August 2013 issue

News Round Up
Inside the industry
Agency 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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Japan's economy

A growing economy is having a positive effect on business among study travel agencies in Japan. Course demand is also diversifying.

Key points
The total number of students placed by the 11 agencies in our survey was 7,830

Individual agencies placed between 10 and 6,000 students on courses per year

Average business growth was 10 per cent

The average length of stay for CE European students was 19,6 weeks

Overall, 74 per cent of CE European students preferred host family accommodation when studying overseas

The largest percentage of Japanese students (28 per cent)were studying for the purpose of further studies overseas

Language study is the largest sector of the study abroad market for Japanese agencies (67 per cent)

Most popular course requests Average percentage of agency business by sector
1. General 24%
2. Summer vacation 23%
3. Intensive 21%
4. Academic prep/university foundation 12%
5. Business 6%
6. Junior 6%

7. Language plus work 3%
8. Other 5%
1. Language programmes 67%
2. Secondary
education abroad 11%
3. Higher education 10%
4. Internships 6%
5. Work and travel 6%

Reasons for studying overseas Top destinations

1. Further studies overseas 26%
2. Future work 21%
3. Pleasure 18%
4. Current work 17%
5. Further studies at home 17%
6. Other 1%

1. Canada 32.7%
2. USA 28%
3. Australia 13.5%
4. UK 12.5%
5. New Zealand 5.5%
6. France 1.8%
7. Ireland 1.3%
8. Germany 1.2%
9. Italy 0.9%
10. Spain 0.8%

11. Other 1.8%

How do agents recruit students?
How do agencies find new schools to represent?
1.Wesite 30.5%
2. Word-of-mouth 16.5%
3. Seminars to students 15%
4. E/online marketing 12%
5. Advertising in press 5%
6. Mail shots 4%
7. Other 17%
1. Internet 46%
2. b2b conferences 18%
3. Language fairs and student expos 11%
4. STM 6%
5.Other 19%

Market growth

The majority of the 11 Japanese agencies who took part in our survey recorded that business increased over the last 12 months, with just two posting a decline in student numbers. Growth rates ranged between 10 and 25 per cent and the overall average growth was 10 per cent.

This buoyancy largely reflects Japan's growing economy, which emerged from recession at the end of 2012 in response to aggressive measures introduced by new Prime Minister Shinzo Abe. Hideki Matsumaura from the Japan Research Institute said in a news report by the BBC, "The economy is expected to grow further for now, thanks to the impact of 'Abenomics'," referring to the Prime Minister's policy to introduce big government spending and getting the central bank to add trillions of yen into the money supply to push down the currency's value. This has curbed inflation and made Japanese firms more competitive in the overseas markets. Gross domestic product grew 0.9 per cent in the first three months of 2013, compared with the previous quarter, indicating an annualised rate of 3.5 per cent.

The boost to the economy has the effect of giving parents and students more confidence in booking study abroad courses, while increasing scholarship funding for Japanese students studying overseas has also boosted business for study travel agents in the country. The Japanese government spent ¥600 million (US$6m) in grants for overseas study in 2009, and increased this figure to ¥3.1 billion (US$31m) in 2012 with a further ¥3.5 billion (US$35m) budgeted for 2013.

Language and destination trends

Just over 92 per cent of Japanese students were interested in studying English overseas, with five agencies saying that they only dealt with English language programmes overseas. This figure is slightly less than last year's 94.5 per cent and perhaps reflects a growing interest in leisure courses where the experience of learning a language overseas is purely for pleasure. One agency had a fairly even spread of students requesting English, French, Italian, German and Spanish courses, while another recorded that 15 per cent of their clients requested Chinese study courses.

There were no surprises when it came to destination trends for Japanese students this year, with the English language destinations Canada, USA, Australia and the UK coming out on top. This ties in with a recent survey conducted by Ryugaku Journal — a large agency with five different offices in Japan — of their own student trends, along with the observation that Australia, as a destination, has declined in popularity with Japanese students in recent years. According to our agency survey, Australia attracted 17 per cent of the market share last year (13.5 per cent this year), while the Ryugaku Journal survey reveals that Australia dropped in popularity as a destination for their clients by 11 per cent in the past year. The reason for any decline is difficult to pinpoint, but perhaps relates to the greater spending power of students and parents who are able to consider other destinations that would have been deemed too expensive in the past.

Student and course trends

The types of courses chosen by students wanting to study overseas were a lot more evenly spread this year, compared with last year's results. Summer vacation programmes (23 per cent), business (six per cent) and academic prep/university foundation courses (12 per cent( had all increased their share, at the expense of general (24 per cent( and intensive language courses (21 per cent) compared with last year. Greater interest among Japanese students for less career focussed study programmes may be attributed to a growing economy. It could also account for the large percentage (18 per cent) of those undertaking courses for pleasure only. For individual agencies, the percentage of students studying overseas for pleasure only varied between 10 and 80 per cent, while last year this average across the agencies was only 10 per cent. One agency revealed that they would like to offer more vacation, volunteer and internships programmes in the future to meet client demand.

Agency business

Language programmes accounted for slightly less of the market share than in our previous year's survey (67 per cent compared with 78 per cent previously). Instead, higher education and high school programmes increased their share to 10 and 11 per cent respectively. The government's increased interest in encouraging more Japanese university students to study overseas may have affected this market split recently, although Megumi Makihara from Be Ryugaku says that she predicts this to have a greater effect in the future. "Not much [has affected] my business in the last few months," she says. "But the Japanese government has started focussing on global education and experiences which should affect my business for the next year."

Agencies in Japan worked with an average of 40 schools in nine different countries in the last 12 months and preferred to source new educator partners via the Internet, as 30.5 per cent of new business partners where made this way.

Looking ahead

While the outgoing study abroad industry is often dependent on economic conditions within a country at any time, Junji Kotani from Pure Canada points out that this is only part of the story. "It is the effort of each company that will attract the number of students," he says. "When the economy is bad, people will lose the opportunity to get jobs, so they tend to go abroad to gain personal growth or improvement. When the economy is good, people are more likely to have enough money to go abroad. But on the other hand, when the economy is bad people don't have enough money to go abroad, and when the economy is good people have lots to choose from the job market."

Overall, however, agencies in Japan are positive that business will continue to grow and diversify in the future. One agent who took part in our survey reveals, "I think the economy is picking up and I feel more people want to send their kids abroad. More university students also want to maybe take a year off and study abroad and we saw an increase in working holiday applications."

Japan Key Facts

Population: 127,253,075

Unemployment: 4.4%

GDP per capita: US$36,200

GDP growth rate in 2012: 0.2%

Inflation rate in 2012: 0.1%

Exports in 2012: US$792.9 billion

Export commodities: motor vehicles, semiconductors, iron and steel products, auto parts, plastic materials, power generating machinery.

Imports in 2012: US$856.9 billion

Import commodities: petroleum, liquid natural gas, clothing, semiconductors, coal, audio and visual apparatus.

Thank you to the following agencies for taking part in this survey:
Be Ryugaku, Global Daigaku.com, Hokkaido Ryugaku Club, IC Travel, International Education Consultants (IEC), Little Europe, Network Communications, PURE Canada, Ryugaku Journal, WEC, WYS World Youth Service Society.
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Generation Estates  

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FAAP - Fundação Armando Álvares Penteado  
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Boa Lingua  
ESL Ecole Suisse de Langues  
Idealist Education Consultancy  
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World Study Head Office  

English Australia  

ILSC - International Language Schools of Canada  
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Dr. Walter GmbH  
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Genki Japanese and Culture School  
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Academic Colleges Group  
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