will operate daily
• Management : mention your management team
• Financial details : this is where you mention all key finances
• Project planning : define all the targets you want to hit
• Appendix and other details.

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Business handbook template, sample startup plan template, hotel business plan template, sample hotel business plan template, resort hotel business plan template, hotel catering business plan template, luxury hotel business plan template, new start-up boutique hotel business plan template.

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Opportunity for Investment in Ethiopia’s Hospitality Sector

Do you wish to invest in Ethiopia’s hospitality sector? With a population of over 100 million people, Ethiopia is Africa’s second most populous nation. Just like many other countries on the continent, Ethiopia has gone through various economic and social challenges. Ethiopia is one of the countries in Africa that has begun to realize the full value of its economic potential.

In the recent years, Ethiopia’s GDP has been experiencing a positive growth. Known to primarily depend on agriculture as the country’s main economic mainstay, Ethiopia is now focusing more on hospitality in a bid to reduce over-reliance on agriculture. Seeing as hospitality is also the new economic frontier, there are hopes that it will steer the country’s economy in a positive direction.

The Ethiopian economy has continued to realize great potential thanks to the growth of its hospitality industry. The increased number of tourist arrivals currently being witnessed is a result of strategic marketing efforts by industry players and government-led policies to ensure the country’s tourism potential is fully realized.

While opening a hospitality expo in Addis Ababa, Ethiopia’s President, Dr. Mulatu Teshome reiterated the need to continuously improve the tourism and hospitality sector, for it is a key economic pillar for the country. “For this reason, our government has given due attention to the development of the sector. To exploit its amazing tourism potential, Ethiopia has committed to provide support to the private sector for the development of tourism and hospitality service”.

According to the President, Ethiopia is an extremely privileged country- given it is the seat of AU, UNECA, and other global organizations. Dr. Teshome also emphasized the need to make sure that more investors are being lured into the country to provide world class hotels and hospitality services.

Did you know Addis Ababa, following New York and Geneva, hosts the third-largest diplomatic community in the world? The presence of many international organizations such as African Union, UN affiliated organizations, and other global organizations have played a key role in developing Ethiopia’s hospitality sector.

An ongoing partnership between the government and private hospitality sector players is aimed at mapping out the country’s tourism facilities for further development. In addition, intensified investor interest is expected to boost Ethiopia’s hotel capacity to over 58,000 hotel rooms in the next few years. Twelve international hotels are expected to open in Ethiopia, which will add another 2,400 hotel rooms to meet the rising demand.

According to CEO of Jumia Travel, Paul Midy, “The Ethiopian hospitality industry has grown quickly over the last few years, and there remains a lot of untapped potential. Exploiting these opportunities, with the help of new technologies and accommodation service providers, will support the country’s initiative to become one of Africa’s top five destinations in the coming four years. The challenges are abundant, but the future is inspiring. We look forward to bringing the intended growth and progress into reality”.

There is no doubt that Ethiopia’s hospitality sector is a force to reckon with. Unlike the past where the industry was on its knees, there is renewed effort to unearth an untapped potential. There is a new goal to make Ethiopia not only one of the best destinations on the African continent, but globally as well.

Factors That Have Contributed to the Growth of Ethiopia’s Hospitality Sector:

The recent milestones realized in the industry are attributed to close partnerships between various industry stakeholders, in addition to a formulation of growth-driven policies.

Improved Security and Peace

Ethiopia has had its own share of political and social upheavals in the past that both destroyed social cohesion and threatened peace. However, a lot of strides have been made, and the country is now generally peaceful and politically stable. As a result, the number of tourists visiting the country has gone up. This has paved way for the formulation and implementation of the tourism transformation plan. Given the country’s present peaceful environment, the Ministry of Culture and Tourism has put in place a strategic plan to make Ethiopia a top tourist destination by 2020.

Ethiopia’s resolve to fully implement its hospitality policies has also created more investment and job opportunities. The government knows too well that where there’s no peace, tourism can never thrive. Therefore, the authorities have come up with various security strategies and policies to ensure the country’s peace is maintained at all costs. The conducive environment has seen a rapid growth of the hospitality sector; this relies heavily on security.

Due to good security, the hospitality industry in Ethiopia continues to grow, and there is an overall positive economic impact attributed to increased foreign revenue. Entrepreneurs wishing to invest in Ethiopia are assured of good returns, especially in 4-star and 5-star establishments, as long as their facilities meet diplomatic standards. There are also plenty of opportunities to be explored in guest houses and luxury lodges.

The government has come out to fully support the growth of the hospitality industry; therefore, investors are assured of doing business in a safe environment . In recent years, there has also been massive infrastructure development aimed at opening up the country’s hospitality industry.

Government Initiatives

The Ethiopian government has worked tirelessly to formulate good policies. This is to ensure that the country’s hospitality industry positively contributes to overall economic growth. The current trends witnessed in the industry reflect the government’s efforts to boost hospitality as a priority economic sector.

To cater to the increasing demand of local and international travelers, Ethiopia has started implementing a tourism strategy aimed at creating more investments in franchise hotels and luxurious facilities. The increase in tourist and conference guest numbers helped Ethiopia’s hospitality income revenue rise from 17 billion birr (USD 724 Million) in 2012, to 18.7 billion birr (USD 797 Million) in 2013, and 22.2 billion birr (USD 946 Million) in 2014.

The introduction of tax relief and land incentives has helped to boost investor confidence as well. Because of these measures, the number of hotels and lodges across the country has increased, which creates more employment opportunities. In order to boost reputation and professionalism, the Ministry of Tourism is currently undertaking the process of issuing quality assurance certificates to 2,620 companies operating within the tourism and hospitality sector. In 2016, the Ethiopian government granted 1,800 permits to new investors to build luxury hospitality establishments.

In addition, the government is actively working with stakeholders in the finance industry to offer flexible bank loans to hospitality investors seeking to invest in Ethiopia. The travel and tourism sector currently contributes approximately 1.2% to the country’s GDP, but if current growth trends are anything to go by, analysts predict there will be at least 4.8% contribution to GDP in 2024.

The Ethiopian government has also simplified the process of issuing investment permits, thus attracting more international hospitality brands to the country. With an increase in the number of investors, the government has successfully addressed the accommodation deficit by allowing more hotels to be built to adequately cater to the needs of various travelers.

It’s worth noting that the government has been able to cover many milestones, especially in regards to implementing transformational policies and working closely with the private sector. There is no doubt that Ethiopia is keen to take the hospitality industry to the next level and compete with Africa’s hospitality powerhouses such as South Africa, Namibia, Kenya, Egypt, and Ghana. The ultimate goal is to have Ethiopia rank among the top 5 tourism and hospitality destinations in Africa.

Boosting the Airline Industry

Ethiopia hosts the third-largest diplomatic community in the world. For this reason, Addis Ababa has become a busy regional hub for international conferences and seminars. Conference tourism is set to become a major attraction in Ethiopia as more organizations set up offices in the country. Addis Ababa already has plenty of foreign missions, international aid agencies, and NGOs based in the city. In addition, conferences held at the African Union (AU) and United Nations Economic Commission (UNEC) bring in a lot of foreign revenue to the economy.

Today, more international airlines have direct flights to Addis Ababa from various destinations across the world. The Ethiopian government has also embarked on an ambitious plan to expand the national career of Ethiopian Airlines, which is a well respected airline brand across Africa and beyond.

​After​ ​winning​ ​major​ ​aviation​ ​awards, Ethiopian Airlines has played a key role in boosting the country’s hospitality prospects. Some of these awards include: 2017 African Airline of the Year Award, 2017 SKYTRAX World Airline Award for Best Airline in Africa, and 2016 “The Rising Star Carrier of the Year” Award among others.

The government’s goal is to see Ethiopian Airlines bring in more tourist numbers, while opening up additional international routes. Furthermore, Addis Ababa International Airport is currently undergoing massive expansion that will increase its capacity to accommodate 20 million passengers annually by the year 2019.

