August 2012 issue

News Round Up
Inside the industry
Advisor Survey
Secondary Focus 1
Secondary Focus 2
Tertiary Focus 1
Tertiary Focus 2
Vocational Focus
Special Report
Course Guide
Regional Focus
Market Analysis

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Agency challenges

The reputation of a study travel consultancy depends upon it offering a high level of personal service and professionalism. However, in a highly competitive marketplace, there are always obstacles to overcome, as Jane Vernon Smith finds out.

Many of the challenges faced by study travel consultants have a direct bearing on quality of service. They hinge on the relationship with partner institutions, and with clients. In the event of a school becoming insolvent and closing, for example, agents are well aware their own reputation is also on the line. Furthermore, any failure of industry rivals to meet expected standards in business dealings can also exert a negative influence on fellow agents.

To gain satisfied clients who will generate word-of-mouth recommendation, consultants need to ensure they are working with high-quality partners. As Marja Teikari-Tuovinen from White House in Finland points out, the consultant is dependent on partner educators for delivering the promised programme, and when problems occur, has to take responsibility for matters outside its control – such as unsatisfactory host families. Assessing the quality of teaching is very difficult, she comments, “because there are very few occasions when agents can observe lessons, in spite of the fact that it is the most important element in the whole business”, and, she adds, schools are often represented at workshops by their marketing staff, who don’t know a great deal about tuition.

Ely Vargas of Paraguayan study travel consultancy, Go World, has some suggestions to improve the agent-educator relationship. She points out that it is not constructive to treat a small country of six million people, such as Paraguay, in the same way as a large country of 180 million, such as Brazil. “It is like having children: none is the same, and each one needs special treatment or care,” she observes. Vargas believes that educators should offer a different price list for every country or region. She also suggests that partners should give more marketing support, such as materials, videos and visits, and would like to see special promotions being offered for small countries.

Dubai-based consultant, Suad Alhalwachi, Director of Education Zone, believes that the financial basis of the agent-educator relationship needs to change. It is unfair, she maintains, to expect agents to spend time and money promoting schools without guarantee of any payment. Instead, “We must be paid by the universities [an annual] lump-sum to do [a] proper deliverable marketing campaign – and reduce the commission percentage, if they like.”

At Educational Business Links in Albania, Vilma Fida is keen on joint working, and appreciates partners who are prepared to organise joint promotional activities. However, she notes, “Not all partner schools are willing to undertake these [kinds of activity], which would profit both businesses.” Thus, a major challenge is to persuade more schools to enter into such projects, and, “We would appreciate [it] if agent organisations [would] help us in this process.”

Direct bookings
The Internet has, of course, had a significant effect on the business environment for international education. While for educators, the changes have been for the most part positive, for study consultants they have been more mixed, as Necdet Bilgen from Turkish consultancy, Biltur, observes. While it has enabled agents to communicate instantly with clients, it has also enabled clients to compare prices more easily. In doing so, what they do not always see, he points out, is that the level of service provided may be totally different.

The ease of gaining information and of booking directly via the Internet means it is vital that consultants can convince potential clients of the benefits of using their services, with “the shelter of an experienced agent that can supply information and all services”, comments Brazilian agent Derlene Calpacci, owner of Didacta Cursos No Exterior – and all for the same price.

Accessibility can be an issue, and in order to make its own service more accessible to clients, Korea’s Ukak.com has recently opened more offices throughout the country, highlights Director of International Affairs, Julia Hong. “We believe that the Internet is a valuable tool, but in most cases, it doesn’t trump personal service,” she underlines.

Nevertheless, direct booking is becoming more prevalent, especially among those undertaking repeat trips, as Ukrainian consultant Irina Kuzmenko of DEC Educational Consultancy highlights. Not only do school websites encourage this, notes Brunella Belluomini of Italian consultancy Language Data Bank, but with booking systems that are increasingly easy to use, and in several languages, potential clients have no problems booking online.

