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August 2003 issue

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The global market

Despite being a huge multi-billion dollar export industry, the precise size of the global English language teaching market remains unknown. Amy Baker analyses a variety of data sources to provide a valuable overview of the 2002 worldwide English language teaching market in native English speaking countries.

The sheer number of people who go to an English-speaking country to learn English is phenomenal. Major cities and resorts are full of language travellers, especially during their peak times, while passing conversation with many people from non-English speaking countries often reveals that they have spent at least one trip overseas learning English. So how big is the English language teaching (ELT) market?

There are no recent statistics for the global ELT market and the few comprehensive national statistics that are available for some countries are often not comparable. Combining industry observations, national immigration statistics and Language Travel Magazine's own Status statistics, we can reveal that the estimate for the total ELT market in native English speaking countries was worth over US$7.5 billion in 2002 in terms of total student expenditure (see page 29), with the largest two destinations in terms of incoming language travel being the UK and USA. Looking at the estimated total revenue generated by these two countries, it is clear that they dominate the ELT market, with the UK industry alone accounting for just over one-third of the total.

Not surprisingly, given the strength of its currency, the UK is a more costly destination than all the others in our analysis, with a student's average weekly spend on tuition reaching US$303 (see page 28). The UK's higher cost of tuition (and living) explains, in part, the higher revenue generated by this market. However, in terms of student numbers and student weeks, the UK remains the forerunner of the industry, accounting for the lion's share of the market.

Looking at student weeks as an indicator of a market's worth, the top three countries remain the same as in the student numbers table, with the UK remaining the largest market, followed by the USA and Canada. However, Ireland, which is in fourth position in the student numbers league table, drops to sixth position in terms of student weeks, behind Australia and New Zealand. This confirms the continued dominance of short-term language travellers in the Irish market.

Interestingly, the two countries with the longest average stay per student are New Zealand and Australia. This is explained in part by the proximity of these two destinations to Asia, where long-term academically motivated students tend to predominate. Conversely, in Ireland, Malta and the UK, a higher proportion of student intake is short-term Western European students.

Market trends over time
As this is the first time that Language Travel Magazine has prepared such a report, the above results are a snapshot of global market trends in 2002. While we cannot reliably report on market shifts year on year, we can use background data from our research to make observations about recent tendencies in the market.

The UK's share of total English language students seems to have dropped in the last few years, according to the latest International Passenger Survey (IPS) data supplied by the Visit Britain tourist authority. These observations are backed up by statistics produced by the Association of Recognised English Language Services (Arels), which canvasses its members each year and produces results based on an average 90 per cent response rate. While the average length of stay per student has increased, Arels' figures - which we used to establish our estimate of UK numbers - corroborate the fact that actual numbers have declined in the last six years.

IPS data concerning English language student intake in the UK is produced every three years, based on interviews conducted with passengers travelling via principal airports, sea routes and the Channel Tunnel into the UK. Interviews are conducted throughout the year and the sample is stratified, to ensure it is representative of the mode of travel, and seasonally weighted. National estimates are then extrapolated. The number of people visiting the UK to study English in 2002, according to IPS, stood at 439,000, falling from 563,000 in 1999 and a high of 669,000 students estimated for 1996.

The USA is a difficult market to quantify, but indications are that student numbers have also dropped here since 2001. Other anecdotal evidence leads us to conclude that other markets have seen significant increases in student numbers in the same period. New Zealand, for example, saw major growth from the Chinese market in 2002, which significantly buoyed student numbers.

Student nationalities
Both New Zealand and Australia point to China, which has become one of the top provider countries for many English language teaching markets in the last two years, as a key source of students. 'China has increased its numbers considerably since the liberalisation of the student visa regime with regard to China in 2001,' comments Sue Blundell of English Australia. 'Australia's top three markets are Japan, China and South Korea. Numbers of students from these countries remain far ahead of other source markets and thus they should retain their dominance.'

In New Zealand, Lester Taylor, of Education New Zealand, also underlines China's importance in the ELT market. 'China is obviously going to dominate the international education industry globally, by reason of the sheer size of its population and rapid economic development,' he says. 'Because of our location, Asia remains the most important region, contributing some 85 per cent of international students. Japan is second only to China for the English language sector.'

Market trends do change year on year, as economic crises, changes in visa issuance and the affordability of various study destinations impact on student choice. Aside from the issue of price (see right), visa access can have a big influence on student choice. While Australia and New Zealand have both adopted transparent visa strategies towards the Chinese market, Peter Thomas at US language schools' association, AAIEP, acknowledges that visa issuance creates a barrier for Chinese into the USA.