Destination Marketing Campaigns

Not many people ever imagined Ethiopia could rise to become a famous travel destination; however, sustained marketing initiatives by the Ethiopian Tourism Organization (ETO) have yielded impressive results as industry players continue to vigorously market Ethiopia’s diverse tourism products. Facilities range from hotels and parks, to numerous historical sites. A number of hospitality conferences, trade shows, and exhibitions have been held both locally and internationally to market Ethiopia as a travel destination.

Addis Ababa ranks globally with the highest concentration of foreign diplomatic missions. This has created a huge market for other hotels and players in the hospitality industry. There is a scramble for the few top-notch accommodation facilities as organizations fly in high-ranking executives for meetings and conferences. Although substantial progress has been made, the number of branded hotels is still low. In order to attract the investors needed to bring the industry up to par with other top African and global counterparts, experts advise the adoption of intense marketing strategies.

Some of the hospitality events that have taken place in Ethiopia include MICE’s (The 2016 Meetings, Incentives Travel, Conferences and Exhibitions) East African International Forum and Expo, and 4th Hotel Show Africa’s 2016 Hospitality and Tourism Investment Trade Show. Both events were organized by Ozzie Hospitality and Business Group, one of the leading hospitality firms in Ethiopia, and took place at Millennium Hall in Addis Ababa.

One of the pillars used to market Ethiopia is emphasizing the fact that twelve visitors are guaranteed value and good quality facilities while on tour. Travelers always want to feel like they get value for their money irrespective of the type of services they choose. With the increasing number of diplomats, corporate travelers, and leisure tourists, Addis Ababa, and Ethiopia in general, is expected to be a top African tourist destination in the coming years. The untapped tremendous tourism potential has been unearthed through strategic marketing ventures.

The main customer of Addis Ababa’s hospitality market is the corporate sector whose demand for top-notch hospitality facilities has increased. Previously, due to accommodation shortages, many conference and leisure tourists had to opt for 3 star unbranded hotels whose services were below internationally accepted hospitality standards.

Growth of ICT

The growth and recent success of Ethiopia’s hospitality industry has been attributed to the adoption of modern ICT (Information Communication and Technology) policies. ICT has indeed hugely transformed the hospitality industry in Ethiopia. Ethio Telecom, a state-owned organization, has been spearheading an ICT driven policy in close conjunction with technology and hospitality players.

ICT has empowered Ethiopia to sell its tourism products on a global platform, which allows both investors and visitors to take notice of Ethiopia’s hospitality industry. Hospitality technology platforms such as the Jumia Travel Platform have helped over 600 Ethiopian hotels advertise their facilities online. Even though internet penetration is still relatively low, Ethiopia has made great strides in rolling out technology infrastructure. This move has helped to support many of the hospitality industry’s day-to-day operations.

Ethio Telecom is currently working on boosting wireless telecom coverage from 64% to 90%, as well as increase the number of internet users to 20% in the next 5 years. Certain initiatives, such as the e-government strategy launched in 2011, have also helped Ethiopia to upgrade its technology and internet infrastructure.

Additionally, the Ethiopian government is building an “ICT Park” whose aim is to bring together numerous multi-national ICT firms. It is expected that this move will see more software developers, business process outsourcing firms (BPOs), incubators, system integrators, and other ICT industry players invest in Ethiopia. Ultimately, key sectors such as the hospitality industry stand to directly benefit from these ICT initiatives.

In conclusion, the hospitality industry offers numerous opportunities for investors looking to be part of this growing industry. The industry has a wide service sector that covers aspects like accommodation, transportation, and event planning within the tourism sector. A number of key related services including fine dining, sporting activities, and leisure facilities, such as spas and entertainment, have gained momentum. Ethiopia’s tourist peak seasons range from November to January, and July to August. Africa is the leading source of tourists to Ethiopia at 31%, followed by Europe at 30% and North America.

Ethiopia’s resolve to boost the hospitality sector has significantly increased investor confidence. For instance, in 2016, Ethiopia had only two major international hotel chains set up in the country: Ramada and Marriott Apartment Hotel. This number has since grown, and there are currently a few international hotel chains under construction- Pullman, Wyndham Hotel Group, AU Grand Hotel, Crowne Plaza, Best Western, and Accor Group among others.

Upon realizing that Ethiopia is an untapped market, many global hospitality chains have started setting up their establishments. The growth of Addis Ababa as a regional business hub has greatly spurred hotel numbers to an average rate of 60% bed occupancy.

Authored By: Steve Siboe

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The Hotel Industry in Ethiopia: The best is yet to come

Third only to Brussels and Washington DC, Addis Abeba is home to 118 diplomatic missions accredited to both the govern¬ment in Ethiopia, the AU and the UNECA. But it is a city which has only three international chain and six internationally branded hotels. For the hotel industry in Ethiopia, the best is yet to come

Kalkidan Yibeltal

When the Sheraton Hotel Addis Abeba, a member of the Starwood Hotels & Resorts Worldwide Inc., was opened in February 1998, it marked the first of such investment the city had to enjoy in nearly three decades – the only other global name to precede it, Hilton Addis Abeba, was opened in 1969. The years in between were, unfortunately, relegated to dis¬poroportional insignificance in the development of the hotel industry.

  Although a number of other hotels have dotted the city since the opening of the Sheraton, the only five star hotel in town, yet, no one can argue (rightly) that they belong to the same league with the above two, or could sufficiently meet the demands of a city that has been home to a number of dip¬lomatic missions over the years, including being the seat of the headquarters of the then Organization of African Union (OAU), now the African Union (AU) and the United Nations Economic Commission for Africa (UNECA).

  In mid 1990s, lack of hotel infrastructure in the city was a fact well exploited by those who wanted to see the OAU relocated permanently to elsewhere in the continent. Until the case was once and for all settled with the African Union Constitutive Act of article 24/1 which declared “the head¬quarters of the Union shall be seated in Addis Abeba in the Federal Republic of Ethiopia,” there had been at least four attempts to move the seat of the continental body out of Ad¬dis Abeba.

  Whilst the country had been busy experimenting with an array of political ideology – from feudalism to socialism to revolutionary democracy, chosen by successive governments since the late 19th and early 20th century, the hotel industry throughout the country remained regrettably muted. Even the onset of Sheraton Addis, the first hotel in the entire conti¬nent to join the luxury collection, failed to inspire an immedi¬ate follow up.

  Another decade was needed for that inspiration to come in the form of the third Ethiopian Millennium observed in September 2008. Overestimated as the beginning of a new and bright era for the nation, an overall analysis of the fruits of much of the promises thrown out during the year-long cel¬ebrations may not offer a glamorous portrait. Nevertheless, it undoubtedly left its mark on Ethiopia’s hotel industry, which took off the ground since then.

Agents of change, and the ups and downs

  Benyam Bisrat is a cofounder and general manager of Jupiter International Hotels, a local firm that runs two hotels around Bole and Kazanchis districts, where many of the star rated hotels are located. He points towards his own firm as an example of investors flocking into the sector from differ¬ent businesses. “In Jupiter Business Group, we were engaged in various sectors like general trading. Then six years ago we wanted to diversify and set our eyes on building hotels. In a similar fashion business men and women from sectors as varied as construction and real estate [and] agribusiness are turning their attentions on the hospitality industry,” he says. The main reason for this, according to him, is the fact that the growing demands of the industry are unmet for the large part.

  But that demand is not only unmet, but disproportionally exploited by opportunistic businesses. According to Elias Kebede, a veteran of the industry with years of managerial experience in some of the top hotels in and outside of the country, there are a number of businesspeople who just took an existing building constructed for another purpose and tried to make a hotel out of it. “What they saw was a feasible busi¬ness. And nothing else matters. This is one of the pitfalls that had and still have to be overcome,” Elias told Addis Standard.

