A 54 per cent rise in outbound student traffic for language study abroad in seven years (up until 2007) across Eastern Europe and a 33 per cent rise in higher education student traffic in the same period should be arresting information for any education provider keen to tap into lucrative new student markets. Eastern Europe is one such fertile trading ground, according to Student Marketing, a research, marketing and management consultancy company based in Slovakia.
The data above relates to student traffic across the 29 countries that comprise Eastern Europe as defined by Student Marketing, which has spent several years building up a knowledge bank of student trends and buying patterns within the region. Student Marketing’s Chief Executive, Samuel Vetrak, explains that the outbound student travel industry became “mature and competitive enough to need more data and information [for use] in effective marketing in the region”. As he realised this, “We decided to facilitate this need, to ease marketing for educators by providing more market data and local marketing services.”
As well as conducting its own research via contact with agencies directly, Student Marketing also monitors 58 secondary, mostly independent, information sources, such as Unesco, OECD and Department of State statistics. Martin Sulek, Research Department Manager at the company, explains, “Our team speaks local languages, so when needed, we monitor local websites and are often in contact with agencies directly.” Its knowledge extends across agency numbers, business practice and models to student volume and growth potential in various countries in the region.
According to Sulek, Eastern Europe is not only a dynamic emerging market, but one with a great future. “This market is already a significant player in global measures,” he says. “Globally, it represents [approximately] 10 per cent of global market share. In addition, considering both population or student population, it is bigger than Western Europe, so we are talking about significant potential once this region has the buying power comparable to Western Europe.”
Based on data from LTM Status surveys, Student Marketing indicates that in 2007, Eastern European students represented 23.2 per cent of all students in Malta. “Before the UK pound weakened, Malta was signficantly cheaper than the UK, and of course, still is,” says Sulek.
In the UK, a still impressive 14 per cent of students were estimated to hail from Eastern Europe, and 12 per cent in South Africa; indicating that Eastern Europeans actually contribute fairly significantly across the international student population in the country (which is known for a reliance on Western European nationalities such as German and Swiss).
When talking about what Eastern European clients look for in an educational experience abroad, Sulek notes, “Many of them expect a good nationality mix they don’t like to travel around the world and be put together in a class with another 10 fellow countrymen”. And he notes that the main point is that students from this region are “very price sensitive” which may explain the appeal of Malta and South Africa as among those most visited destinations.
The biggest markets in Eastern Europe vary according to sector, and there is a significant market for work & travel programmes, as well as language study and higher education. Overall, Sulek points to Russia, Turkey, Kazakhstan, Poland, the Czech Republic, Slovakia, Hungary, Ukraine, Romania, Bulgaria and Serbia as the largest markets. “Current statistics indicate [these nationalities] are eager to study abroad more than others.”
The region is also a very fragmented market in terms of the number of agencies operating in the region and the number of languages spoken. Student Marketing estimates that there are more than 2,600 agencies in operation within the youth travel sector; across these businesses, 63 per cent promote language travel; 23 per cent promote study travel (higher education); 33 per cent promote work & travel programmes; and 20 per cent offer au pair opportunities (some will be active in more than one sector).
Almost 45 per cent have been around for more than 10 years, but only 7.8 per cent are members of any industry or agency association and most importantly for educators to consider Student Marketing estimates that only 22 per cent of agencies have participated at industry workshops in the last five years. Tapping into this region, therefore, may be more difficult than strategically targeting agencies from this region when at known industry events.
Sulek acknowledges, “The way of obtaining new contacts and partners differs from the usual pattern.” He recommends educators visiting local student fairs in the region (there are 140 such events!) and Student Marketing offers a market intelligence service for agent procurement, as do other companies, which he says are used by some educators to attend local fairs and roadshows on their behalf.
Otherwise, Sulek says that the Internet is the main conduit through which agencies can make contact with educators and vice versa. “The problem is,” he says, “that this way, neither agent nor provider can estimate the quality of the partnership. As we are in a personal service industry, usually personal contact is needed to establish good quality business relationships.”
Educators may need to have many recruitment agent partners in the region. Of the estimated 2,600 student agencies, most are estimated to have a small productivity level on average, 258 students per agency. And in terms of the trend towards using agencies, Sulek believes this remains the prime channel which students use to find out about overseas opportunities.
“The usage of agents here is a common practice and is quite high,” he says. “As clients or their parents are buying services, not goods, they want to see, and feel, a material element in the process of shopping for such an immaterial service. Moreover, clients in Central and Eastern Europe have not got sufficient trust and payment methods to shop online, especially when it comes to buying services.”
As Sulek observes, the usage of agents will depend on a student’s country of origin “the more barriers there are, the more the agent is needed” as well as other factors, such as the ability to apply directly for various products. But, he says, “The percentage [of those using an agency] still remains high, estimated on average at over 70 per cent.” And he concedes that online enquiries from Eastern Europe may well become more common, but he is not sure that online bookings will increase accordingly.
Buying power and average prices across market sectors are areas that Student Marketing has developed data for. Sulek notes that in general, the farther east the country is, the greater the interest in work & travel programmes as opposed to language courses. However, as a guideline for typical language course prices charged which is crucial information for any educator keen to expand its business in the region Student Marketing has surveyed what it considers to be the top 100 agencies in the region and produced average costs based on published website prices (see fig 3).
In summary, there seems to be a lot of potential in the region for educators, although innovative strategies for building business partnerships may need to be considered. Sulek believes that with economies in the area getting stronger, there will be a gradual shift from work & travel programmes towards language courses and/or higher education. “Western universities with a longer tradition and higher reputation will still be more expensive [than studying at home],” he says noting that apart from in Turkey and in some other countries, domestic capacity within higher education is sufficient. “But,” he continues, “the price gap will narrow. [Overseas] universities will also be forced to recruit outside their countries, due to a decrease in the young population. All these factors will cause the outbound rate in Eastern European countries to grow.”
He sums up, “Depending on the country, there are none or small, or fewer and fewer administrative and economic barriers that would be in the way of students consuming the products of our industry.”