November 2010 issue

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The Global Market

2009 was a difficult year for language schools in many of the EFL destinations analysed in this year’s analysis of the global market and our results show a decline in student numbers and global revenue for the sector. Yet not all destinations were feeling the pinch, with the USA and Canada in particular showing strong growth in a difficult year. Bethan Norris reports.

The operating environment for language schools located in English language destinations changed greatly in 2009 and the results of this year’s analysis of global market statistics for the English language teaching industry point to challenging conditions for many. Total student numbers learning English in all of the eight major English language destinations shrank by 1.3 per cent in 2009 to 1,484,209, when compared with our results in 2008 (see LTM, November 2009, pages 40-44), although total student weeks increased slightly by 4.8 per cent to 12,746,139.

Overall, analysis of statistics for 2009 paints a very different picture from that depicted in our previous Global Market Report for 2008 when most markets posted a growth in student numbers, weeks and revenue earned from the ELT sector. This year student numbers were down in six English language destinations, while student weeks were down in four destinations. This decline, which was compiled from the best available data in each country combined with reports presented to the annual Global Alliance of Education and Language Associations (Gaela) meeting by language school association heads, resulted in the total value of the ELT market declining by -8.5 per cent to US$11,735,773,390.

This decline in revenue from the English language teaching sector reflects declining student weeks and numbers in many destinations but further analysis reveals a drop in the cost of courses and accommodation in many destinations. All eight of the destinations analysed in this report noted a decrease in the average spend per week of students on course fees, accommodation charges and living costs, suggesting that the industry is becoming more price sensitive in line with a declining global economy. The change in expenditure is also a reflection of changes in individual currencies, all of which were converted into US$ using an exchange rate from June 2009.

While we try to keep all our statistical sources constant year on year in order to produce comparable data, we have once again used different statistics for the EFL market in Ireland due to a reduced response rate by schools in the annual survey produced by the tourism board, Failte Ireland. This year, therefore we have used statistics produced by language school association MEI. All other destinations were analysed using sources and extrapolation methods used in previous years.

Strong growth
The one world region that appears to be bucking the downward trend in the ELT industry is North America. The USA saw overall student weeks increase by 15 per cent and student numbers increase by 13 per cent – the only country apart from New Zealand to experience increases in both student numbers and weeks in 2009. Canada too, although suffering a decline in student numbers of 5.8 per cent, recorded that student weeks had grown by 11 per cent in 2009 and this impressive growth in weeks by both North American countries accounts for the overall growth in the global market as a whole, counteracting the decline shown by other destinations.

North America has largely been left unscathed by barriers to student travel, such as changes in visa policies experienced by Australia and the UK, and the USA and Canada may well have benefitted from falling student numbers to these two countries. China is a market that has grown strongly in the USA over the last few years and the long average length of stay of 12.8 weeks (the longest recorded for all our destinations) shows that students may be coming to the country for serious academic purposes and are less likely to be put off by the global economic decline.

Canada’s average length of stay increased from 10.4 weeks in 2008 to 12.3 weeks in 2009 and this increase means that the overall market for this country has grown despite a decrease in student numbers between 2008 and 2009. Linda Auzins from Languages Canada points out that while individual student numbers have dropped at member schools in 2009, enrolments from China and Saudi Arabia – due to the Saudi scholarship programme – have increased among their university and college members. As college and university programmes are more likely to be longer in length this has contributed to the increase in average length of stay. She adds that declining numbers at Canadian schools were largely due to “the global economic crisis, H1N1 and recent visa requirements for Mexican and Czech students”.

New Zealand is another destination that achieved modest growth in 2009 (student weeks by 1.7 per cent and student numbers by 13 per cent) in the current economic climate this growth is perhaps more impressive. The country has gained market share from its nearest rival Australia in light of declining numbers in this country and experienced strong growth from the Vietnamese student market as well as marginal growth from the Saudi Arabian and Thai markets in 2009.