  For Workinesh Getachew and Asfaw Amdie, a couple who own a newly opened Washington Hotel, located opposite the European Commission Office, it is essential to know the particularities any business presents before getting into it. Running an Ethiopian restaurant in Washington DC for about thirty years, they claim to know every twist the industry brings forth. “There isn’t one size fits all guideline in doing business. This works specially in the hospitality industry. It is not a product you are offering, it is a service,” says Workinesh. But for Elias, those who decided to develop new hotels when the opportunity availed itself were more prudent in their spending than meeting certain standards such as fire exists and parking. “Most of the hotels that were built five or six years ago didn’t have bedrooms more than sixty. There was uncertainty. It was only later that investors began to dare in the amount and size of their investment.”

  Owing to that a number of hotel owners are now trying to adapt to the changing times by undergoing massive expansions as well as quality improvement, according to Benyam, who is also the chairperson of the Board of Directors for the Ad¬dis Abeba Hotel Owners Trade Sectorial Association (AHA). “Most of the private hotels from way back were, relatively speaking, small scale and of poor quality. The owners wanted to join the caravan. So many of them are trying to rebrand themselves now,” he told this magazine.

Of tourists… According to Ebisa C. Gobena and Andualem H. Gudeta of Awash International Bank, whose study “Hotel Sectors Investment in Ethiopia” is published on Journal of Business Management in 2013, the hotel industry in Ethiopia is signified by a substan¬tial gap between demand and supply. This creates a big business opportunity for those planning to enter into the sector. “The total number of international tourists arriving in Ethiopia is steadily increasing. As a gateway to all inter¬national inbound, outbound and transit tourists/passen¬gers, Addis Abeba has been taking the lion’s share in the country’s tourist arrivals hosting an estimated 95-99% of the total international tourist arrivals,” they said. Being a popular conference venue is also helping the city attract more visitors each year. “Conference tourism has a great potential and is poised to gain greater significance.”

  But according to data obtained from World Hospital¬ity Group, Ethiopia has only six internationally branded hotels with just 990 rooms, a fact that alarmed Tewolde Gebre Mariam, CEO of Ethiopian Airlines, who told ho¬tel owners at the inaugural ceremony of the Africa Hotel Investment Forum (AHIF) 2014 back in June that “this is not acceptable.” Nigeria, for example, has 40 internation¬ally branded hotels with 6614 rooms followed by Moroccowhich has 29 hotels and 4828 rooms. Out of the ten countries in the list, Ethiopia is the ninth, second only to Senegal, which has five internationally branded hotels and 914 rooms.

  “[Ethiopia’s] overall growth and the continued progress in the tourism industry is forecast by the World Travel & Tourism Council to be 4.8% per annum over the coming decade. Increas¬ing the supply of high-quality, top-end hotel accommodation through hotel construction is necessary for improved competi¬tiveness and the economic success of the sector,”said Matthew Weihs, Managing Director, Bench Events.

  In July this year during a forum on the development of tour¬ism in Ethiopia, Prime Minister Hailemariam Desalegn vowed to reverse this unfortunate trend and help Ethiopia benefit from the tourism sector. It was to reduce this dilemma that two organs, the Tourism Transformation Counsel and the Ethiopian Tourism Organization were established. The former provides leadership and set guidelines for the country’s tourism market¬ing initiatives while the later serves as a secretariat for the for¬mer. The two new offices are tasked to transform the industry as the country aims to earn around US$150 million in 2014/15 from the sector.

It is not the building that makes a hotel a hotel. It is the flawless combination of the right people, the right prices and the right technology providing an unforgettable service

Ethiopia’s Growth and Transformation Plan (GTP), a five year grand plan that is set to expire in 2015, targets one million annual inbound tourist arrivals by the year 2014/15. In the same manner, the Ministry of Culture and Tourism has a vision to make Ethiopia one of the top five tourist destinations by 2020. Despite an increase in the number of tourist arrivals, however, this strategic target “seems unlike¬ly to be achieved with the current rates of inbound tourist arrivals in the country,” say Ebisa and Andualem.

A report released in June 2014 by Fast Market Research, a distributor of market research and business information, states that the number of domestic trips within Ethiopia has reached 8.1 million people while international trips were merely more than 660 000 with the main source coun¬tries being China, the US, Nigeria and Sudan. The number showed a 12% increase from the previous year. For a coun¬try which has its own fair share of historical, cultural and natural attractions in the continent, and is one of the safest destinations, this is not a performance to pride with. …diplomats Third only to Brussels (185) and Washington DC (176), Addis Abeba is home to 118 diplomatic missions accredited to both the government in Ethiopia, the AU and the UN¬ECA, which adds to the increasing trend in the number of conventions held year in, year out.

  One familiar month when Addis Abeba becomes crowded with diplomats, lobbyists, journalists, and aid workers is the month of January, when the AU hosts its bi-annual summit for heads of state and government. The 86 hotels, accord¬ing to Ministry of Culture and Tourism, and 118 B & B Inns, and 18 specialty lodgings, according to Trip Advi¬sors, become utterly short of the demands, forcing confer¬ence participants to book at expensive lodges and resorts outside of the city. Although the January AU summit is the landmark of huge gathering in the city, Addis Abeba is never short of other small and medium range regional and international conferences. “This unfortunate gap of demand and supply often leads to not only unethical exploitations by hotels of desperate customers, but also the provision of substandard service which forces many customers to think twice before boarding a flight bound for Addis Abeba,” said Elias. …and the quest for professionalism According to unofficial estimates from the AHA, approximately one hotel joins the market every month and that number may rise up to 1.5 hotels a month in the coming few years. Thanks to both local and international architects commissioned by devel¬opers, a number of dazzling buildings are giving the city a new look. However, there are cases in which the scene behind the glamour is not so attractive.

  “It is not the building that makes a hotel a hotel. It is the flawless combination of the right people, the right prices and the right technology providing an Projection of Tourist Arrival (projected and unsatisfactory demand) unforgettable service,” says Elias. Like many other sectors in the country, the hotel industry is a sector suffering from a lack of professionalism.

“Our main problem has been finding the right people,” admits Benyam. “It is a sector with a serious deficiency when it comes to human resources.” Although state universities like Hawassa University in the south have started providing un¬dergraduate degree programs in catering and tourism, many of the graduates find their classroom experiences useless when they come in contact with reality. The government in Ethiopia is busy building enormous infrastructure projects that will undoubtedly have a tre¬mendous effect on the industry. What that doesn’t change, however, is fill the human resource gap. “We are naturally hospitable people. It shouldn’t be hard to train us to be hospi¬table professionally,” says Benyam. In his study “A Critical Research on the Major Challenges of the Hospitality Industry in Ethiopia,” Alelign Aschale of the Addis Abeba University categorically identifies human resource management and worker turnover as major prob¬lems. “An excellent hospitality business cannot be excellent in its operation and service without professional employees in the field. What is observed [so far] in the hospitality in¬dustry is employment based on kinship, ethnicity or religion; paying very low wages and salaries,” he says.

  Some hotels try to tackle that problem in different ways. “We have set up a regular training program. We train our workers to uplift them to our standard. A little disregard to the detail can affect the whole experience,” says Benyam. As Benyam sees it the sector is in the right track and if the right measures are to be taken it can take the nation to a great destination. Ebisa and Andualem see the industry as a bridge linking other industries to the local market. “The [hotel] industry is in interface with other sectors such as ag¬riculture, restaurants, handicrafts, infrastructure and trade.”

