||One of the most significant trends that has occurred over the past 12 months is the amount of innovation and development that has taken place in the industry. A cursory glance at some of the previous news pages in Language Travel Magazine shows an industry that is continually developing, with businesses changing hands, new schools opening and technological advances being made. And all this has occurred amid the backdrop of an economic shift that is now threatening to bring a recession to many parts of the world.
At the beginning of the year the difficulties experienced by the US sub-prime mortgage lenders offering high interest mortgages with a higher level of expectation of risk were beginning to make themselves felt as more and more borrowers in the USA defaulted on their loans. Investments in sub-prime companies became worthless and a number of high profile banks in the UK and USA experienced difficulties or were forced to close their doors. The resulting economic slowdown coined the “credit crunch” by the world’s media has been exacerbated by rising fuel and commodity prices worldwide and many countries now face an uncertain economic climate.
The effect on student markets so far appears to be muted but nevertheless, agents have been reporting a noticeable slowing down in business in some regions. A participant in this issue’s Agency Survey feature on Thailand says that business is not expected to grow as “the national economy is not expected to improve because of high costs and inflation”. Antonio Anadon from Spanish school chain, Enforex, in Spain adds that the increase in value of the euro is making European destinations expensive for some. “The US dollar is very weak at the moment and we have lost a lot of business from this [US] market,” he explains. “It is not the number of students that is going down but the number of weeks, as US students are finding Europe 50 per cent more expensive than last year.”
However, agents and schools also point to the fact that parents and students often view their education as an investment in the future, which provides a certain buffer from economic woes. Kian Hwan Le from the University and College Placement Agency in Indonesia, says, “[Economic troubles in our country] do not affect business much since those parents who are sending their kids abroad already prepare way in advance.”
To deal with any potential economic decline, as well as other problems put in their way, agents and schools are being proactive in diversifying their product range and reaching new students. Laurent Huc from Nacel International in France says that difficulties thrown up by government policies and local trends have forced them to stay on their toes in terms of the diversity of their product range. “Business has been affected by ever bigger problems in recruiting host families which is why we are innovating so much in our product range,” he says. “Government regulations have also pushed us to innovate as new restricting rules are always coming up.”
Visa woes and joys
For individual businesses, the most significant developments that can affect operations are usually those concerning visas and 2008 has seen developments both good and bad in this area. One development that can be perceived as having both a positive and negative effect on the language travel industry is the increasing technological advances being introduced in this area. From January this year all visitors entering the UK on a visa were required to submit biometric data in person when applying for their visa, which while helping to make the system more reliable for genuine applicants, has also caused problems in some countries. Russian agents reported earlier this year that students had to attend one of three embassies in the country to have their fingerprints scanned and this was affecting business to the country (see LTM, May 2008, page 7).
It is expected that this and other situations to do with the advent of new technology will improve in the future as the system becomes more finetuned, especially as governments in a number of countries are relying more heavily on proving a person’s identity through biometric information. The UK is to require all non-EU students to have a biometric identity card from April 2009 and all students varying or extending their leave to remain were issued with a card in November this year (see LTM June 2006, page 6). A similar system was also introduced in Ireland this year when the Garda National Immigration Bureau introduced the requirement that all those registering to remain in the country for more than three months, must have their fingerprints embedded in a biometric chip on their registration card (see LTM, November 2008, page 7). It is surely just a matter of time before this system becomes standard across many student destinations and may help make the visa application system more straightforward.
Extra visa costs for both students and schools reared their ugly head this year in the UK, Ireland and the USA. The UK government announced that language schools would have to pay a £10 (US$18) fee per student when enrolling those from outside the EU, under the new visa regulations due to be introduced in 2009, as well as a one-off sponsorship fee of £400 (US$710) (see LTM, August 2008, page 6). Meanwhile, in the USA, the non-refundable fee to apply for a student visa and be registered with SEVP increased by 100 per cent to US$200 (see LTM July 2008, page 6). In Ireland, the fee to register with the Irish police increased to e150 (US$207) from e100 (US$138) in the summer (see LTM, November 2008, page 7). As Margaret Purdy from Swan Training Institute in Ireland points out, while the actual monetary value of the change is relatively small such changes can “make students nervous”.
There were also changes to the Australian student visa system assessment levels in September. Sebastian Barrientos from Grasshopper International in Colombia says that this has had a significant effect on business. “I think the biggest change this year is that Colombia changed in assessment level from two to three, which makes everything more difficult,” he says. However, other student markets reaped the rewards of these changes, with the Chinese market likely to grow, for example, as the Ielts 5 requirement was removed from Chinese students’ visa applications (see LTM, November 2008, page 6).
We are currently living in a digital age and aside from the increasing technology used by governments monitoring the influx of students into countries, schools and agents are both enhancing their technological capabilities to ensure they are up to date. In March this year, an Australian Director of Studies launched an e-test for agents to assess their clients’ language abilities online and therefore advise them better about the best course for their needs (see LTM, May 2008, page 8), while in schools worldwide, interactive whiteboards, e-learning facilities and even daily language learning podcasts (see LTM, July 2008, page 8) are becoming a common part of language learning.