Agents are well aware it is generally a one-way process in terms of promotion. While it is the agent’s role to promote its partner schools, “We have never – and this is [during] the past eight years – experienced a school [that] referred a student to an agent,” observes Gorm Cramer of Viking Agencies in Denmark. “If they can, they take the booking themselves. I do not blame them for it, but I wish it was different.”

He adds that the agency makes “no secret of which schools we advertise”, and this is another factor that facilitates direct booking. “A lot of other agents hide the name of the school until after a booking has been made,” he says.

And Alhalwachi estimates, “We lose more than 50 per cent of our business due to direct enrolments.” Anxious to stem this trend, “At present, I only advertise the names of colleges that we work with on our website, if they pay me a fee.” Meanwhile, however, schools tempt students by offering direct-booking discounts. “We cannot participate in such price wars, and, if we find a school undercuts, or shows discounts on their websites, we stop working with them,” she advises.

Agents also frequently lose out on commission they are entitled to in the case of an extended stay or repeat business. MLS in the UK, is, highlights Kuzmenko, one of the few educators that “keeps us informed about direct students from us, or any course prolongations they made”.

With the client pool for advisors slowly and surely being eroded, advisors need more than ever to establish a reputation as serious consultants – not just sellers of a product – says Belluomini, and to specialise in a particular field, as Language Data Bank has done in corporate programmes.

Price discounting
Other challenges relate to competition with other consultancies in the market. In some countries, price discounting is rife, and some believe this has escalated to a serious level. “The Korean market has been faltering recently because of cut-throat competition and problematic tactics that could affect the industry worldwide,” explains Hong. “With the growth of fierce competition, agencies may continue to seduce students with their own discounts, sacrificing their own profit,” she notes. If this continues without any control or regulation, she believes agents will be forced to lower the quality of their service, or alternatively pass on the burden to their educator partners, which, she believes, “might result in the collapse of the industry’s healthy growth”.

Calpacci also recognises this is a serious problem in the Brazilian market. “I [have] heard about agencies that offer almost all the commission as a discount,” she reports. And according to Yana Lukina from Derzhavin Institute in St Petersburg, one way that some in Russia have compensated is to offer additional services, such as insurance, and to make a charge for visa assistance, for example. However, in the prevailing harsh competitive environment, her company relies solely on commission received from educator partners.

Elsewhere, established operators may sometimes be able to rely on their good reputation to rise above price competition. “We [at Biltur] are immune to the problem of price cutting, thanks to 32 years of experience in this business,” explains Bilgen. “Our clients are mostly return customers or new customers who are recommended by our former customers. They are not [going] to switch to another agency just because it is cheaper.” Nevertheless, the situation is particularly damaging to newer businesses that are struggling to make a name for themselves.

There is also another side to this argument. Bilgen argues that one of the most significant challenges the educational travel business faces today is the number of new, inexperienced agencies to which schools are giving representation without proper research. He observes that these agencies can give unrealistic promises, which ultimately “leave a bad taste in clients’ mouths”, while other agents are left to set the record straight. This has the potential to damage the industry as a whole.

Meanwhile, it has been well documented that the industry attracts many unscrupulous agents across world markets, which risk damaging the reputation of others by association, and thus makes recruitment more difficult. “This gives us a hard time,” Lebanese agent, Marie-Claude Saliba, reports.

While it is not in the power of their competitors to eradicate rogue operators, there are measures that the former can take to protect themselves. Belluomini believes that agent associations have a decisive role to play in this area, commenting, “The industry is full of unscrupulous agents, very often helped by unscrupulous schools, but this happens in countries where weak agent associations exist – and I am in one of these countries,” she admits, despite her own efforts in founding the Italian association, Ialca.

Benefits of expansion
Another way in which consultancies can act to strengthen their own individual market position is through expansion, either by opening new offices or by acquiring existing businesses. As smaller operators will point out, chains have more market presence due to their sheer size, helping them to gain lucrative contracts with government organisations, as Alhalwachi observes. Small and newer consultancies, meanwhile, “count on word-of-mouth, partnerships with certain schools and a great deal of creativity”, according to Calpacci.

