December 2011 issue

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The Global Market 2010

2010 for the English language teaching market was not without its challenges. Immigration shakeups, currency fluctuations and the tail-end of the global economic slowdown all played their part. And while there is evidence of an overall decline in student intake and global revenue, this year’s analysis of global market statistics goes some way to prove what an economically viable industry it still is. Nicola Hancox reports.

Analyses of the 2010 English language teaching market threw up some real variations in comparable statistics. While the market appeared to retract for six English language teaching destinations, two markets recorded encouraging, albeit marginal, business growth in terms of both student numbers and student weeks (which takes total number of enrolees and their combined length of stay in the country). Overall, the total number of students studying English in the eight main language teaching destinations in 2010 was 1,423,379, compared with 1,469,171 (see LTM, November 2010, pages 46-50). This three per cent decrease in enrolments paints a somewhat bleak picture of the ELT market. More dark clouds loom in the shape of total student weeks, which dropped six percentage points to 11,717,450 in 2010, and total revenue earned; US$10,524,317,039 compared with US$11,432,318,511 in 2009. So what happened?

Downturn down under
In 2010, both the Australian and UK governments set out to tighten student visa regulations and as a result the respective markets braced themselves for an impact in student commencements. Indeed, according to this year’s annual survey of the global English language teaching market, total student numbers in Australia dipped by 9.9 per cent in 2010, to 140,102 students. Sue Blundell from English Australia reflects that strong growth experienced in previous years was primarily driven by the increasing number of student visa holders in the country. With tighter immigration controls implemented in 2010, however, the number of student visa holders declined dramatically, impacting the Elicos sector in particular. The English Australia Survey of Major Elicos Regional Markets estimated this decline to be 19.4 per cent, while the number of students with other visas declined by 24 per cent. Interestingly, Visitor visa and Working Holiday visa numbers grew by 19.7 and 5.2 per cent respectively in the same year – although this was not enough to compensate for the strong overall decline, points out Blundell. In the case of the Visitor visa, international students were clearly showing a preference for shorter stays in 2010. This trend is further evidenced in Australia’s total student weeks figure, which dropped –14.8 percentage points on 2009 results. Indeed, with the decline coming from longer-stay student visa holders and the growth coming from shorter-stay visa holders, average number of weeks studied per student decreased from 12.6 in 2009 to 11.9 weeks in 2010.

However, there were some emerging positives. Japan, Taiwan, Switzerland and France (all top 10 source countries for Elicos providers in Australia), bucked the downward trend and increased in terms of student numbers in 2010.

And while early indications suggest Student visa numbers continued to fall in 2011, Blundell is confident change is just around the corner. “We will end up back around 2006 levels by the end of the year [2011],” she affirms. Add to this the Australian government’s positive response to the Knight review, which looked to address the challenges the export education industry faced in relation to student visas (see STM, November 2011, page 7), and growth is almost certainly on the cards for 2012.

The UK’s stiff upper lip
By all accounts, Australia fared much worse than the UK. In 2010, despite the barrage of changes implemented by the UK government in relation to immigration policy, total student numbers grew by 5.2 per cent to 654,923 students. The UK also, at first glance, appeared to have the lion’s share of the overall student market, accounting for 46 per cent slice of the total, a trend that has been consistently reported over the last few years. The UK represented 42.3 per cent of the global student intake in 2009 and 42.9 per cent in 2008. However, there is a propensity for short-term stays in the UK and therefore when we analyse the global English language market by student weeks – of which the UK accounts for just under a third (see figure 2) – the playingfigure 2) – the playing field noticeably opens up to rival markets the USA (25.6 per cent) and Canada (19.3 per cent). Closer analysis of average length of stay reveals little change from previous years, with international students staying, on average, 5.7 weeks in the UK, compared with 5.9 weeks in 2009 and 5.6 weeks in 2008.