'China, of course, should be a boom market,' he says, 'but it remains very, very difficult for anyone from China to get a US visa for just English language study. They can get visas much more easily for degree study.' While the USA remains a popular choice with many student nationalities, Thomas sees future market growth hampered by visa problems. 'The major issues for the US industry right now, and for the next few years at least, are surely barriers erected by the US government,' he says.

In the UK, Tony Millns at Arels believes that China will also continue to be a growth market for UK language schools. Despite the fact that the UK is not close to Asia, it has also been enjoying a surge in Chinese students. 'The sheer size and newness of the Chinese EFL market would lead one to assume that demand will continue to grow,' comments Millns. Japan, Korea, Italy and Switzerland are other key markets for UK schools.

Other destinations, such as Canada, also enjoy healthy Chinese enrolments, and Korean student numbers are reported to be strong again in the global market after some decline. 'Korea is booming now,' says Thomas in the USA, 'but that can't last forever.'

He points out that the USA's other main market, Japan, also has a declining school age population, although the government has recently pushed English language learning to the top of the agenda by announcing study abroad scholarships and introducing English-medium high schools. Thomas concludes, 'I think these two markets will still be significant for English language programmes in the USA 10 years from now, even if they are not in the top three.'

Interestingly, South Africa, which once had a reputation for attracting mainly Western Europeans, is seeing its modern-day student mix evolve, with increasing numbers of Asian students at its schools. In the latest Language Travel Magazine 2002 Status survey of South Africa, Koreans and Chinese occupied the number one and three positions in the top student nationalities table, indicating that the country's price advantage is winning new business.

Future trends
Forecasting the future for individual ELT destinations is difficult in an industry as volatile as this one. Millns says, 'As recent incidents have shown, our industry is affected by external, non-controllable factors such as Sars, war, the threat of terrorism, currency fluctuations and government legislation.' However, while student demand may fluctuate between countries and waiver in times of global unrest, it is unlikely to wane long-term, according to industry professionals. Valerie Richmond, President of language school association, Capls, in Canada, says that Capls does not expect any of its student markets to dwindle in the next 10 years, 'but it is largely dependent upon Citizenship and Immigration Canada's policies'. Canada's main markets include Japan, Korea, Taiwan, Brazil and Mexico. Taylor in New Zealand adds, 'Growth will vary from market to market and some may remain steady. That, of course, does not mean that events such as Sars will not have an impact, but I would not expect a long-term trend down in markets.'

Blundell in Australia sums up current thinking. 'There are so many variables that impact on supply and demand. Australia is currently experiencing some dwindling markets due to economic conditions in those countries and high-risk ratings for visas,' she says. 'I believe the demand for English language training will remain high on a global level with trends vacillating in response to the external environment, as they always have.'

In the future, traditional English language learning destinations may face stronger competition from countries where English is the official second language. Masaru Yamada is President of the Federation of Education and Language Consultant Associations (Felca), which represents agency associations around the world. He points to increasing student interest in countries such as Singapore and India as study destinations.

'Singapore is attractive for students in the neighbouring countries [because of] its strong reputation in the field of high tech and environmental studies,' he says, underlining the interest in further study that motivates many English language students today.

'The drawback,' he continues, 'is the high cost of tuition and accommodation, and the less developed infrastructure with regard to accepting international students.' Yamada suggests that India, however, has much potential in the international study abroad market. 'Its IT study and research has already gained a top reputation [in the world],' he says, 'and its tuition and accommodation fees are acceptable for almost all students, no matter what their country of origin. [Also[, classes are all conducted in English.'

It is likely that market share will shift noticeably in a few years time, although many ELT destinations are confident that newer education destinations such as India and Singapore will not be a significant threat to the established English language destinations. Albert Lee, International Relations Officer of Taiwanese association, Tosa, which is a Felca member, underlines that accessibility and affordability will be key in the competitive ELT industry.

'When students choose a country, they consider the cost of living, whether or not the country welcomes foreigners, and last but not least, their collective impression of that country from various sources - travelling, movies, media and word of mouth,' he says.


How we arrived at these figures

For some countries, comprehensive data on the English language teaching market is compiled by government bodies, usually based on visa issuance statistics, although these may not take into account short-term students studying on tourist visas. Where such data exists, we based our student numbers on them, while in other countries, our data was based upon professional observations of those in the industry, figures collated from national industry associations, visa issuance figures and/or our own Status surveys as a basis for national averages.

