Joseph Kibur, 42, an Ethiopian-born Canadian, had the idea of setting up an apartment building when he and his family visited for the Ethiopian Millennium after 25 years in Canada and started looking for a comfortable place to stay. The idea materialised and they opened the Millennium Apartment guest house doors in January 2013, located behind Millennium Hall in Bole District.
This is a business that is attracting a growing number of business people, seeking profit through renting furnished houses. There are 860 guest houses in Addis Abeba, according to data from the Addis Abeba City Trade & Industry Bureau (AACTIB).
It costs Joseph 46 million Br to start this business, he says: 34 million Br to erect the building and 12 million Br to furnish the rooms. The five-storey building with 18 luxury rooms was furnished using local products, which saved both time and money, Joseph said, whilst comparing it to his experience of setting up the YaYa Africa Athletics Village – furnished with imported materials. This village, which he established with a partner, comprises of a running track, beach volleyball court, 30 rooms for lodging, a café on a terrace, a restaurant, bars and a playground for children.
Another facility, located near the Atlas International Hotel along Ghana Street, in Bole District is Addis Bole guest house. With 43 rooms in a six-storey building, the guest house provides guests with a bath, television and internet connection. Eight of the rooms are double beds, while the rest are single bedded.
Balla Mohammed, 37, is a Sudanese visitor who stayed for four days at the Guest house and paid 100 dollars in total. He was staying at the Addis Bole for the third time.
“I enjoy the quality of bed here,” he said. “But the rooms lack a living room and a Moroccan bath.”
Some of the rooms have kitchen facilities, despite not being fully functional. The charge for a single bedroom ranges from 350Br to 478Br, while rooms with double beds are rented for prices ranging between 450Br and 669Br.
Millennium apartment guest house has three separate suites: one, called Penthouse, comes with three bedrooms, each with en-suite shower rooms – the master bedroom includes a Jacuzzi and there is a television in the living room. Guests pay 70 to 100 dollars a day to stay there; the variation is calculated based on the amount of time guests spend, with regular customers enjoying a discount.
The rooms are mostly fully occupied and the guests are often agents of large companies and workers of international NGO’s, said Tsehay Mengiste, manager of the apartment.
A standby generator has been installed in case power cuts occur; there is also a 5,000lt tanker for water and free Wi-Fi – with one router for every two rooms – as well as free gymnasium. Each of the rooms has a kitchen with a 200lt refrigerator and other kitchen appliances.
The Penthouse house also has a corridor, with a shelf on the left-hand-side for shoes. Some Ethiopian paintings are also seen hanging from the walls. To the right of the corridor is the 50sqm living room, fully carpeted and with a white-leather sofa. The bedroom, which comes at the end of the corridor, is 30sqm wide. The bedroom has a closet attached to the wall; it also has a veranda with a nice view.
Guests wishing to stay in a room with double beds and double showers are charged 50 to 80 dollars for a single day. They are required to pay 40 to 70 dollars for rooms with a double bed and single shower.
The guest house business has helped Joseph, who lives in the Gerji area with his family and goes abroad once in a year, reap a good profit. Almost all of the rooms are occupied week in week out.
“Most of the customers work for multi-national companies, coming for research and other business-related activities,” he said.
Some real estate developers that fail to get buyers for their buildings turn them into guest houses, says Asrat Demissie, the general manager of the Addis Bole. The real estate and guest house businesses are way apart in their capital requirements, says Abiy Gizaw, general manager of Sunshine Construction Plc, adding that trust deficit among home buyers could still lead some developers into the guest house business. The guest house boom, however, he says, is may be due to the fact that many people consider it to be a lucrative business.
Location, service, accommodation and price are decisive factors for success in the guest house business, he says. Proximity to facilities, like supermarkets and even the airport, is crucial in elevating the desirability of a guest house. The quality of services provided is an important factor in attracting customers and, lastly, the price plays an important role.
“The business is seasonal,” Asrat says.
The “seasons” could be holidays, such as Mesqel – the celebration of the finding of the cross on which Jesus Christ was believed to have been crucified, and Timqet (Epiphany). January and February are also mentioned as peak seasons. On top of these are international conferences and events organised in Addis Abeba.
“Business is booming, despite being seasonal,” says Yemenzworq Woldeamanuel, deputy general manager of the Sheba Guest house, located in the gated community known as the Turkish Compound, around the Desalegn Hotel on Ghana Street, Bole District.
This guest house, which lies on 2,000sqm space and owned by Aster Dawit, who resides in the US, began operating in 2011 with two villa houses and service quarters. Guests mostly consist of American and European customers visiting Ethiopia for adoption. They pay 50 dollars for the ordinary rooms and 85 dollars for suites, of which there are six. The prices include complimentary breakfast, refrigerators and satellite television. It also has free Wi-Fi and a shared kitchen for those who wish to cook.
Two German siblings, Anna and Martine Zues, who have been in Ethiopia since February have made guest houses their number one places to stay whenever they return to Addis Abeba from various visits.
“Hotels are expensive and impersonal,” Martine says.
Before moving to Sheba a week ago, they were lodging at another guest house near the Global Hotel in the Lancia area, along Serra Leone Street.
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