“2010 was the sixth consecutive year of growth for the UK accredited sector,” affirms Tony Mills, Chief Executive of English UK. However, he laments, “It may not have felt as good as it was.” Millns cites the increased restrictions on General Student Visas as having had an affect on the general health of the industry and indicates a noticeable shift among member schools towards the Extended Student Visitor visa route (whereby students can stay and study in the UK for up to 11 months) and an increased focus on EU source countries which could throw up some interesting findings in next year’s analysis of the 2011 global market.

In terms of revenue earned, the UK continued to eclipse other ELT destinations, accounting for 38.7 per cent of the global ELT market’s total worth. As one of the more expensive ELT destinations this is perhaps unsurprising, however. Average spend per week – which combines tuition and accommodation costs – was US$1,092, albeit US$93 cheaper than in 2009.

The luck of the Irish
Ireland looked to chortle in the face of adverse market conditions by posting encouraging growth figures in 2010. National tourism board, Failte Ireland, responsible for a yearly survey that charts English language student intake in the country, received feedback from 63 Acels accredited schools out of a possible 112. It is worth noting that results were rounded up to account for those not represented in the survey.

Ireland attracted 96,250 students in 2010, a 2.5 per cent increase on 2009 figures. Average length of stay was largely in keeping with 2009 (3.8 weeks compared with 3.3 weeks), although that extra 0.5 boosted total student weeks by 18 percentage points.

Reflecting on 2010 business, David O’Grady from Irish language school association, MEI, says that long-term students from Saudi Arabia, Korea and Brazil helped significantly boost revenue for ELT providers in 2010 (total revenue accrued for 2010 stood at US$320,031,250). However, he emphasises the importance of Ireland remaining competitive if growth is to continue. “Domestically, Ireland has to remain competitive. Costs for host families, residences, transport, daily living...have to remain competitive. Otherwise, international students can’t afford to stay in the country.”

Indeed, in line with O’Grady’s summations, the average cost of one-months tuition actually decreased in 2010 from US$1,572 to US$1,116, while average spend per week fell from US$1,183 to US$875.

Not so sunny Malta
What it may lack in size, Malta certainly makes up for in market share. Accounting for 5.1 per cent of the total market by student number (more than both New Zealand and South Africa and but 1.6 per cent off of Ireland), it has, however, seen numbers peter out of late. In 2008, the total number of students studying in Malta was 83,288, falling to 77,436 in 2009. This year, numbers decreased by a further 6.1 per cent to 72,695.

According to Malta’s National Statistics Office, Italy, Germany, Spain, Russia and France accounted for almost 75 per cent of all student arrivals in the country in 2010. Considered ‘short-haul’, their close proximity is best reflected in the country’s habitually low average length of stay (2.5 weeks), on a par with 2009’s findings. As a consequence Malta remained bottom of the league table in terms of student weeks (181,737).

In 2009 foreign currency exchange rates negatively impacted the ELT sector in Malta. However, 2010 produced early signs of recovery following a challenging 2009. Average spend per week decreased only slightly to US$653, down from US$683 previously. Interestingly, Ireland – which also utilises the Euro – was approximately US$222 more expensive per week than Malta.

New Zealand prepares itself
This year, Statistics New Zealand announced that it would no longer compile specific data on behalf of English language providers in New Zealand. For the purposes of this article we have used the country’s Export Education Levy sourced from the Ministry of Education. These statistics are currently the primary source of information the country has on the private sector but it is worth noting that there may be some disparity with 2009 data.

Total enrolments were estimated to be 41,154, compared with 41,798 in 2009 (the Export Education Levy recorded 40,800 international students in 2009); marking a 1.5 per cent decrease in student numbers overall. Indeed, Rob McKay at English New Zealand notes that business, for the best part, had been “relatively steady” up until September 2010, when the first of two earthquakes rocked the city of Christchurch, where a number of language schools are concentrated. “Immediately following the September earthquake enrolments dropped off with the January – March 2011 quarter showing a drop of five per cent against an expected seasonal lift of about seven per cent for that quarter,” says McKay.