You can find a full explanation of the methodology for the statistics used in this feature on our website www.hothousemedia.com. The Status survey, an ongoing initiative from Language Travel Magazine, surveys as many institutions as possible in all of the main language study destinations worldwide using standard questions, enabling comparable assessment of market trends around the world. Those schools that fill in our Status survey gain access to all results, of which only a highlight is printed in Language Travel Magazine.

We would like to thank the following organisations for their help and input into this feature: AAIEP, Appel, Arels, Bord Failte, Brian McCallen Research, the British Council, English Australia, Capls, CSLP, Education New Zealand, IIE, MEI~Relsa, Visit Britain.


Methodology

Below is an outline of the methods used by Language Travel Magazine to establish as realistic an estimate as possible of the total student population studying English at native English speaking countries and the total student weeks in each market.

Student numbers and weeks

The UK:
For the UK, we used comprehensive statistics from the Association of Recognised English Language Services (Arels) and cross-referenced these with figures produced by the Visit Britain tourist authority based upon International Passenger Surveys (IPS).

IPS figures are obtained by interviewing a sample of people travelling via principal airports, sea routes and the Channel Tunnel. The sample is stratified to ensure it is representative of the mode of travel and weighted to allow for seasonal trends. IPS data estimates, using this method, the total no. of visitors in the UK for the purposes of learning English. The question asked to interviewees is: Did you go on any English language classes while on this visit?

We found that the numbers estimated each year across all Arels member schools - they are estimates, as some schools only give an actual figure for total student weeks and average length of stay, and the typical sample is 90 per cent of members - reflected a 35 per cent market share every three years, given IPS statistics for total English language students in the country (IPS survey is undertaken every three years).

Both the Arels surveys and the IPS surveys fluctuate in terms of student numbers over a period of time, but the estimated market share of Arels member schools relative to the IPS numbers remained constant from 1996 to 2002, making us confident that we can use student numbers at Arels member schools as a basis for the total size of the market.

Using the latest data available at the time of going to press, Arels schools (including an allowed percentage for those schools that did not respond) accounted for 152,568 students in 2002, so total student numbers can be estimated as 435,908 (adding 65% to the Arels total). The IPS estimate for 2002 is 439,000.

For student weeks, we used a combination of the average length of stay provided by the Arels figures and the average length of stay given in Language Travel Magazine's Status survey of the UK market, in which a range of respondents across all sectors contribute, to come up with the overall figure of 8.2 weeks of average stay. This gives an overall total no. of student weeks for the UK market as 3,574,456.

The USA:
We based our estimates for the USA on the best data available - the Open Doors report 2001/2002, which actually charts the enrolments in a range of Intensive English Programmes (IEPs) during the calendar year of 2001. We also spoke with Peter Thomas of the American Association of Intensive English Programs (AAIEP) and asked him for his professional opinion about the size of the US English language teaching market - AAIEP had made its own estimate about the number of English language students in the USA.

By noting the number of IEPs (which for the purposes of this methodology will include all English language teaching institutions) in the country using our database information and noting the number of IEPs that took part in the Open Doors survey, we can make a professional observation about the market share that the Open Doors figures represent.

Given that the response rate from AAIEP members and members of the University and College Intensive English Programs (UCIEP) was 61.5% for Open Doors, and given that we know which IEPs are in these two respective associations, we estimated that the total Open Doors figures represented 32% of the market in 2001. Thomas indicated that the market had dropped in 2002, so we deducted 3% from the 2001 total to give an estimate for the 2002 market of 238,017 students. Observations made since this analysis was carried out indicate the market is more likely to have dropped overall by between 10 and 20 per cent. However, 238,017 is in line with Thomas' estimate that student numbers in 2002 were probably within the 150,000 to 250,000 range.

For student weeks, we used an average length of stay of 10 weeks, provided by AAIEP, combined with our result from the Status survey of 13.6 weeks to give us an overall average of 11.8 weeks. This resulted in an overall figure for student weeks of 2,808,601.

Canada:
For the Canadian market, there is no official data to speak of so we based our estimates on an observation by the Canadian Association of Private Language Schools (Capls) that its member schools (72 at the time of researching this article) represented 50 per cent of the private schools market in Canada.

In terms of student volume then, we assumed that the private market represented 144 schools - assuming that each school teaches a similar number of students. Then we added 48 to represent the college and university-sector programmes represented by the Council of Second Language Programmes of Canada (CSLPC) and an extra 2 to cover any other unaccounted for schools - this number was low given that each school is expected to teach the same no. of students, despite the fact that college and university programmes often have summer-only enrolments or are smaller than large private language schools.

