Ethiopia Hospitality Industry

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1 Ethiopia Hospitality Industry smothered by tons of challenges. Promising Hospitality Industry with risks Africa s hotel sector has the potential for further growth over the next five years, with an increase in the number of foreign and domestic travelers, as well as an expansion in a number of hotel chains on the continent reinforcing the industry's untapped potential, according to a report by PricewaterhouseCoopers. "The opportunities are aplenty for this industry to enjoy further growth albeit at a more modest pace," PwC southern Africa hospitality industry leader Pietro Calicchio said. Africa s hospitality industry is on the verge of exponential growth especially in the giants economies of the continent. The country with the 8th nominal GDP in the continent, Ethiopia is said to be home for various continental and international offices and representatives; which results various international diplomatic interactions in the capital Addis Ababa. With the government s encouraging policies for foreign direct investment and current reforms in all areas, the internationally acclaimed state owned Ethiopian Airlines is making Addis a hub to travelers from and to Africa and Asia, the country s hotel industry is growing in a tremendous speed. The cost of obtaining customers is high The average cost of OTA is 20%, and the marketing cost of individual hotels is also too high and cannot pinpoint the customers low bargaining power and high costs of purchase. The cost of starting a hotel is high Meanwhile, high import thresholds, tariffs and transportation costs lead to a high cost to start a hotel is growing more than ever. With low ratio of rooms and everlasting construction period result in high fixed cost, high operation management and maintenance investment in addition to low operation efficiency, tedious processes, and miscellaneous stuffs. To tackle all the above mentioned obstacles in starting a hotel or sustaining existing ones Ivy hotel comes to the country with a brilliant solution of franchising advantages and the unique services they offer; with Ivy the industry will be getting benefits that have never been practiced before: Minimize the project risk Comparing the available man power in the secondly most populated country of the continent to the cost of starting a hotel, some companies such as Ivy hotel are doing it right by providing an academy that can train this available man power in their own standards. However, both the demand and supply are increasing, the service sector in general is said to be very weak and far from international standards, as agreed by many Ethiopians. And when it comes to hotels, it might only take less than five years for Ethiopia to be among the best hotel service providers in the continent if all other hotel franchises and local hotel investments address all the attributes in the industry in a way companies like Ivy hotels do. The occupancy rate is low JLL data shows that the stock of hotel rooms in Ethiopia will increase 80% in five years. And there will be 50% increase in one year. The report indicates that most of them are international hotels, and currently more than 140 international hotels under construction. Due to lack of brand awareness, the International hotel brand occupancy rate is close to 77%, while local hotels are less than 40% in off season. There are no uniformed industry standards which bring the ramification of low satisfaction and less repeated customers. The industry is said to be characterized by outdated facilities, lacks sense of design, and cannot satisfy the needs of customer and unreliable technology and service. With more than 10 years history, supply chain was examined and filtered by time. Ivy with powerful supply chain suppliers which examined by time, providing an efficient and qualified purchasing procedure, utilizing the advantage of mass purchase to enlarge the margin of profit. Cost effective Design in a cost-effective way, cut the tedious part and shuffle the cost to the most important part to meet the core needs of the customer. Professional operation and guidance To guarantee the stability and standard of service, Ivy has established a Hotel Management Institute, recruiting the operation gurus with the global background to provide rigid training, and also they only dispose of a consulting manager after the test of the institute. Marketing, branding and CRM Ivy provides online marketing and CRM system, helping their franchisee to enhance the conversion rate and also gain more customers. Despite all the challenges, hotel industry is booming in Ethiopia and in the whole continent. Due to the increase in intra-africa travel, higher demand for the quality hotels, potential for long-term growth and also rapid growth of both domestic and international travelers into the market, hotel chains are popping up across the continent. But Ivy is penetrating into the African hospitality industry bringing solutions that would be perfect for the continent in current and also prospective terms. More information you can get on

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