(Due to the complexity of the data, this article is also displayed in the digital issue of Study Travel Magazine)
Overall, the value of the language travel industry in the eight major English speaking destinations was estimated at US$11,516,055,060 in 2012, a decrease on last year’s adjusted figure of US$11,934,114,592. Fortunes were evenly split this year with four destinations posting a decrease in revenue gained from the sector, while four destinations posted an increase. The USA was the only large destination to increase student numbers and revenue in 2012, while the other smaller players of South Africa, Ireland and Malta also reported gains last year.
A number of factors affected the global language travel industry in 2012, with the Olympic Games, currency variations, economic declines and visa changes all cited as having an effect on student trends. What is clear, however, is that while destination trends may change, a similar number of students are continuing to study abroad for English language learning purposes as student numbers remained largely the same, with a slight decline between 2011 (1,523,642) and 2012 (1,497,276).
One clear success story in our analysis of 2012 in the language travel industry is Ireland, which saw student numbers, weeks and, therefore, revenue increase massively. Using figures from the national schools’ association MEI, which estimates members to represent 92 per cent of the sector in Ireland, student numbers increased by 16 per cent between 2011 and 2012, while total student weeks increased by a staggering 48 per cent. This incorporates an increase in average length of stay per student from four in 2011 to 5.1 weeks in 2012 a rise of 27.5 per cent in one year. Such large increases in student numbers and weeks in Ireland mean that the country generated an estimated income of 1405,486,506 in local currency from the language travel industry in 2012 an increase of 49 per cent over 2011. In US dollar terms, the Irish EFL industry generated an estimated income of US$513,406,688 in 2012 an increase of 31 per cent compared with 2011 due to currency fluctuations.
David O’Grady, CEO of MEI, puts this increase down to a number of factors although one particular event in 2012 stands out as having the greatest effect on the industry. “The only, unquantifiable, explanation for such an increase in 2012 is ‘an Olympics bounce’,” he says. “MEI schools, for a few years before 2012, had encouraged their agents to divert students who would have gone to London in summer 2012 to Ireland. Our 2013 figures will probably show that that was the case. The Olympics bounce would only have been a factor. Other details would have been the MEI Turkey pilot scheme kicking in a market previously closed to Ireland and a small increase across different markets where MEI had started more focused marketing, eg. China, Saudi, Oman, Russia.”
O’Grady points out that while the figures show the EFL industry in a positive light, the reality is more complicated with language schools in the country facing a number of challenges. “The main issue is that the main markets are in economic turmoil and governments in Spain and Italy have stopped providing scholarships,” he says, although he adds that the country has experienced good results from the MEI scheme to streamline visa applications from Turkey and China and “the Middle East provides the greatest potential for growth”.
Another EFL destination which posted strong results in 2012 is Malta, another smaller player in the global industry. The country makes up just 1.6 per cent of the global industry in terms of revenue gained but according to figures published by the National Statistics Office in Malta student numbers and weeks increased by a significant 18.2 per cent and 24.1 per cent respectively in 2012. This increase comes after several years of falling student numbers in Malta and means that the country earned an estimated 1145,775,840 in local currency in 2012 from the EFL industry, an increase of 45 per cent on 2011. As in other eurozone countries, the US dollar value increase in the sector is less dramatic with the country earning an estimated US$184,596,580 in 2012, an increase of 28 per cent on 2011.
One significant factor affecting the value of Malta’s EFL industry in 2012 was the substantial increase in average course and accommodation costs noted. Our 2012 Malta Status survey, which looked at data given by 16 schools in Malta, revealed that course and accommodation costs increased by 17 per cent between 2011 and 2012 in local currency, although the increase was less significant when converted into US dollars. Possibly high demand and a weak currency against the US dollar has been the cause of this increase in prices.
Malta’s proximity to the UK means that the country may have been fortunate in gaining some market share from the UK in 2012 due to the Olympics, which may account for some of the increase in students choosing to study in the country. Genevieve Abela, CEO of school association Feltom, says, “Last year was considered a record year, especially in terms of student weeks. We are happy to see a consistent increase in the number of adults choosing Malta and an increase in length of stay.”
As the top EFL destination for students worldwide, the UK is in a good position to weather any temporary storms and one-off events that could cause a negative impact on enrolments in the country. And the Olympics, held in London in August 2012 seems to have been one of these events. Using figures collected by English UK from their 474 members, and weighting them to account for the entire market in the UK, we report that actual student numbers were down by six per cent between 2011 and 2012, while student weeks were down by 12 per cent. Susan Young, Communications Consultant at English UK, says that the decrease in numbers in 2012 was the first for seven years. “We believe this was because of the Olympics, which had an effect as far away as Scotland. The state sector suffered less variation than private schools, we think because they teach more English for academic purposes which held up slightly better than general English. Adult students are staying for a shorter time, which partly explains the drop in student weeks.”
Overall, revenue earned in local currency was down by just five per cent to UK£2,359,068,360 in 2012, and the UK had by far the greatest number of students of all the EFL destinations during this year. Young also adds that while the Olympics may have had a temporary dampening effect on the industry in the UK, the overall benefits of hosting such an event would become apparent in the future. “While the Olympics deterred visitors coming to study English during the period that they were on, they’ve had a very positive effect since,” she points out. “The Games showed a different side of the UK: friendly and welcoming with people going out of their way to be helpful, and those images went around the world. There is strong growth in tourism and where general tourism leads, study tourism may follow. People feel the UK is offering better value for money.”