Therefore, we came up with a total skeleton market size of 194. This also allows for the university and college sector to account for 25% of the market, which is generous according to our sources at Capls.

Using this as a basis for extrapolation, our Status survey of Canada (see Language Travel Magazine, May 2003) - with 31 schools surveyed - represents 16% of the total market. Using the student numbers at these 31 schools from our Status survey, total student numbers in Canada in 2002 were then estimated to be 142,731 (see Language Travel Magazine, May 2003 for Canadian Status survey statistics).

For student weeks, we used the average length of stay from our Status survey, which was 13.6 weeks, giving us an overall figure of 1,941,142 weeks.

New Zealand:
We based our workings for New Zealand on figures supplied from Statistics New Zealand - 'English Language data supplied by the Dept of Statistics from the sample census of English Language institutions done in March 2002 for the period 1/4/01 to 31/3/02.' This figure was 41,725 - after asking for professional observations on how much the market might have expanded for the remainder of 2002's calendar year and noting our own knowledge of the buoyant market in New Zealand in 2002, we added 15% to this figure to produce an estimate for total student numbers during the calendar year. This was 47,984 students.

For student weeks, again we used figures from our most recent Status survey of New Zealand, which were corroborated by Lester Taylor of Education New Zealand as 'consistent with what is often used in New Zealand'. Average was 17 weeks, giving a total of 815,728 weeks.

Australia:
English Australia, the main body in Australia representing English language teaching providers, employs a company called Environmetrics to produce annual statistics relating to English language student intake in the country. The data is compiled using figures supplied from 83 participating institutions and weighted by region to produce an estimate across the whole country. We used Environmentrics' 2002 figures in our market analysis as they seemed the most comprehensive figures available. Student numbers for 2002 were put at 79,418.

For student weeks, we used the average figure produced in our Status survey, which was 15 weeks, giving us total of 1,191,270 weeks annually.

Ireland:
Statistics were obtained from the Irish Tourist Board, Bord Failte, for 2002. Estimates are taken from Bord Failte's Survey of Overseas Travellers and are based on three-year averages. As respondents to the survey are aged 16 years and over, the estimates do not include language students aged under 16 years, according to the tourist board.

By using data from our Status survey of Ireland (see Language Travel Magazine, April 2003), we can see that under-16 year olds typically accounted for 10% of total English language student intake in 2002, so we added 10% to the Bord Failte figure to give us an overall total of 139,700 students.

For student weeks, we used the average from our Status survey of 3.9, which was corroborated by MEI~Relsa as a representative figure for the market - giving us an overall figure of 544,830 weeks.

South Africa:
As there is no data relating to the number of English language students studying in South Africa, we based our workings on a Language Travel Magazine Status survey of the market that was undertaken. Using our knowledge of the number of active language teaching centres in the country, we can estimate that our market survey of six schools, one of which had a significant number of students, represented 19% of the market. So we extrapolated the data accordingly to arrive at an overall figure for total students in 2002 of 7,080, given that our Status survey accounted for 1,345 students.

For student weeks, we used the Status survey average of 12 weeks to produce an overall figure of 84,950 weeks in 2002.

Malta:
Maltese figures are comprehensive and provided by the Malta Tourism Authority. The authority revealed that 57,630 students visited Malta and Gozo in 2002 to learn English. We used our Status survey average of 5.9 weeks to produce an overall average weeks figure for 2002 of 340,017 weeks.

As background reference, our Status survey of the Maltese market canvassed six schools only but student numbers across these six schools - 23,606 - represented 55% of the total number of students on the islands.

Revenue by sector
We examined the formula used by Environmetrics in Australia as a measure of total revenue spent and figures obtained from our Status surveys to some up with what we felt to be realistic method of calculating total revenue generated per market. According to Envirometrics' formula, for every AUS$1 spent on tuiton, an extra AUS$1.92 was spent overall by students in Australia.

We analysed student responses in Language Travel Magazine's Student Feedback surveys to work out that on average, in each country, 50% of students opt for host family stay and 50% of students opt for residential accommodation or another form of accommodation, such as hotel, hostel etc.

We then used figures from our Status surveys to calculate average weekly spend per country on tuition and accommodation in US$ (accommodation prices had been obtained for both main types of accommodation). By then applying the Environmetrics formula to the Australian data, we could see that a total figure that they would arrive at would include an extra 75% of spend, on top of tuition and accommodation, to account for 'other spend' - which includes domestic travel while in the country, shopping, socialising, tourist activities, etc.

We applied this formula for each country, to give total revenue generated per country and per market.

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