  Whilst the country had been busy experimenting with an array of political ideology – from feudalism to socialism to revolutionary de¬mocracy, chosen by three successive governments in those years, the ho¬tel industry in the capital remained regrettably muted

Tip of the iceberg For now, the more than 30 heads of state and government who will be in Addis come January have to rely, once again, on the only five star hotel in town, the Sheraton Hotel Addis, which lies between two palaces, the National Palace and the presidential Menelik Palace. It has 294 deluxe guestrooms including 33 suites, 11 conference rooms covering up 1500 square meters of function space in a five storey sandstone building. Within a walking distance is found the latest addi¬tion of global chain, the Radisson Blu, part of the Rezidor Hotels Group which joined the market in 2010 with 204 rooms and 16 suites and prides itself as the “first class busi¬ness hotel”. Marriot International Inc., which just became one of the largest hotel companies in Africa after its acquisition of South Africa’s Protea Hotel Group on April 2014, announced its plans of opening 40 additional hotels in 13 African countries including Ethiopia by 2020. It has already signed a franchise agreement with a local firm, Sunshine Construction, to man¬age a Marriot Executive Apartment for extended stay travel¬ers and another branded hotel scheduled to be open in 2014 and 2015 respectively. And in Sep 2014, the Intercontinental Hotels Group (IHG) has signed a management agreement with Tsemex Hotels and Business Plc to develop Crowne Pla¬za Addis Abeba, a deal which marked the entry into Ethiopia of IHG. But given the burgeoning potential in this country of 90+ million odd populations, that is just the tip of the iceberg. For Alex Kyriakidis, President, Middle East & Africa, Mar¬riott International, one of the most critical elements for more international chain hotels to come to Ethiopia is “choosing the right local partner…because it gives an international brand the weight of developed market experience with local know-how on the ground. The partnership decision is more than just market experience though. It has to be a fit of business cultures and values, like-minded industry leadership thinking and – in the service industry – a similar commitment to flaw¬less service and brand standards.” 

Photo: The Nami-Tiwi Beach Resort in Kenya

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The Booming Hotel Business in Ethiopia

By Staff Reporter

According to Ethiopian Ministry of Finance and Economic Development, in the current phase of the Growth and Transformation Plan, Ethiopia has planned to reduce the share of the agricultural sector in its Gross Domestic Product in favor of industry and service sectors.

The overall growth of Ethiopia’s economy has come from the expansion of the service and agricultural sectors, while the performance of the manufacturing has been relatively modest.

According to World Bank research, private consumption and public investment have been increasing, assuming increasingly important roles in recent years.

Currently, Services accounts for more than 40 % of Ethiopian GDP and the sector expansion is expected to continue across the country. Some experts believe the service sector will dominate the economy in the near future.

The growth of Ethiopia’s hotel expansion has been truly impressive. But what is the reason behind the boom service sector, most particularly the hotel business?

Tesfaye Amenu, sales and marketing Director at Elilly International Hotel, showed us the not-so-secret reason regarding the growing demand behind the Expansion of the service sector. According to him, the development in the service sector is the result of growing demand and under supply. ‘The hospitality sector is poised for further growth in the wake of increased number of inbound travelers into the country. For example, the number of hotels in Addis Ababa has tripled. The booming competition in this market could potentially double in the near future, ‘ he said.

The fact that Ethiopia being home to the third largest diplomatic community in the world, after New York and Geneva, the country, and Addis Ababa in particular, has become home to several new star hotels.

Even though most of the hotels are 3-star, unbranded hotels, with the anticipated further economic growth and the increase in international corporate entry into the market, more branded hotels are coming to Ethiopia to serve business travelers from all over the country and the world.

Conferences in the African Union and the United Nations Economic Commission for Africa have increased the demand for branded hotels, bringing foreign currency to the tourism economy. And most of that demands are for 4- and 5-star hotels which are mainly driven by demands from the aid and diplomatic community.

From Sheraton Addis Hotel, to AU Grand Hotel, Jupiter International Hotel, Radisson Blu, Intercontinental and many other hotels, Ethiopia is now the host of many international as well as local hotels with different stars status.

As one of the lead markets, the corporate hotel market on the other hand is primarily domestically driven, with a few presences of international companies.

In addition to the upcoming entry of branded hotels to Addis Ababa, there is a large stock of unbranded hotels under construction, but many are stalled, looking for investors to help them finish construction.

Associated with the hotel business is the catering business sector, which is expected to flourish taking advantage of cheap labor in Ethiopia. The catering sector has a strong job generation capacity, which by far exceeds that of the other labor-intensive sectors such as leather, floriculture and construction. Growth of this sector should therefore provide some relief to the high unemployment situation prevailing in the country today.

The country is also welcoming major investors from Africa and beyond. Carlson Rezidor Hotel Group recent management agreement with two local developers to open hotels in Bishoftu and Addis Ababa could be illustrative.

Carlson Rezidor Hotel Group signed an agreement to open a Radisson Blu in Bishoftu and the first Park Inn by Radisson in the capital city, Addis Ababa. Carlson already operates Raddisson Blu in Addis Ababa, which opened in 2011.

To increase the number of hotels and lodges, the country has encouraged investors through tax and land incentives, to bank loan arrangements. This bearing fruit with the erection of new hotels all over the country.

The Kuriftu Resort, which extended its existence from Bishoftu to Bahir Dar, is one of the talked about luxury hotels in Ethiopia. The resort’s first ever largest Water Park in East Africa reflected how the Hotel Business is creating attractive strategies through the existing of strong competition.

The capital city, which until very recently had few branded hotels, is now home to many of them, including the recently inaugurated Hyatt Hotel and Ethiopian Airlines 4-star Hotel, Bole Skylight Hotel.

More Hotels are expected to be operational in the next few years, bringing the number of branded hotels to dozens soon.

Despite the government’s commitment to hotel development and tourism to reap the full benefits of this sector, there are still unsolved issues in the Hotels and Catering Business in Ethiopia.

In a follow up article, we will talk with the Vice General Director of Catering and Tourism Training Institute to discuss these and other issues.

_____________________________ Join us on social media: Like Ezega.com on Facebook and get Ethiopian News updates regularly. Get latest Ethiopia News by following us on twitter @Ezega_Official . Follow Ezega on LinkedIn for Ethiopia Jobs and Ethiopian News Today.

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HOTEL AND LODGE INVESTMENT DYNAMICS: A LOOK INTO THE CHALLENGES AND OPPORTUNITIES IN CASE OF GOBA, ROBE AND DINSHO TOWNS, SOUTH-EASTERN ETHIOPIA

Bale Zone is known for its tourist attraction sites in Ethiopia. However, the low quality and quantity of hotels and lodges made it difficult to enjoy the maximum possible benefit from the tourists. Hence, this study focused on hotel and lodge investment challenges and opportunities in Bale Zone, the Case of Goba, Robe, and Dinsho Towns. The sources of information of were questionnaire, key informant interview; focuses group discussion, field observation and office reports. The study employed cross-sectional descriptive research design and mixed research approach. The study took 100 samples for questionnaire survey, 25 key informants for interviews and 25 focus group discussants purposively. The quantitative data were described using percentage, graphs, tables, and charts and qualitative (thematic) analysis. The findings shows that infrastructural challenges, capital limitation, low industry linkage, lack of information, lack of collaboration among different government offices, lack of government support for the sector, inappropriate tax, lack of professional skill, high collateral for loan, and lack of training on how to get and manage credit were the major challenges. Finally, promoting potential areas for hotel and lodge investment, arranging skills training for the sector, arranging a special loan option for hotel and lodge investors, initiating agribusiness projects in the study areas, developing an attractive website and diplomacy work were recommended so that foreign investors could be attracted to the sector.