Order of play
While certain destinations were doing better than others in 2009, the major players of the English language teaching world remained largely unchanged. The UK retained the largest market share in terms of numbers, student weeks and revenue (with market share of revenue increasing in 2009 to 37.1 per cent from 34.7 per cent in 2008), although in some areas the gap between the UK and USA closed in 2009. The USA’s greater average length of stay compared with the UK’s meant that the proportion of student weeks made up by students studying in the UK and USA was much closer than student numbers and revenue earned at 28.8 per cent and 26.5 per cent respectively. Last year the UK’s market share of student weeks was 29.7 per cent and the USA’s was 24.2 per cent.

Overall however, the order of players remained largely unchanged from 2008 with South Africa and Malta being the smallest players in the ELT industry in terms of student weeks and revenue earned. When it came to student numbers Malta attracted 5.2 per cent of the market share – above New Zealand and South Africa – although the low average length of stay for this destination meant that its market share was less for student weeks and revenue earned.

Reasons for decline
Australia saw the greatest decline in its market share in terms of student weeks in 2009 (from 16.6 in 2008 to 15.4 per cent in 2009) and Sue Blundell from English Australia puts this down to a number of factors including “the high Australian dollar, increased competitor activities and an increased rigour in the processing of visas”. This decline follows huge growth of 21.2 per cent in student weeks in our 2008 report, as well as strong growth in the previous few years. Blundell believes that the current downturn, which is continuing in 2010 (see page 6), may be a levelling off of student numbers to more sustainable levels.

Most destinations cite the global economic downturn as having a negative affect on business in 2009 as student markets feel the pinch and students change their study plans to either cheaper destinations or to local establishments in their home countries. Alex Fenech, President of Feltom, said that of the top 10 nationalities for Malta, all but Spain declined in 2009. “There is little doubt that negative currency fluctuations and the global economic situation had a negative impact in the industry in 2009. As the euro has weakened and signs of economic recovery begin to appear, so too the industry has begun to bounce back in 2010,” he adds.

In some countries, however, economic woes have been coupled with unhelpful visa changes that have caused confusion and problems among schools, agents and students alike. In March 2009, the UK government unrolled the Tier 4 student visa system, which has continued to cause controversy over the last 18 months. Student numbers in the UK were down only slightly in 2009 and countered by an increase in student weeks, which meant that revenue levels were down by only 2.2 per cent from 2008. Annie Wright from English UK said that there was an “alarming dip” in visa applications in April and May 2009 but that numbers recovered later in the year. “The biggest problems we faced with the implementation of T4 concerned confusion over the phrasing of the new CAS letters issued by institutions,” she said.

The suspension of visa applications from certain areas of China and Nepal in the later stages of 2009, coupled with a change in the English language level requirements for student visa applicants in March 2010, means that the UK’s 2010 statistics for language travel students will make interesting reading.

Increasing price sensitivity
The market share in student weeks for Malta and South Africa both declined in 2009 compared with 2008, down 0.3 per cent and 0.1 per cent respectively, with the average tuition costs for a four-week course in South Africa decreasing quite significantly (from US$934 in 2008 to just US$604 in 2009) compared with other destinations. This country it seems is feeling the greatest effects of the global economic downturn as it has had to cut costs to remain attractive to students. Increasing competition from new schools in South Africa could also be a factor in declining course costs in this market, although Craig Leith from Education South Africa points to the negative portrayal of the country in foreign press as having the greatest affect on international student numbers in the country. In Ireland too, cost cutting among language schools has proven to be a real problem for profit margins. Ireland’s revenue from the ELT market decreased by 16 per cent in 2009 from 2008 to US$794,219,549, as average spend per week decreased from US$1,292 to US$1,183. David O’Grady from MEI says, “2009 was an extremely difficult trading year for schools in Ireland. Because of competitive pressures the student price per week was lower than in 2008, so overall income was greatly down.”

Looking forward to 2010
In some destinations, such as Australia and the UK, predictions for 2010 are already pretty clear with anecdotal and early statistical evidence pointing to a further decline in student numbers and resulting revenue. As the global EFL learning population has decreased only slightly by 3.5 per cent between 2008 and 2009, it is likely that similar numbers of students will continue to study English overseas in the future, only where they go and how long they stay for might well change.