On the other side of the world, Australia was another major EFL destination player to reveal a decline in fortunes in 2012. According to figures from English Australia for the whole market, numbers were down slightly by seven per cent, while student weeks increased slightly by one per cent. These figures mean that Australia suffered an estimated decline in total revenue in local currency of four per cent to AUS$1,444,107,261 in 2012 compared with 2011. In US dollar terms, this decline is slightly greater at nine per cent to US$1,473,578,838 revenue earned during the year 2012.
Sue Blundell, CEO of English Australia says that the fall in 2012 represented the fourth year of decline for the industry. However, she added that the statistics masked some positive signs of recovery in the industry as a whole. “Numbers of student visa holders and students undertaking academic English preparation programmes prior to further study have returned to growth the main decline in 2012 was in short course students, mostly with visitor and other visas,” says Blundell. Looking ahead, she adds that the signs for 2013 were encouraging. “Numbers in 2013 have returned to strong growth, with year-to-date May figures showing growth in English language student visa holders of 13 per cent,” she says.
Looking at the results of last year’s Global Market report on market conditions in 2011, it will come as no surprise that neighbouring New Zealand also suffered a decline in student numbers, weeks and resulting revenue in 2012. In this case, estimated local currency revenue decreased by 10 per cent to NZ$278,497,800, while revenue in US dollars decreased even more significantly by 17 per cent to US$212,142,672.
In 2011, much of New Zealand’s decline was put down to the resulting loss of business following two major earthquakes in Christchurch, but Darren Conway, CEO of English New Zealand, says that there were a number of factors including visa processing changes, currency fluctuations, lack of universal work rights for EFL students and greater regulatory interference from the government which have had a negative impact. “It’s critical that the government’s growth strategy is facilitated by other industry partners such as Immigration New Zealand, as they are a key player in not only managing risk but marketing New Zealand as a welcoming destination for international students. Being overly risk averse and setting policies that are non-competitive eg. lack of work rights for EFL student visa holders further impacts on factors we have no control over such as the strength of the dollar,” he says.
The introduction of a new online visa system and recently announced increased work rights for language students (see news) could see things change for New Zealand over the next few years.
The ELT industry’s smallest destination South Africa is another country that seems intent on growing market share. Statistics from Education South Africa, which is estimated to make up 45-to-50 per cent of the country’s EFL sector, are weighted to represent the whole industry and show that numbers and weeks were both up in 2012. The resulting estimated rise in local currency revenue earned reveals an increase of 33 per cent on 2011’s figures to R621,247,363 in 2012.
Shaun Fitzhenry from Education South Africa puts the increase firmly down to a favourable exchange rate, among other factors. “[The increase] is probably the result of better access to developing markets such as Africa and South America, an apparent resurgence in our more traditional market, Europe, and exchange rates favourable to students and travellers,” he says. However, despite such positive results, he adds that the EFL industry faces continued challenges which continue to hamper growth. “The inability of government to understand the potential of education tourism in general and language travel in particular, its inefficiency in processing visa applications and continued lack of effective leadership in the economy and the resultant inflexibility in dealing with our sector continue to hamper growth,”he says.
Canada is one major EFL destination that felt the most squeeze in 2012, with statistics from Languages Canada representing 199 programmes showing that student numbers and weeks were both down in 2012. When the numbers are weighted to account for the whole market in Canada and combined with a decline in course and accommodation costs recorded in our Status survey of 18 schools this accumulative decline results in a decrease in local currency revenue of 25 per cent between 2011 and 2012 to CAN$1,573,429,750. In US dollar terms, this decline is slightly increased to 27 per cent to US$1,556,214,982 in revenue.
Linda Auzins from Languages Canada puts the decline down to a number of factors including the uncertainty over the Canadian visa situation and a sharp decline in student numbers from Spain due to economic difficulties. She adds, “Saudi Arabian student numbers appear to have reached saturation point in many member programmes, [although on the plus side] efforts to engage the Brazilian market seem to have worked, with a substantial increase in students.”
Looking ahead from 2012, a number of visa changes are due to come into force in 2014, which have caused uncertainty in the market says Auzins, while the strikes affecting visa processing times during 2013 are also likely to have affected the industry negatively this year as many students were not able to gain a visa in time for their summer language programmes (see news).
Finally, the USA has been attracting increasing numbers of students in the last two years and the destination has now overtaken the UK as the top revenue earner for the language travel industry. A lack of data collection in this country makes estimating the size of the market slightly harder than some other destinations as we largely rely on Open Doors figures which are published a year behind other countries. Last year, we underestimated the size of the market and have since had to adjust our figures for this destination for 2011. This year, we estimate that student numbers have grown by 7.5 per cent while student weeks have increased by 15 per cent.
This is an impressive increase in a world market where other large destinations such as Canada and the UK have been experiencing a downturn. Kathryn Kohut, Executive Director of EnglishUSA says that a number of nationalities have been performing particularly well for US language providers in the last few years accounting for the larger than expected increase in numbers for 2011 as well as driving growth in 2012. “Saudi Arabia as well as China continue to drive the growth in student enrolments in language programmes in the USA. For example, Chinese enrolments increased by over 25 per cent and Saudi enrolments increased by over 40 per cent from 2011 to 2012. Enrolments from both of these countries also showed similar growth from 2010 to 2011,” she says.
Kohut adds that the positive situation in the USA is expected to continue. “The outlook for 2013 remains positive as many member programmes continue to see growth in markets such as government sponsored scholarship students from China and Brazil. With the English Language Programs Act in effect, more programmes are securing accreditation and by 2014, all programmes authorised to accept non-immigrant students for English training will be accredited.” firstname.lastname@example.org