Those businesses which combine a study travel consultancy with a language school also benefit from the synergies so gained. As Lukina explains, “Our agency was opened up on the basis of a language school, so most of the students of this school become participants of study abroad programmes. The advantage...is that we find our future clients among students in our language school.”

Similarly, Hong Kong-based Oxford Oriental Language Programmes has a small language school in Hong Kong - The Oxford Oriental School of Languages - while Oxford Oriental Languages Abroad caters for those who want to travel abroad for some immersion learning, comments Director, Tom Smith. An additional benefit of this structure is, as he points out, that its students also get the chance to meet representatives from its partner schools when they drop in during their regular marketing trips.

Visa nightmares
Another major challenge for many consultants is visa policy. Clearly, the assistance they can provide in negotiating a client’s way over this hurdle is a key part of their role. Yet, many who offer programmes in a range of different countries find themselves struggling to find their way through the varying – and constantly changing – systems used.

The experience is not universally bad. Some report good support from embassies and/or school partners. Hong, for example, reports that her business has not experienced any problems in keeping up-to-date, since the embassies for most countries offer seminars on a regular basis, as well as send routine updates via email. Acknowledging the intricacies of visa matters, Brazilian consultancy Didacta has solved the problem by using “a very specialised broker” to take care of visas, Calpacci explains, while taking on direct responsibility only for the UK Student Visitor Visa.

Meanwhile, however, Smith in Hong Kong is one who highlights visas as a particular challenge at present, mainly in the case of students wishing to travel to the UK. The changes in immigration policy have made the situation much more complicated and, he admits, “It is difficult to keep up.” Furthermore, an increasing number of clients holding mainland China passports pose a further challenge.

For Timpany Languages, based in Barcelona, Spain, the situation is still harder to keep tabs on, since it deals with various nationalities travelling all over the world, notes spokesperson, Elinor Zucchet. At Educational Business Links, Fida reports that information is gleaned from embassy websites and from the collaboration of partners in the respective countries. However, “This actually takes a considerable time [for] our staff.... Not all embassies are willing to give information easily [that is] simple to [understand]. It would be very helpful if representatives from our partner schools would visit the respective embassies and help us in the process,” she suggests.

While the challenge of visas has been a perennial constant, many of the challenges facing advisors continue to evolve with the industry. This is an intrinsic part of business life and is a key driver for success. Hence, “Challenge is our mission,” declares Ellen Weijand from Netherlands-based consultancy Travel Inventive.

Agent training schemes

School associations are keen to support the work of advisor partners where they can, and help them meet the challenges of a growing industry. Many now offer updates on visa and other legislative changes, as well as run accreditation schemes.

“We have participated in many training schemes, which were very useful for our staff,” comments Vilma Fida from Albanian consultancy, Educational Business Links. The company has consequently received accreditation from many national and international institutions, she says.

Agents also often receive training support from their partner schools when they visit. At DEC Educational Consultancy in Ukraine, Irina Kuzmenko believes in the value of such training, and comments, “It is at our initiative that a training seminar is held when our partners’ representatives visit our office or communicate with us via Skype. We are sure it pays off.”

Fam trips are also a good source of support for agents, as Marie-Claude Saliba from Lebanon’s Educom Overseas relates. “Exeter University has done a great fam trip this year, where one of my staff...visited the university..., and was told about [the] admissions process [and] types of visas. Kingston University has done the same.” She adds, “I think it is a good thing, and we can train our staff more easily.”

Korean consultancy, Uhak.com, runs its own “extensive and intensive” internal training/study programme, designed to improve and update the knowledge and skills of all its employees, reports Director of International Affairs, Julia Hong. Its agents also attend occasional, selected workshops. “We have no trouble gaining accreditation from school organisations, and make use of many opportunities to meet with their personnel,” she adds.

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