The rise of EFL destinations in Asia – such as Malaysia and Singapore – could have a significant affect on the global EFL market in the future as Asian students chose to study at a destination closer to home, especially when economic conditions encourage students and their families to look for cheaper options.

The US and Canadian English language teaching markets, in contrast, are facing 2010 from a strong position and it looks likely that they will experience further growth. Canada in particular has been benefitting from immigration changes in Australia, which have delinked student visas from permanent migration, as students are increasingly looking to this country to satisfy demand for immigration opportunities.

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International Students House  

British Council  
English Australia  
Groupement FLE  
International House World Organisation  
IALC International  
Languages Canada / Langues Canada  
MEI Ireland  
Neas Australia  
Quality English  

Globus Education Agency  
IEFT- International Education Fairs of Turkey  

Cambridge Esol  

Dr. Walter GmbH  
Student Guard Insurance  

LTM Digital  
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Cyprus Tourist Office  
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Twin Group  

Academies Australasia  
Bond University  
Browns English Language School  
Carrick Institute of Education  
La Trobe University  
Language Studies International  
Neas Australia  
Pacific Gateway International College  
Shafston International College  
Universal English College (Global Village Sydney)  
University of Tasmania  
University of Western Australia  
University of Western Sydney College  

Ecela - Latin Immersion  

Ceran Lingua International  

Berlitz Canada   
Bow Valley College  
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Camosun College  
Capilano University  
College Platon  
East Coast School of Languages  
English Bay College  
English School of Canada  
Eurocentres Canada  
Geos North America  
Global Village  
Guard.me Insurance  
International Language School of the YMCAs Quebec  
LSC Language Studies Canada  
National School of Languages  
Niagara College  
Ottawa International Student Programmes (OISP)  
Queen's University  
Saint Mary's University  
School District No. 42 Maple Ridge & Pitt Meadows  
Stewart College of Languages  
St Giles Colleges  
Study Abroad Canada  
Thompson Rivers University  
Vancouver English Centre  
VanWest College  

Cyprus Tourist Office  
Language Conquests  
The Language Explorer  
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Tandem Santiago  

Mandarin House  

Intensa Spanish Language School  

Study Team Cuba  

IH Cairo  

Active Learning  
British Study Centres  
Bury Language School  
Cambridge Education Group  
English Language Centre Brighton & Hove  
English Studio  
Excel English Language School  
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Hove College  
International House London  
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Language in Group  
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Quality English  
Queen Ethelburga's College  
Sedbergh School  
Spinnaker College  
St Clare's Oxford  
St Giles Colleges  
Study Group  
TUI Language   
Twin Group  
University of Essex - International Academy  
Wimbledon School of English  

Accent Francais  
Alpha B - Institut Linguistique  
College International de Cannes  
Ecole PERL  
Ecole Suisse Internationale  
Education En France  
Institut de Langue et de Culture Franšaises - ILCF  
Langue Onze Toulouse  
Le Franc Parler   
LSF Montpellier  
Lyon Bleu International  
Media Langues Caraibes   
Paris Langues / Club CEI des 4 Vents  

GLS Sprachenzentrum  
International House Berlin - Prolog  
F & U Academy of Languages   

Media Langues Caraibes  

Academia de Espanol Probigua  

Cork English College /Language & Activity Holidays  
Dublin International Foundation College  
Galway Cultural Institute  
Horner School of English  

Alpha School of English  
Clubclass Residential Language School  
EC English Language Centre  
English Language Academy  
Feltom (Via Malta Tourism Authority)  

Habla Ya Language Center  

Derzhavin Institute  

EAC Language Centres and Activity Camps  
University of Stirling  

CLIC-IH Seville   
Malaca Instituto - Club Hispanico SL  
Malaga Si  
Inturjoven Spanish Courses  
Pamplona Learning Spanish Institute   

EF Language Colleges Ltd  
ESL Ecole Suisses de Langues  
Eurocentres International  

Hargrave Military Academy  
Julian Krinsky Camps & Programs  
Language Consultants International  
University of California Riverside  
University of San Diego  
Zoni Language Centers