The importance and value of incorporating digital technology into the classroom was highlighted at the LTM Star Awards when Study Group won the LTM Star Innovation award for the new multi-million pound school facility in Brighton, UK, and general use of technology including video link-ups between classrooms. Agents around the world voted in this category and Study Group’s Johnny Peters emphasised that the company was putting a lot of effort and financial resources towards making sure that their schools were at the forefront of teaching technology.
Technological innovation, however, has not just been confined to within the four walls of a classroom and agents too are getting in on the act. At the end of last year, global agency iAE held a director’s conference and unveiled its own client relations management computer system for use by all its partners (see LTM. April 2008, page 8). This is a trend that may become more apparent in the future for both agents and schools. Jan Capper at Ialc says that the Internet has been playing a greater role as a marketing and booking medium this year. “In the next few years, we may even see the end of the large printed brochure, as agents and students increasingly source information online,” she ventures. “There is some evidence this year of an increase in direct bookings for language schools, but it may be just a blip. As we’ve seen in the past, agents can adapt and respond.”
Mergers, acquisitions and new developments
A newcomer to the industry would probably be bewildered by the impressive expansion activities of a number of large chain schools this year. Navitas, Study Group, EC and EF opened new schools this year in the USA, Canada, Australia and the UK. An important development that has been highlighted this year is that of operators dealing exclusively with university preparation and pathway programmes, which have exploded in number recently.
Navitas, which operates colleges on the campus of universities and offers a range of pathway programmes, moved into the UK and Canada this year, from Australia (see LTM, April 2008, page 6). Meanwhile, Study Group, Into University Partnerships and Kaplan Aspect, anxious not to get left behind, all followed a programme of expansion in this sector with new buildings and impressive facilities in the UK and USA.
UK-based Into university partnerships has made impressive strides in this sector of the language teaching market in the UK and now administers six centres throughout the UK. Tim O’Brien, Managing Director of UK Operations, says that the company has plans to operate centres in 10 different countries by 2012. “Part of the partnerships [with universities] are to build new study centres. We will develop new facilities,” he says. “It is important that the facilities offered are as well classed as the academic programmes offered.”
In non-English speaking destinations, improving facilities and building new schools is also on the agenda. In Austria, Actilingua opened its newly renovated school building in Vienna this year, while Sprachcaffe opened its brand new school in Mexico in November (see LTM, September 08, page 7). In Spain too, Anadon reports that they have been investing in new school facilities lately. “Don Quijote is moving to a new school in Barcelona while the Madrid school is moving to a new location that used to be a palace,” he says.
Another language school with big plans for the future is Prime Education, which kicked off the year with the acquisition of Kings Group, with schools in Bournemouth, Oxford and London in the UK (see LTM, June 08, page 7). Prime Education hopes to add to its portfolio in the coming year and become a major player in the language travel industry.
The increasing crossover between schools and agents was evidenced this year when Kaplan Inc, owner of Kaplan Aspect, bought Swiss agency, Pro Linguis and joined Navitas in Australia and Don Quijote in Spain as other schools owning or part-owning agencies (see LTM, October 2008, page 8). This marks a slow trend towards schools being more involved in the supply side of the chain.
Rob Brown from Navitas, which part-owns Edu Global in China, explains that the benefit for schools is more than just gaining a steady supply for students. “This partnership gives us valuable on-the-ground market information about China,” he says. Capper believes that such expansion activities will continue in the future. “Consolidation shows no signs of abating,” she says. “Small independent schools remain attractive targets for takeover and even agencies are now being bought up by large corporate groups.”
Some agents also showed ambitious expansion plans this year with Discover Canada in Mexico teaming up with Global Connection Education Service to offer a greater range of programmes for Mexican clients beyond Canada (see LTM, September 08, page 8). In Spain too, expanding business is on the menu at the Sheffield Centre, which opened Wired Spain Languages for inbound students (see LTM, September 08, page 8).
Two language school associations celebrated significant birthdays this year, showing their longevity and increasing importance within the industry. In April, Ialc celebrated its 25th anniversary with a special gala dinner at its Munich workshop, while in May Nafsa celebrated its 60th annual conference in Washington. Language schools in Canada also saw their two national school associations amalgamate to form one body in an effort to better serve their members (see LTM, May 08, page 6). This move largely generated a positive response as the industry in Canada marches towards a system of compulsory accreditation linked to visas.
The work of language school associations continues to be key to driving change and giving the industry a channel to governments and lawmakers. In the USA, this work has been particularly important this year in contributing to a bill, currently before the Senate, that will require language schools in the USA to be accredited.
Language school accreditation has been a hot topic for many years and in many destinations there has been significant development in this area. This year also saw the UK and New Zealand develop agent training and qualification programmes (see LTM, April 2008, page 8 and October 08, page 8). In the USA, it is hoped that the setting up of the American International Recruitment Council (see page 6) will encourage more higher education providers in the country to use the services of agents when recruiting overseas.
Overall, 2008 brought many positive changes to the language and education industry including a greater resilience due to a growing number of key student provider countries. It is to be hoped that the days are gone when the economic troubles of one country will decimate the study abroad industry elsewhere, as most destination countries now rely on a greater range of student markets.
Capper says that Ialc member schools have experienced some dramatic fluctuations in their source markets in 2008. “It’s less a case of markets in decline as switch-selling France sending students more to the USA than the UK for example. These fluctuations are down to a variety of factors, from visa regulations to exchange rates, perceptions of security and fashions in travel destinations.”