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International Journal of Hospitality & Tourism Management

Selemon Thomas Fakana , Alemken Berihun

Abstract: Tourism has been emerged as one of the effective tools in eradicating poverty. Ethiopia has huge tourism potentials like natural, non-natural, historical and cultural resources. Gambella Region is one of the attractive tourism destinations located at South West of Ethiopia. But, its tourism industry development is in infant stage. Nonetheless, limited study has carried out on identifying opportunities. Hence, the main objective of this study was identifying opportunities to enhance tourism industry development in the Region. To do so, key informants from three zones, five regional offices and thirteen woredas has purposively selected based on the defined criteria. Altogether, 103 key informants were interviewed besides to field observation. The collected firsthand data were edited, categorized, arranged and organized and encoded into SPSS software version 20. Qualitative data was being analyzed in meaningful content description whereas quantitative data was being analyzed in numerical values. Findings of this study revealed that recruiting trained human power, organizing local tour guide associations, making linkage with tour operators, developing tourist guidebook, installing tourist information centers, enhancing promotion and marketing of tourism destinations, information update, improving infrastructures development, and installing accommodation deliverers are the major opportunities to enhance tourism industry development in the Region. Keywords: Tourism, Tourism Industry, Opportunities, Gambella Region

IOSR Journals

Tourism is an important source of foreign exchange, job opportunity, environmental protection and preservation of heritage. It is postulated as one of the important industries for poverty alleviation. This study was conducted in Nekemte town, Western Ethiopia to identify challenges and future potentials of tourism development in the town. Qualitative methods were applied to collecting and analyzing data. Totally, 37 respondents were selected purposively. Hence, The finding of the study indicated that safety and security, lack of promotion, infrastructures, accessibilities, low awareness of local communities, lack of trained and skilled manpower by tourism profession, low attention of local government and weak mutual support and coordination among stakeholders are major challenges that hinder the development of tourism sector in the town. The study also investigated that there are different potentials of tourism resources. However, these resources are not fully utilized and available for tourism activities. Therefore, this study forwarded that local authorities and tourism governing bodies should provide professional training, consultancy service for who interested to participate in the tourism industry, made a proper tourism development plan and strategies and link surrounding tourism resource and tourist destinations which goes with the national tourism policy. Tourism stakeholders play a pivotal collaborative role to improve the awareness of local and businesses mans to harnesses the tourism potential of the areas and promote the sector in a manner that is both financially and environmentally sustainable and increases the share of the sector in the socioeconomic development society of the area.

Sintayehu A Y N A L E M Aseres

Selemon Thomas Fakana

Yezihalem Sisay Takele

In order to achieve the objective of the study, both primary and secondary data were generated by employing qualitative (using group discussion, in depth interview, and observation) and quantitative (mainly using survey and visitor survey questionnaires) methods. Purposive and simple random sampling techniques were used to select both private and public tourism sectors and 80 samples, respectively. The quantitative data was analyzed using frequency, percentage, and mean when appropriate while qualitative data was used to triangulate and substantiate the study. The finding result shows the visitor experience on the area of transportation and accommodation is the area where Addis Ababa falls far behind. There are several areas of poor performance (supported by both visitor questionnaires during the preparation of this study). Overall, the analysis identified that the industry (the role of public and private sector for sustainable tourism development in Ethiopia) is underperforming rel...

Alemken Berihun

Tourism is a circulation of people who travel to or stay in places outside their home country. It has being believed as a major ingredient in the economic development strategy. However, various external and internal factors have been affecting the sustainable development of the tourism industry worldwide. Although Ethiopia possesses numerous natural, religious, historical, non-natural and cultural tourism attractions, economic contribution and its potential are incomparable. Shortage of tourist facilities, lack of skillful human resources, weak promotion, lack of integration and political will are the major negatively contributing forces. Although Ethiopia possesses massive tourism development potentials with its unique biodiversity and spectacular topographic features, its economic contribution to the country is unmatched. Similarly Gambella Region has endowed with tourism potentials. But, its tourism industry development is in an infant stage. Nevertheless a limited study has done...

Global Journals

Tourism is a circulation of people who travel to or stay in places outside their home country. It has being believed as a major ingredient in the economic development strategy. However, various external and internal factors have been affecting the sustainable development of the tourism industry worldwide. Although Ethiopia possesses numerous natural, religious, historical, non-natural and cultural tourism attractions, economic contribution and its potential are incomparable. Shortage of tourist facilities, lack of skillful human resources, weak promotion, lack of integration and political will are the major negatively contributing forces. Although Ethiopia possesses massive tourism development potentials with its unique biodiversity and spectacular topographic features, its economic contribution to the country is unmatched. Similarly Gambella Region has endowed with tourism potentials. But, its tourism industry development is in an infant stage. Nevertheless a limited study has done in identifying factors hindering the development of the tourism industry in the region. Hence, the current research addresses above stated problem. To do so, key informants from three zones (n=15), five regional offices (n=23) and 13 wored as (n=65) has purposively selected based on the set criteria. Altogether, 103 key informants were being interviewed besides to focus group discussion and field observation. Collected raw data were being chosen, refined, categorized, edited, evaluated, coded and entered into SPSS software version 20. Abstract-Tourism is a circulation of people who travel to or stay in places outside their home country. It has being believed as a major ingredient in the economic development strategy. However, various external and internal factors have been affecting the sustainable development of the tourism industry worldwide. Although Ethiopia possesses numerous natural, religious, historical, non-natural and cultural tourism attractions, economic contribution and its potential are incomparable. Shortage of tourist facilities, lack of skillful human resources, weak promotion, lack of integration and political will are the major negatively contributing forces. Although Ethiopia possesses massive tourism development potentials with its unique biodiversity and spectacular topographic features, its economic contribution to the country is unmatched. Similarly Gambella Region has endowed with tourism potentials. But, its tourism industry development is in an infant stage. Nevertheless a limited study has done in identifying factors hindering the development of the tourism industry in the region. Hence, the current research addresses above stated problem. To do so, key informants from three zones (n=15), five regional offices (n=23) and 13 wored as (n=65) has purposively selected based on the set criteria. Altogether, 103 key informants were being interviewed besides to focus group discussion and field observation. Collected raw data were being chosen, refined, categorized, edited, evaluated, coded and entered into SPSS software version 20. Qualitative data was being analyzed in meaningful content description whereas quantitative data was being analyzed in numerical values. Results of this study revealed that different factors like inadequate trained human resources, lack of local tour guide associations, an absence of linkage with tour operators, lack of information centers, and weak promotion of tourism destinations, weak infrastructures development, and inadequate accommodation deliverers are the major hindering factors of tourism industry development in the region.

Asrat Desta

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How to write a business plan for an Ethiopian restaurant?

Putting together a business plan for an Ethiopian restaurant can be daunting - especially if you're creating a business for the first time - but with this comprehensive guide, you'll have the necessary tools to do it confidently.

We will explore why writing one is so important in both starting up and growing an existing Ethiopian restaurant, as well as what should go into making an effective plan - from its structure to content - and what tools can be used to streamline the process and avoid errors.

Without further ado, let us begin!

In this guide:

Why write a business plan for an Ethiopian restaurant?

• What information is needed to create a business plan for an Ethiopian restaurant?
• How do I build a financial forecast for an Ethiopian restaurant?

The written part of an Ethiopian restaurant business plan

• What tool should I use to write my Ethiopian restaurant business plan?

Understanding the document's scope and goals will help you easily grasp its structure and content. Before diving into the specifics of the plan, let's take a moment to explore the key reasons why having an Ethiopian restaurant business plan is so crucial.

To have a clear roadmap to grow the business

It's rarely business as usual for small businesses. The economy follows cycles where years of growth are followed by recessions, and the business environment is always changing with new technologies, new regulations, new competitors, and new consumer behaviours appearing all the time...

In this context, running a business without a clear roadmap is like driving blindfolded: it's dangerous at best. That's why writing a business plan for an Ethiopian restaurant is essential to create successful and sustainable businesses.

To write an effective business plan, you will need to take stock of where you are (if you are already in business) and where you want the business to go in the next three to five years.

Once you know where you want your Ethiopian restaurant to be, you'll have to identify:

• what resources (human, equipment, and capital) are needed to get there,
• at what pace the business needs to progress to get there in time,
• and what risks you'll face along the way.

Going through this process regularly is beneficial, both for startups and existing companies, as it helps make informed decisions about how best to allocate resources to ensure the long-term success of the business.

To anticipate future cash flows

Regularly comparing your actual financial performance to the projections in the financial forecast of your Ethiopian restaurant's business plan gives you the ability to monitor your business's financial health and make necessary adjustments as needed.

This practice allows you to detect potential financial issues, such as unexpected cash shortfalls before they escalate into major problems. Giving you time to find additional financing or put in place corrective measures.

Additionally, it helps you identify growth opportunities, like excess cash flow that could be allocated to launch new products and services or expand into new markets.

