Financial crisis fallout on study abroad
Short-haul and alternative study destinations may benefit from the current global financial crisis, according to agencies around the world, who report that some of their clients may reconsider their study destination based on affordability, or sit out the current global financial crisis and postpone their study abroad plans, while others are more upbeat about possible outcomes.
“It is absolutely obvious that people become less confident in [this] economic situation, and the world news adds even more uncertainty... which may result in the decision to wait or postpone plans to study abroad,” said Svetlana Busigina of Britannix agency in Russia. She added that she expected more of her education partners to start offering discounts on prices, “and we hope it will help to attract students”.
Busigina pointed to the Czech Republic as a likely alternative study destination for Russians, due to its proximity to Russia, and explained that the decision by the airline BMI to cancel its flights from Ekaterinburg to London had further exacerbated problems. “Now students have to choose other airlines via Moscow, Budapest or Helsinki, which are less convenient and more expensive.”
In Indonesia, Gunawati Tiotama of Global Total said his clients might be more tempted to choose to study in Singapore and Malaysia. And he acknowledged that many parents would be re-evaluating their investment in their children’s education. “For those parents who realise the importance of education, they will still send their children to study abroad,” he added.
In India, where the rupee fell to a record low against the dollar in October, an online news source reported that many students hoping to fund their own studies abroad using bank loans may now wait before embarking on their plans. “This is a lean time,” said Soni Khanna, PR Manager of The Chopras agency. “Most of the children who apply these days are from middle class families who’ve got good grades and hope to get loans from banks. But now, with interest rates being what they are, it has become more difficult.”
Renato Silveira of 2001 Travel in Brazil also said his clients were waiting to see what would happen before organising courses, while Mihal Timofte of IEC agency in Romania noted that although there may be a decline in demand for some programmes among his clientele, others such as university placement or work and study programmes might actually increase in the current climate.
“We are in the euro zone, the currency least hit so far, so our destinations’ costs can stay flat or may become less expensive,” he said.
Three new members for Ialc
The International Association of Language Centres (Ialc) has three new members, although it has lost two (Latin Immersion in South America and International Study Centre in Ireland).
The new recruits are ILI in Northampton, MA in the USA; Linguatime in Sliema, Malta and Accent International in East Budleigh, UK. At Linguatime, Director, Albert Muscat, said he was thrilled to be joining the quality club. “Getting accredited is all about trust,” he said. “Trust is a very important commodity and one that is very difficult to value.” He added that the accreditation process had also given him better guidelines by which to run his business.
Japan wants to woo international students
Much like the Prime Minister’s Initiative in the UK, Japan has announced a target it wants to reach in terms of international student recruitment. By 2020, it hopes to attract 300,000 international students to study in Japan, up from the 119,000 currently studying in the country.
To achieve this aim, 30 universities will be selected as hubs for the programme, where students can earn degrees by studying only in English. Accommodation will be offered by universities for those in the country for less than a year, September admissions dates will be reviewed and implemented and visa procedures will be overhauled, with work rights for graduating students likely.
“We aim to accept 300,000 students from abroad by around 2020 to make Japan a nation more open to the world, and to develop a global strategy to expand the flow of people, materials, money and information between Japan (and Asia) and the world,” said a statement released by six relevant ministries, earlier in 2008.
As part of this internationalisation plan, unveiled by Prime Minister Yasuo Fukuda, some focus will also be given to Japanese studying abroad. However, according to Ryuki Hayashi of Jaos, efforts made by the agency association to secure government funding to back this pledge have not been met with success to date.
Plimsoll Report assesses UK big guns
A financial analysis of company accounts filed by 179 UK language school companies reveals an interesting insight into commercial strength and market share within the British market. The report suggests total market size is declining, while some operators are taking over the market share of others and posting good growth figures.
Although the Plimsoll Portfolio Analysis does not include all companies within the sector because many are reported to have filed small or modified accounts, and therefore are not included in rankings the results are an indication of scale and performance and provide an update to the McCallen reports that gauge the top 10 players by turnover and profit.
An average sales growth recorded across the board was 10 per cent although the report points out that almost one in three companies recorded a fall in sales, at an average of 28 per cent. Of the two-thirds that posted growth, the average growth was 16 per cent. Total market size was estimated to have decreased by 12.9 per cent, based on the sample of 179.
Meanwhile, the top 10 companies by market share are listed as: BPP Holdings; Nord Anglia Education PLC; OISE Ltd; Embassy Educational Services; EF Language Schools; Bell Educational Trust; The Language School Co Ltd (formerly trading as Harven School of English and now owned by OISE); Japan Centre Group; St Giles Schools of Languages and Aspect International Language Academies.
Excluding the first two operators, which have a wider remit than only language training, the next three biggest players in terms of sales are OISE (UK£32.8 million); Embassy Educational Services (UK£25.7 million) and EF Language Schools (UK£17.6 million).
Assessing companies by pre-tax profit, the report notes that only a handful of companies have been able to improve their pre-tax profit margin in the last 10 years. “Most have suffered at least one year of loss making or a few years of declining profits,” it states, detailing that the average pre-tax profit margin in this industry is 4.4 per cent.
One quarter of the companies assessed in the latest Plimsoll analysis were reported to have recorded a pre-tax loss in their latest accounts. Disregarding this quartile, the industry average pre-tax profit moves to 6.1 per cent.
Russia - China language link up
Russia and China plan to open language centres in each other’s countries promoting their national languages, following an intergovernmental mission held between the two countries in October.
Russia’s Deputy Prime Minister, Alexander Zhukov, said that Russia “backs the opening of Confucius centres in Russia”, which promote the Mandarin language and Chinese culture, but according to a Russian news source, there is some stalling over whether staff of the equivalent Russian language centres in China would be afforded diplomatic status.
Nevertheless, Zhukov said the Russian government’s plans provide for the establishment of such language centres in China.
Two brands expand
Bell and International House (IH) both have new language teaching centres. International House Cape Town is opening in South Africa in January, headed up by Gavin Eyre, who previously worked for LAL Cape Town.
And in September, IH Toronto moved into Calgary, with the purchase of Focus International Language Training Centre. Now operating as IH Calgary, previous school owner Lona Morishita has stayed on as Director, along with many staff.
Meanwhile, the Bell Educational Trust has expanded its operation into Romania, opening a new Bell Centre in Bucharest. Bell is partnering with Euro Training to run language courses, particularly corporate training, in the city.
Jo Taskin, Partnership Scheme Manager for Bell, said, “There is great potential to develop English language training for the corporate sector, especially for new members of the European community. This is a great opportunity for us.”
Alphe Russia grows in size
The latest Alphe conference in St Petersburg, Russia, was the biggest yet, with 120 agents and 65 educators doing business in the cold but productive Russian climate.
Alphe Manager, Jane Gilham, said that a greater diversity of agent nationalities attended this year, and the feedback from delegates was outstanding. One such satisfied delegate was Mujen Gurkan, from Poseidon Work and Study in Turkey. “We were able to meet everyone we wanted to as it was not too large,” she said. “We found the 30-minute appointments to be perfect and the hotel was fantastic!”
Natalia Kudryavtseva, from Study Flight Education in Russia, commended the conducive business environment. “The workshop is absolutely different,” she said. “It’s not a leisure time for agents and educators, but people feel more relaxed.” And Elisabetta di Gion, from the European School of Economics in Italy, said simply, “This is the best fair for agent quality.”
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