The second, and by far the more devastating earthquake, struck in February 2011, and McKay laments that the impact for the full year will be significant. “This event had a major effect on export education in Christchurch as many central city English language schools closed, and remain closed. Student numbers to providers that remained operational fell dramatically.” But McKay is keen to point out that stability has returned to the city and that its student base is gradually rebuilding.

Average length of stay for students studying English in New Zealand decreased from 11.1 weeks in 2009 to 9.5 weeks in 2010. This dip undoubtedly had a knock on effect in terms of student weeks, with total share decreasing by 15.9 per cent.

Oh Canada
A strong Canadian dollar may have deterred some students from studying in Canada in 2010, relates Gonzalo Peralta at Languages Canada, but its effects were largely contained. The country remained in third position in terms of market share by student numbers (13 per cent), student weeks (19.3 per cent) and total revenue earned (17.2 per cent).

Using the best statistical data available, total student numbers appeared to decline for Canada, albeit marginally (down 1.5 per cent to 190,147 in 2010). Meanwhile, student weeks decreased by 4.6 per cent which could be attributable to a slightly shorter length of stay (down from 12.3 weeks in 2009 to 11.9 weeks).

This downturn could well just be a minor blip in an otherwise healthy ELT market. The King Abdullah Scholarship Programme (KASP) appears to be the gift that keeps on giving, with this source country providing a relatively stable student base for Canadian language training and post-secondary institutions in 2010. Strong enrolments from Korea, Japan and Brazil also proved valuable source markets for Languages Canada member schools in 2010. Peralta is confident that 2011 numbers for member schools “look good”, with the organisation driving forward in terms of marketing. Gaining access to the international education marketing brand – Imagine Education (see STM, May 2011, page 8) – was a real coup for the association and will certainly give member schools more credence in the eyes of the government, agencies and indeed students.

USA downsizes
After several years of exponential growth, the USA’s ELT market looked to slow down in 2010. Taking the most recent data available, the USA posted an 11.2 per cent decrease in student weeks and a 19.9 per cent decrease in total student numbers. However, it is still the second highest revenue earner behind the UK and is still responsible for over a quarter of the global English language market by student weeks (see figure 2).

It is difficult to quantify what factors may have contributed to this evident slump. The global economic downturn may certainly have affected some traditional long-stay source markets, although this was not necessarily apparent in terms of length of stay, with the US notching up the longest average across the board; 14.2 weeks compared with 12.8 weeks previously. What’s more, according to AAIEP’s Jeff Hutcheson, Saudi Arabia, China, Switzerland and Libya – all traditional long-term student source countries – all grew in terms of numbers in 2010. Other key issues, signalled by AAIEP, that may have contributed to the market’s retraction were budget cuts at state institutions and capacity concerns with enrolment growth – with demand said to be outstripping supply.

Elsewhere, average weekly spend jumped by US$19 to US$849, making the USA the third most expensive destination after the UK and Ireland.

South for South Africa
As hosts of the 2010 Fifa World Cup, South Africa was placed firmly in the spotlight last year. But according to Education South Africa’s Craig Leith, while there was a “small spike” in enrolments during the tournament, the event had little bearing on total student intake for the year. “In fact,” says Leith, “in some markets there was noticeable drop-off in student numbers during this time.”

Indeed, despite being the cheapest destination in dollar terms (average cost of one months tuition, excluding accommodation was US$628, up from US$604 in 2009), the associated travel costs – airfares to the country grew considerably in the run up to and during the Fifa event – proved too great for the price sensitive student.

Bad publicity at the beginning of 2010, and spiralling accommodation costs (average spend per week on accommodation increased by almost US$20 in 2010) were two other reasons why numbers tapered out in the latter half of the year, so say those canvassed in our South Africa Market Report feature (see LTM, March 2011, page 53). Overall, total student weeks depreciated by 17.9 per cent, while total student numbers were more reminiscent of 2006, down 20.4 per cent to 16,570.

“The one positive at the moment,” says Leith, “is that the rand is weakening again against the major currencies (it has been quite strong for the last two years), so we hope this will make South Africa a more affordable destination once again.”

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