Staying on track with these regular comparisons enables you to make well-informed decisions about the amount of financing your business might require, or the excess cash flow you can expect to generate from your main business activities.

To secure financing

Whether you are a startup or an existing business, writing a detailed Ethiopian restaurant business plan is essential when seeking financing from banks or investors.

This makes sense given what we've just seen: financiers want to ensure you have a clear roadmap and visibility on your future cash flows.

Banks will use the information included in the plan to assess your borrowing capacity (how much debt your business can support) and your ability to repay the loan before deciding whether they will extend credit to your business and on what terms.

Similarly, investors will review your plan carefully to assess if their investment can generate an attractive return on investment.

To do so, they will be looking for evidence that your Ethiopian restaurant has the potential for healthy growth, profitability, and cash flow generation over time.

Now that you understand why it is important to create a business plan for an Ethiopian restaurant, let's take a look at what information is needed to create one.

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Information needed to create a business plan for an Ethiopian restaurant

You need the right data in order to project sales, investments and costs accurately in the financial forecast of your Ethiopian restaurant business plan.

Below, we'll cover three key pieces of information you should gather before drafting your business plan.

Carrying out market research for an Ethiopian restaurant

As you consider writing your business plan for an Ethiopian restaurant, conducting market research becomes a vital step to ensure accurate and realistic financial projections.

Market research provides valuable insights into your target customer base, competitors, pricing strategies, and other key factors that can significantly impact the commercial success of your business.

Through this research, you may uncover trends that could influence your Ethiopian restaurant.

You could discover that local customers may be interested in non-traditional Ethiopian dishes, or that customers may be more likely to order take-out than to dine in.

Such market trends play a significant role in forecasting revenue, as they offer valuable data about potential customers' spending habits and preferences.

By incorporating these findings into your financial projections, you can present investors with more accurate information, helping them make informed decisions about investing in your Ethiopian restaurant.

Developing the marketing plan for an Ethiopian restaurant

Before delving into your Ethiopian restaurant business plan, it's imperative to budget for sales and marketing expenses.

To achieve this, a comprehensive sales and marketing plan is essential. This plan should provide an accurate projection of the necessary actions to acquire and retain customers.

Additionally, it will outline the required workforce to carry out these initiatives and the corresponding budget for promotions, advertising, and other marketing endeavours.

By budgeting accordingly, you can ensure that the right resources are allocated to these vital activities, aligning them with the sales and growth objectives outlined in your business plan.

The staffing and capital expenditure requirements of an Ethiopian restaurant

Whether you are starting or expanding an Ethiopian restaurant, it is important to have a clear plan for recruitment and capital expenditures (investment in equipment and real estate) in order to ensure the success of the business.

Both the recruitment and investment plans need to be coherent with the timing and level of growth planned in your forecast, and require appropriate funding.

Staffing costs might include wages for cooks, servers, dishwashers, and a manager. The restaurant might also have to pay fees for liability insurance, workers' compensation, and taxes. Equipment costs might include a commercial kitchen range, oven, and refrigerator; dishes, utensils, and cookware; tables and chairs; and a cash register.

In order to create a realistic financial forecast, you will also need to consider the other operating expenses associated with running the business on a day-to-day basis (insurance, bookkeeping, etc.). 

Once you have all the necessary information to create a business plan for your Ethiopian restaurant, it is time to start creating your financial forecast.

What goes into your Ethiopian restaurant's financial forecast?

The objective of the financial forecast of your Ethiopian restaurant's business plan is to show the growth, profitability, funding requirements, and cash generation potential of your business over the next 3 to 5 years.

The four key outputs of a financial forecast for an Ethiopian restaurant are:

• The profit and loss (P&L) statement ,
• The projected balance sheet ,
• The cash flow forecast ,
• And the sources and uses table .

Let's look at each of these in a bit more detail.

The projected P&L statement

The projected P&L statement for an Ethiopian restaurant shows how much revenue and profits your business is expected to generate in the future.

Ideally, your Ethiopian restaurant's P&L statement should show:

• Healthy growth - above inflation level
• Improving or stable profit margins
• Positive net profit

Expectations will vary based on the stage of your business. A startup will be expected to grow faster than an established Ethiopian restaurant. And similarly, an established company should showcase a higher level of profitability than a new venture.

The forecasted balance sheet of your Ethiopian restaurant

The projected balance sheet of your Ethiopian restaurant will enable the reader of your business plan to assess the overall financial health of your business.

It shows three elements: assets, liabilities and equity:

• Assets: are productive resources owned by the business, such as equipment, cash, and accounts receivable (money owed by clients).
• Liabilities: are debts owed to creditors, lenders, and other entities, such as accounts payable (money owed to suppliers).
• Equity: includes the sums invested by the shareholders or business owners and the profits and losses accumulated by the business to date (which are called retained earnings). It is a proxy for the value of the owner's stake in the business.

Analysing your Ethiopian restaurant projected balance sheet provides an understanding of your Ethiopian restaurant's working capital structure, investment and financing policies.

In particular, the readers of your plan can compare the level of financial debt on the balance sheet to the equity value to measure the level of financial risk (equity doesn't need to be reimbursed, while financial debt must be repaid, making it riskier).

They can also use your balance sheet to assess your Ethiopian restaurant's liquidity and solvency:

• A liquidity analysis: focuses on whether or not your business has sufficient cash and short-term assets to cover its liabilities due in the next 12 months.
• A solvency analysis: takes and longer view to assess whether or not your business has the capacity to repay its debts over the medium-term.

The cash flow forecast

As we've seen earlier in this guide, monitoring future cash flows is the key to success and the only way of ensuring that your Ethiopian restaurant has enough cash to operate.

As you can expect showing future cash flows is the main role of the cash flow forecast in your Ethiopian restaurant business plan.

It is best practice to organise the cash flow statement by nature in order to show the cash impact of the following areas:

• Cash flow generated from operations: the operating cash flow shows how much cash is generated or consumed by the business's commercial activities
• Cash flow from investing activities: the investing cash flow shows how much cash is being invested in capital expenditure (equipment, real estate, etc.) either to maintain the business's equipment or to expand its capabilities
• Cash flow from financing activities: the financing cash flow shows how much cash is raised or distributed to financiers

Looking at the cash flow forecast helps you to make sure that your business has enough cash to keep running, and can help you anticipate potential cash shortfalls.

Your Ethiopian restaurant business plan will normally include both yearly and monthly cash flow forecasts so that the readers can view the impact of seasonality on your business cash position and generation.

The initial financing plan

The sources and uses table or initial financing plan is a key component of your business plan when starting an Ethiopian restaurant.

It shows where the capital needed to set up the business will come from (sources) and how it will be spent (uses).

This table helps size the investment required to set up the Ethiopian restaurant, and understand how risks will be distributed between the business owners, and the financiers.

The sources and uses table also highlights what the starting cash position will be. This is key for startups as the business needs to have sufficient funding to sustain operations until the break-even point is reached.

Now that you have a clear understanding of what will go into the financial forecast of your Ethiopian restaurant business plan, let's have a look at the written part of the plan.

Need inspiration for your business plan?

The Business Plan Shop has dozens of business plan templates that you can use to get a clear idea of what a complete business plan looks like.

The written part of an Ethiopian restaurant business plan is composed of 7 main sections:

• The executive summary
• The presentation of the company
• The products and services
• The market analysis
• The strategy
• The operations
• The financial plan

Throughout these sections, you will seek to provide the reader with the details and context needed for them to form a view on whether or not your business plan is achievable and your forecast a realistic possibility.

Let's go through the content of each section in more detail!

1. The executive summary

In your Ethiopian restaurant's business plan, the first section is the executive summary — a captivating overview of your plan that aims to pique the reader's interest and leave them eager to learn more about your business.

When crafting the executive summary, start with an introduction to your business, including its name, concept, location, how long it has been running, and what sets it apart. Briefly mention the products and services you plan to offer and your target customer profile.

