Earn & GROW MODEL

Earn 11 - 15 % Annually. Grow in value.
  • bullet
    Great location & Growth Market
  • bullet
    EARN: Reliable Revenue Model
  • bullet
    GROW: Increase in Asset Value
  • bullet
    PROTECT: Proper Maintenance

Realistic earning scenario

Based on 56% Occupancy. See below for other scenarios

THE STUDIO

  • Rate: $83-150
  • AVG RATE: $123
  • EARN: $14 800
  • RETURN: 7 years

ONE-BEDROOM

  • RATE: $135-240
  • AVG RATE: $198
  • EARN: $21 970
  • RETURN: 7 years

TWO-BEDROOM

  • RATE: $180-320
  • AVG RATE: $265
  • EARN: $29 300
  • RETURN: 7 years

GARDEN VILLA

  • RATE: $280-500
  • AVG RATE: $410
  • EARN: $47 800
  • RETURN: 7 years

BEACHFRONT VILLA

  • RATE: $330-585
  • AVG RATE: $483
  • EARN: $57 090
  • RETURN: 7 years

In the next sections, we will look into the hotel (EARN) business model, revenue, and cost structure based on our experience from managing The Nest Boutique Resort in Zanzibar. We have reviewed different scenarios based on official historical data. Following we have analysed how have similar markets developed in order to forecast value increase (GROW). Finally, it is important to properly maintain the properties in order to preserve the value of the asset.

Great Location & Growth Market

  • bullet
    Beachfront Property
  • bullet
    Landmark location - Next to the Rock restaurant
  • bullet
    Tropical island in growth market
Number of Tourists Annually
Hotel Occupancy Zanzibar

EARN: Reliable Business model

Based on 365 days of sunshine, the average occupancy in Zanzibar varies between 55% and 70%. Well managed properties earn well for their owners. Our experience from The Nest Boutique Resort allows us to manage:

  • bullet
    Marketing & Sales
  • bullet
    Lodging Facility's Operations
  • bullet
    Recreation
  • bullet
    Entertainment
  • bullet
    Food services
  • bullet
    Accommodation maintenance
  • bullet
    Administration, Accounting and Staff Management

YOU SIT BACK & EARN AFTER TAXES

REVENUE = WEIGHTED RATE * OCCUPANCY * 365
the weighted rate

The rates we have budgeted are 20% less than the neighboring hotels. The occupancy is based on different island-wide models that we have seen work in The Nest Boutique Resort already. Let us look at the Occupancy.

the Occupancy

The market is showing tremendous growth over the past few years, almost doubling in size in the 5 years before COVID 19. Preliminary data for 2022 shows growth over 2019 (pre- COVID) tourism levels. This delivers exceptional occupancy levels. 

  • bullet
    Average tourist stay: 7.8 days
  • bullet
    Number of beds : 15 000
  • bullet
    Average occupancy: 2019 75%
  • bullet
    Average occupancy: 2021: 56%
  • bullet
    Preliminary results of 2022 show full recovery
HOTEL RETURN ON INVESTMENT = (REVENUE - COSTS) / VALUE OF INVESTMENT

The profit model is based on our experience in running hospitality and on industrywide standards. Rates are based on conservative rates compared to neighbors in our competitive mix in order to guarantee occupancy results. This is the cost model:

Realistic scenario
  • bullet
    56% Occupancy (2021)
  • bullet
    HOTEL ROI 13-14%
  • bullet
    Return 7 years
Optimistic scenario
  • bullet
    72% Occupancy (2019)
  • bullet
    HOTEL ROI 16-17%
  • bullet
    Return 6 years
Pessimistic Scenario
  • bullet
    48% Occupancy
  • bullet
    HOTEL ROI 10-11%
  • bullet
    Return 10 years

GROW: increase in asset value

The Zanzibar market is quite early stage in terms of maturity. A good benchmark market is Mauritius:

  • bullet
    2009: Price per sq. m. $2400 (studio)
  • bullet
    2009: Similar tourists to Zanzibar Today
  • bullet
    2019: Price per sq. m. $4800-$5200 (studio)
  • bullet
    2019: About double of Zanzibar today
At this rate, Zanzibar will double its tourists by 2027. Beachfront property value shall increase 2x-3x

PROTECT: Proper Maintenance

  • bullet
    Pools
  • bullet
    Gardens
  • bullet
    Room Service
  • bullet
    Electricity & water
  • bullet
    24-hour security
  • bullet
    Maintenance