||Official data on New Zealand language school student numbers for the 12 months ending March 2004 makes for gloomy initial reading; intake was down by 29 per cent, following on from the previous year's downturn, according to Statistics New Zealand's annual survey of English language schools. Data from Education New Zealand (EdNZ) reveals that, while intake among universities was up and the market for polytechnics and private tertiary providers largely held steady, numbers of international students entering English language schools spiralled downwards.
And among individual schools canvassed for this article, most reported a severe decline ranging between -20 per cent and -33 per cent, while only one school bucked the trend by recording almost identical numbers to those in 2003. Education New Zealand's (EdNZ's) Stuart Boag points out, ''Such was the meteoric rise of the English language teaching industry from 2000 onwards, that 2004 student numbers were still around 20 per cent higher than in 2002.'' But there is no doubting that the New Zealand industry is going through difficult times at the moment.
From 1999 onwards, the development of the New Zealand market was tied to a strong growth in demand from China. From fewer than 1,000 Chinese students attending New Zealand language schools in 1997, EdNZ data shows that, by 2003, China had become the leading source market, numbering more than 27,500 students. The New Zealand market's decline in 2004 owed much to the 33 per cent fallback in numbers of Chinese students. Japan and Korea - the second- and third-ranked source countries - also declined significantly - by 14 per cent and 36 per cent respectively. Other important markets dropped even more drastically, with Thai student numbers declining by 49 per cent and those from Taiwan falling by a massive 54 per cent.
In respect of China, the exchange rate is one of several factors highlighted as having contributed to the drop in demand. According to Boag, ''Competition from other countries - for example, the UK - has certainly taken its toll, as policy settings in various countries have changed. The market within China is also dynamic,'' he explains, ''and there has been an upswing in the local provision of language training and a lowering of the 'market premium' that an English-trained graduate might command.''
William Neale of Seafield School of English in Christchurch also points to ''the negative publicity in China from the high profile collapse of some New Zealand language schools - in spite of the displaced students receiving alternative courses or refunds''.
Nevertheless, Rex Paddy at Languages International in Auckland points out that the present difficulties do not exist in isolation, but to a large degree, reflect a worldwide decline in the demand cycle. However, the situation has been exacerbated by a very strong New Zealand dollar. Neale believes this was a significant influence in the overall decrease in student numbers from Japan last year. ''Our dollar certainly didn't help in the Korean market either,'' he adds. ''The Korean economy, the earlier easing of Australian visa regulations for Koreans, the popularity of Canada with Korean students and a general downturn in the Korean market, according to Korean agents, contributed to the drop-off in our Korean student bookings.''
For most schools, despite the huge decrease in actual numbers, China, Japan and Korea remained the most productive source markets in 2004. However, specific attention to other markets by some schools paid off. Paddy reports that Switzerland performed the best in terms of market share, thanks to ''the excellent results that Swiss students get here in their Cambridge exams'' and the fact that Swiss tourism to New Zealand is continuing to thrive. Geoff Butler of Mount Maunganui Language Centre also names Switzerland, along with Japan, as one of their biggest markets. ''Part of this is due to the fact that we have spent time and resources building relationships with good reputable agents in both countries,'' he notes.
Only a handful of small source countries saw positive growth. At Taupo Language & Outdoor Education Centre, Mary Rose Blackley reports that of all nationalities, Saudi Arabians are performing the best.
Latin American enrolments have suffered, according to Cleve Brown of Worldwide School of English in Auckland, because of a number of factors: their local economies, increases in flight ticket prices to New Zealand, the high New Zealand dollar and better student visa policy options - particularly Australia, with its right to work on a student visa.
According to Brown, most ''high risk'' countries suffered in 2004 as a result of the immigration services tightening their interpretation of visa policy. ''[There is] a perception/reality,'' says Brown, ''that the NZ visa has tightened up and become more difficult and more restrictive for high risk country students.''
For most of the language schools canvassed, general English continued to be the most popular programme in 2004, although Brown reports that increasing numbers are booking for English plus programmes, and Mount Maunganui has continued to experience good demand for its English plus surfing course. These are trends that language schools will undoubtedly pick up on in order to remain competitive.
Looking to the future
The New Zealand market has grown accustomed to rapid expansion over recent years. However, language schools are now facing a new reality. ''The facts of the matter are that the industry grew extremely rapidly for about five years from 1998 to 2002,'' comments Education New Zealand's Stuart Boag. ''Growth at the level that was experienced during that time was unsustainable in the long term, and the industry is [now] having to adjust to not having rampant growth as the major driver.''
With just three main nationalities accounting for 75 per cent of total student numbers last year, the market is extremely vulnerable to the ups and downs of a limited number of source countries. Hence, William Neale of Seafield School of English in Christchurch believes that the biggest challenge for New Zealand schools this year will be to broaden their recruitment base by developing new markets. At Mount Maunganui Language Centre, Geoff Butler reports that the school will focus on building Eastern European enrolments. Meanwhile, according to Marketing Manager, Peter Chou, Queen's Academic Group in Auckland has put much energy into building its business in South and mid-America, which it expects to bear fruit in 2005.
According to Boag, ''We hope to see numbers from other continents outside Asia increase, but this is a gradual process. What we do not foresee in the short-term,'' he adds, ''is any other 'Eldorado' market, such as China was a few years ago.'' However, there is some expectation that the Chinese, Japanese and Korean markets will pick up at least a little, despite Neale's lament that, ''I can only see a possible significant increase in student bookings from China if the Chinese government and media discover how difficult - impossible? - it is for students to lose money should their New Zealand course provider collapse.''
Some, like Chin Wong of Foundation English for Future Executives in Auckland, plan to carry out more promotion in these key source countries. Most are pinning their hopes on a fall in the value of the NZ dollar, while also looking to a positive outcome to a forthcoming student visa policy review (see Special Report in May).
At Languages International in Auckland, Rex Paddy believes that the greatest challenge of 2005 will be, ''remembering our experiences of the last 26 years, which tell us that these cycles come and go, and that demand always rises to a higher than previous level after each down cycle. This means that we will continue to invest in staff and infrastructure,'' he stresses.
Times may have become more challenging, but Boag remains optimistic: ''Our institutions are good; they provide a good product; New Zealand is still a great place to live and learn, and those virtues will ensure that students will continue to choose New Zealand.''