Following that, provide an overview of the addressable market for your Ethiopian restaurant, current trends, and potential growth opportunities.

Next, include a summary of key financial figures like projected revenues, profits, and cash flows.

Finally, in the "ask" section, detail any funding requirements you may have.

2. The presentation of the company

The second section in your Ethiopian restaurant's business plan should focus on the structure and ownership, location, and management team of the company.

The structure and ownership part provides an overview of the legal structure of the business, who the owners are and how much each has invested and owns. If you are seeking financing it is important that the reader gets a clear picture of which legal entity is receiving the funds, and who controls the business.

The location part should give an overview of the premises from which the company is operating, and why that location is of particular interest (catchment area, accessibility, amenities nearby, etc.).

When describing the location of your Ethiopian restaurant, you could focus on the potential it offers for drawing customers. You may be able to point to its proximity to a major shopping center or another popular restaurant, which could be a major draw for customers. Additionally, you might talk about the potential for customers from the surrounding area, as your restaurant could be a destination for diners looking to try out something new. You could also highlight the potential for local marketing opportunities and the potential for catering in the area.

Finally, you should introduce the management team. Explain each member's role, background, and experience.

It is also important to emphasize any past successes that the members of the management team have achieved, and how long they've been working together, as this will help potential lenders or investors understand why they should trust in their leadership.

3. The products and services section

The products and services section of your business plan should include a detailed description of the offerings that your company provides to its customers. 

For example, your Ethiopian restaurant could offer traditional Ethiopian cuisine such as doro wat (spicy chicken stew), misir wot (lentil stew) and tibs (sauteed beef or lamb) for customers to enjoy. Additionally, the restaurant could provide catering services for customers who wish to host a special event. Finally, the restaurant could offer traditional Ethiopian coffee ceremonies for customers to experience the unique culture and hospitality of Ethiopia.

When drafting this section, you should be precise about the categories of products or services you sell, the types of customers you are targeting and how customers can buy them.

4. The market analysis

When presenting your market analysis in your Ethiopian restaurant business plan, you should detail the customers' demographics and segmentation, target market, competition, barriers to entry, and any regulations that may apply.

The goal of this section is to help the reader understand how big and attractive your market is, and demonstrate that you have a solid understanding of the industry.

You should start with the demographics and segmentation subsection, which gives an overview of the addressable market for your Ethiopian restaurant, the main trends in the marketplace, and introduces the different customer segments and their preferences in terms of purchasing habits and budgets.

The target market section should follow and zoom on the customer segments your Ethiopian restaurant is targeting, and explain how your products and services meet the specific needs of these customers.

For example, your target market might include people from the Ethiopian diaspora who are looking to recreate the flavors they grew up with. Additionally, you could target adventurous diners who are eager to try something new. Finally, you could also target people who are interested in exploring different cultures and cuisines.

Then comes the competition subsection, where you should introduce your main competitors and explain what differentiates you from them.

Finally, you should finish your market analysis by giving an overview of the main regulations applicable to your Ethiopian restaurant.

5. The strategy section

When writing the strategy section of a business plan for your Ethiopian restaurant, it is essential to include information about your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.

The competitive edge subsection should explain what sets your company apart from its competitors. This part is especially key if you are writing the business plan of a startup, as you have to make a name for yourself in the marketplace against established players.

The pricing strategy subsection should demonstrate how you intend to remain profitable while still offering competitive prices to your customers.

The sales & marketing plan should outline how you intend to reach out and acquire new customers, as well as retain existing ones with loyalty programs or special offers. 

The milestones subsection should outline what your company has achieved to date, and its main objectives for the years to come - along with dates so that everyone involved has clear expectations of when progress can be expected.

The risks and mitigants subsection should list the main risks that jeopardize the execution of your plan and explain what measures you have taken to minimize these. This is essential in order for investors or lenders to feel secure in investing in your venture.

Your Ethiopian restaurant may face the risk of a health inspection. The restaurant needs to meet all necessary health and safety regulations in order to stay open. This could mean that if any issues are found, it may lead to a hefty fine or closure. Your Ethiopian restaurant might also face the risk of a decline in customer demand. This could be due to a number of factors, such as changes in customer preferences or the introduction of new competitors. If customer demand drops, it could lead to a decrease in revenue and even threaten the survival of the restaurant.

6. The operations section

The operations of your Ethiopian restaurant must be presented in detail in your business plan.

The first thing you should cover in this section is your staffing team, the main roles, and the overall recruitment plan to support the growth expected in your business plan. You should also outline the qualifications and experience necessary to fulfil each role, and how you intend to recruit (using job boards, referrals, or headhunters).

You should then state the operating hours of your Ethiopian restaurant - so that the reader can check the adequacy of your staffing levels - and any plans for varying opening times during peak season. Additionally, the plan should include details on how you will handle customer queries outside of normal operating hours.

The next part of this section should focus on the key assets and IP required to operate your business. If you depend on any licenses or trademarks, physical structures (equipment or property) or lease agreements, these should all go in there.

You could have a key asset in the form of a unique recipe for a traditional Ethiopian dish. This recipe may be the basis of the entire restaurant's menu and could be considered a form of intellectual property. Additionally, the restaurant might have a signature logo or branding that could act as another form of IP. This logo could be used on menus, merchandise, and other promotional materials and could be a key asset in helping the business stand out from the rest.

Finally, you should include a list of suppliers that you plan to work with and a breakdown of their services and main commercial terms (price, payment terms, contract duration, etc.). Investors are always keen to know if there is a particular reason why you have chosen to work with a specific supplier (higher-quality products or past relationships for example).

7. The presentation of the financial plan

The financial plan section is where we will include the financial forecast we talked about earlier in this guide.

Now that you have a clear idea of the content of an Ethiopian restaurant business plan, let's look at some of the tools you can use to create yours.

What tool should I use to write my Ethiopian restaurant's business plan?

In this section, we will be reviewing the two main options for writing an Ethiopian restaurant business plan efficiently:

• Using specialized software,
• Outsourcing the drafting to the business plan writer.

Using an online business plan software for your Ethiopian restaurant's business plan

The modern and most efficient way to write an Ethiopian restaurant business plan is to use business plan software .

There are several advantages to using specialized software:

• You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
• You are guided through the writing process by detailed instructions and examples for each part of the plan
• You can access a library of dozens of complete business plan samples and templates for inspiration
• You get a professional business plan, formatted and ready to be sent to your bank or investors
• You can easily track your actual financial performance against your financial forecast
• You can create scenarios to stress test your forecast's main assumptions
• You can easily update your forecast as time goes by to maintain visibility on future cash flows
• You have a friendly support team on standby to assist you when you are stuck

If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here .

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The Business Plan Shop does the maths for you. Simply enter your revenues, costs and investments. Click save and our online tool builds a three-way forecast for you instantly.

Hiring a business plan writer to write your Ethiopian restaurant's business plan

Outsourcing your Ethiopian restaurant business plan to a business plan writer can also be a viable option.

Business plan writers are experienced in writing business plans and adept at creating financial forecasts without errors. Furthermore, hiring a consultant can save you time and allow you to focus on the day-to-day operations of your business.

However, hiring business plan writers is expensive as you are paying for the software used by the consultant, plus their time, and their profit margin of course.

From experience, you need to budget at least £1.5k ($2.0k) excluding tax for a complete business plan, more if you need to make changes after the initial version (which happens frequently after the initial meetings with lenders or investors).

You also need to be careful when seeking investment. Investors want their money to be used to grow the business, not spent on consulting fees. Therefore, the amount you spend on business plan writing services (and other consulting services such as legal services) needs to be negligible relative to the amount raised.

The other drawback is that you usually don't own the business plan itself: you just get the output, while the actual document is saved in the consultant's business plan software - which makes it difficult to maintain the document up to date without hiring the consultant on a retainer.

For these reasons, outsourcing the Ethiopian restaurant business plan to a business plan writer should be considered carefully, weighing both the advantages and disadvantages of hiring outside help.

Ultimately, it may be the right decision for some businesses, while others may find it beneficial to write their business plan using online software.

Why not create your Ethiopian restaurant's business plan using Word or Excel?

Using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write an Ethiopian restaurant business plan is a terrible idea.

For starters, creating an accurate and error-free financial forecast on Excel (or any spreadsheet) is very technical and requires both a strong grasp of accounting principles and solid skills in financial modelling.

As a result, it is unlikely anyone will trust your numbers unless - like us at The Business Plan Shop - you hold a degree in finance and accounting and have significant financial modelling experience in your past.

The second reason is that it is inefficient. Building forecasts on spreadsheets was the only option in the 1990s and early 2000s, nowadays technology has advanced and software can do it much faster and much more accurately.

And with the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.

Also, using software makes it easy to compare actuals vs. forecasts and maintain our forecasts up to date to maintain visibility on future cash flows - as we discussed earlier in this guide - whereas this is a pain to do with a spreadsheet.

That's for the forecast, but what about the written part of my Ethiopian restaurant business plan?

This part is less error-prone, but here also software brings tremendous gains in productivity:

• Word processors don't include instructions and examples for each part of your business plan
• Word processors don't update your numbers automatically when they change in your forecast
• Word processors don't handle the formatting for you

Overall, while Word or Excel may be viable options for creating an Ethiopian restaurant business plan for some entrepreneurs, it is by far not the best or most efficient solution.

• A business plan has 2 complementary parts: a financial forecast showcasing the expected growth, profits and cash flows of the business; and a written part which provides the context needed to judge if the forecast is realistic and relevant.
• Having an up-to-date business plan is the only way to keep visibility on your Ethiopian restaurant's future cash flows.
• Using business plan software is the modern way of writing and maintaining business plans.

We hope that this practical guide gave you insights on how to write the business plan for your Ethiopian restaurant. Do not hesitate to get in touch with our team if you still have questions.

Also on The Business Plan Shop

• In-depth business plan structure
• Key steps to write a business plan?
• Free business plan template

Know someone who owns or wants to start an Ethiopian restaurant? Share this article with them!

Founder & CEO at The Business Plan Shop Ltd

Guillaume Le Brouster is a seasoned entrepreneur and financier.

Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.

Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.

Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.

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How to Write a Hotel Business Plan in Kenya [Free PDF Template]

Creating a Hotel Business Plan in Kenya will help you greatly accelerate the realization of your hotel venture. And while it is possible to kickstart and manage your hotel without a plan, if you aim to establish a standout hotel that surpasses competitors, a business plan might be essential. 

However, writing a business plan from scratch is no easy task, especially if this is your first venture and you lack financial or business expertise. That is exactly why we created this business plan template to help you write your plan faster. 

READ FULL GUIDE: How to Start Profitable Hotel Business in Kenya [2023 Guide]

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What is a Hotel Business Plan in Kenya?

A hotel business plan is a written document that precisely outlines your goals and objectives for the hotel business and the strategies you intend to implement to achieve them. This plan serves as a roadmap that guides your hotel business from its inception to a level where it can generate sustainable profits. 

The business plan encompasses your goals, marketing strategies, financial forecasts, and various other aspects.

So, whether you are starting a small-scale hotel business or planning for large-scale operations, this document will significantly facilitate your journey. 

But why do you need a hotel business plan anyway? Let’s find out below…

The Importance of a Hotel Business Plan in Kenya

There are many factors that underscore the significance of having a business plan for your hotel. They include:

• Clarifying Objectives: A well-structured business plan enables you to have a clear understanding of your hotel’s goals and aspirations.
• Goal Setting: By establishing concrete goals early on and recognizing potential obstacles, you can effectively strategize to overcome challenges and attract customers, leading to profitability.
• Progress Tracking: The business plan allows you to monitor and measure your hotel’s progress accurately, ensuring you remain on track.
• External Funding: If you intend to seek external funding for your hotel venture, a well-written business plan is important to convince potential investors or lenders.
• Team Alignment: The business plan helps align your team members with the hotel’s objectives and goals, fostering a cohesive working environment.
• Financial Clarity: By creating a comprehensive financial plan, you can understand how much you need to start a hotel in Kenya and the kind of profits you can expect.
• Competitive Analysis: Understanding your competition through the business plan enables you to devise effective strategies to outperform them.
• Marketing Strategies: Effective marketing strategies are crucial for attracting customers to your hotel, and the business plan facilitates the creation of such strategies.
• Risk Mitigation: By identifying potential risks in advance, the business plan allows you to minimize the chances of financial loss or making evitable mistakes.

RECOMMENDED: How to Write a Highly Effective Business Plan in Kenya

Why You Need a Hotel Business Plan Template

As I mentioned earlier, creating a hotel business plan from scratch can be a daunting task, often leading to unnecessary details and complexity. That’s why a template comes in handy. In particular, this template will help you to: 

• Save time: Using a template streamlines the process, enabling you to complete your hotel business plan faster.
• Focus on relevant parts: This template will help you focus on the most important aspects of your hotel business, avoiding irrelevant details.
• Find clarity: Following a template gives you a clear picture of what you should include in your hotel business plan.

Types of Hotel Business Plans in Kenya 

There are two main types of hotel business plans you can choose between:

• Traditional Hotel Business Plan 
• Lean Hotel Business Plan

Traditional Business Plan

This type of business plan is more comprehensive and typically consists of several pages. It is only suitable for large-scale hotel ventures seeking external funding. 

A traditional business plan usually has the following sections:

• Executive summary
• Company description
• Product or service description
• Market analysis
• Organization and management team
• Marketing and sales
• Financial projections

You might not need all these sections for your hotel business. So, when writing your plan, only include sections that align with your specific goals and requirements. You will also need to determine whether you need funding or are simply looking for a detailed roadmap to launch and expand your hotel.

Check Our Full Hotel Business Plan Template:

DOWNLOAD FREE TEMPLATE

Lean Business Plan

The lean format is a simplified version of the traditional business plan, often condensed into a one-page table summary. A lean business plan helps to give you a snapshot of your business without going into too much detail.

 It also serves as an action plan or outline to guide you and your team while starting and growing the hotel. 

This format is unsuitable for securing loans or external investments. 

A lean business plan typically has the following sections:

• Identity: Briefly describe your hotel business.
• Problem: Identify the issue your hotel intends to solve.
• Solution: Explain your unique offerings to address the problem.
• Competition: Analyze competitors, including their strengths and weaknesses.
• Expenses: Outline the startup costs of your hotel.
• Target markets: Identify your customer base.
• Marketing activities: Specify marketing strategies and associated costs.
• Sales channels: Describe how you will sell your services/products to customers.
• Revenue streams: Outline the various ways your hotel will generate income.
• Partners and key resources: Identify crucial collaborations and resources.
• Team: List the individuals and their roles in running the hotel.
• Milestones: Plan how you will test and launch your hotel.

DOWNLOAD FREE LEAN TEMPLATE

The choice between a traditional and lean business format comes down to the the scale of your hotel business and the purpose of the business plan. 

When Not To Use This Template 

While a business plan template can significantly fasten the planning process, there are scenarios where it might not suffice. Here are some examples:

• Large-scale ventures: For complex projects requiring substantial external funding, a more detailed plan is necessary.
• Investor relations: Extensive financial projections and analysis are crucial when seeking significant investments.
• Complex markets: Highly competitive markets demand a tailored approach beyond the template.
• Regulatory compliance: Hotels with specific legal requirements need a comprehensive plan to address them.
• Long-term planning: For sustainable growth, a more detailed strategic plan is essential.

To enhance your business plan’s accuracy and effectiveness, you will need customized financial projections and additional research. 

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L.K. Nathans

I am a personal finance enthusiast and digital marketer. My work here is to help you navigate your financial journey and achieve your main money goals. Through Omoka Digital, I provide practical tips, strategies, and insights on budgeting, saving, investing, and debt management. My aim is to empower you with the knowledge and tools you need to make informed financial decisions and improve your financial well-being.

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