November 2013 issue

News Round Up
Inside the industry
Agency Survey
Secondary Focus 1
Secondary Focus 2
Tertiary Focus 1
Tertiary Focus 2
Vocational Focus

Special Report
Course Guide
Regional Focus
Market Analysis

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New Zealand challenges

New Zealand’s ELT sector continues to jostle for market share in 2013, with the high value of the currency, among other issues, posing a challenge. Some providers are confident that the likely rollout of improved nationwide work rights for ELT students, as well as improved course offerings, will have a positive impact on enrolments in 2014, as Claire Twyman reports.

New Zealand language schools’ marketing budget by region (overall %) Top nationalities in New Zealand by student weeks 2012 - according to schools

Asia 50%  
W Europe 13%  
Latin America 12%   
C&E Europe 9%  
Middle East 8%
Australasia 6%
North America 2%

1. Japanese 16.2%
2. Chinese 13.8%
3. Saudi 11.8%
4. Korean 11.6%
5. Brazilian 8.1%
6. French 5.6%
7. Taiwanese 4.1%
8. Swiss 3.9%
9. German 3.8%
10. Thai 2.9%

Commission Student numbers by age range
Average commission paid on a language course:  21%

One of the institutions profiled paid 10% on accommodation

8-11 1%
12-15 4%
16-18 11%
19-24 47%
25-30 22%
31-50 13%
50+ 2%

Means of recruiting students in New Zealand, 2012 Reasons for learning English

Agents 76 %
Internet 10%
Local bookings 8%
Other means 6%

Further studies in another French speaking country 4%
University/college studies at home 25%
Current or future work 37%
For pleasure only 16%

Student's region of origin How did students find out about their school

Asia 61.5%
Western Europe 11%
Latin America 10%
Middle East 9%
Central and Eastern Europe 5%
Australasia 2%
No answer 1.5%

Agent 52%
Friend/relative 28.5%
Internet 17%
Advertised 2%
No reply: 0.5%

Total marketing spend by sector and by category in %
Agency costs: 44%

Commission 36%
Incentives 4%
Agency brochures 4%

Travel costs: 37%
Agent workshops 9%
Student exhibitions 3%
Agency visits to school  2%
Entertainment 2%
Trips to agencies 21%
Publicity costs: 19% 

Agent mags 1% 
Student mags etc 2%
Brochure, video etc 10.5%  
Internet 5.5%

Ask the students – view from the classroom

195 students from 27 different countries took part in our survey of language school students in New Zealand

The average age was 23 years
The average class size was 12 students
61.5 per cent of respondents were from Asia
11 per cent of respondents were from Western Europe
61 per cent of respondents booked their course through an agency
52 per cent of respondents found their school through an agent
91 per cent of respondents would recommend their school
52 per cent of respondents were staying in homestay accommodation
47 per cent of respondents were learning English for current or future work purposes
51.5 per cent of respondents found it quite hard or very hard to practise their English with local people
21.5 per cent of students had been on a previous study abroad trip
66 per cent of respondents thought that there was just the right number of students and mix of nationalities in the classroom

Number of participating organisations: 19
Total number of students at the organisations in 2012: 13,898
Total number of student weeks in 2012, estimated: 136,200
Participating schools: ABC College of English; AIS St Helens; Auckland English Academy; CCEL; Christchurch Polytechnic Institute of Technology; Dynaspeak; EF International Language School; Kaplan International Colleges; Language Schools New Zealand; Languages International; Language Studies International; New Horizon College of English; New Zealand Language Centres; Rotorua English Language Academy; The Campbell Institute; University of Otago Language Centre; Unique New Zealand; Waikato Institute of Technology; Worldwide School of English.

9.8 weeks Overall average length of stay
23.25 hours Average language tuition per week

NZ$1,381 (US$1,113) Average cost of a one-month course, excluding accommodation
NZ$227 (US$183) Average cost of residential accommodation per week
NZ$233 (US$188) Average cost of host family accommodation per week

The downward trend of New Zealand’s ELT sector in 2012 has spiralled into 2013, with visa limitations and the high value of the dollar still posing a threat to enrolment numbers. “The Ministry of Education levy statistics say that [from January to April this year], total weeks for all specialist private language schools were down 19 per cent on the same period last year, while tuition [income] was down by nine per cent,” notes Darren Conway, Chief Executive of English New Zealand (ENZ), although he suspects the drop in tuition fees is likely to be greater than the drop in student weeks due to pressure to discount in a declining market. “My gut feeling is that enrolments were down between 10-to-15 per cent over last year,” he adds.

Lower currency values in the UK and USA have given ELT destinations an advantage over New Zealand, stealing 20 per cent market share from the country and possibly more, he continues. Plus, he adds, Immigration New Zealand’s (INZ) move to handle visa processing offshore, with visa services in the Americas and Europe discontinued last year, has also done the sector no favours (see STM, December 2012, p9).

Not all areas of the country, however, have witnessed a downturn. Providers in Christchurch have seen ELT enrolments double in recent months, according to Conway – a clear indication that the city’s ELT sector is starting to recover after the 2011 earthquake. “Parents have now regained their trust in Christchurch, and our enrolments are recovering very well across all countries,” explains Judy Clark from CCEL College of English, which has campuses in Auckland and Christchurch. “Although remaining concerns from parents kept enrolments down from some key countries, such as Thailand,” she says.

According to Conway, Christchurch’s growth can in part be attributed to the introduction of increased work rights for ELT students in the city (see STM, October 2012, p8). In August last year, a new rule was introduced on an 18-month trial basis allowing students on a course lasting 14 weeks or more (instead of the previous six month rule) to earn while they learn. “This has led to increased enrolments for our Christchurch school from countries such as Colombia and Brazil,” Clark reveals, with Conway adding that the scheme will potentially be rolled out across the country mid-2014. “It is not clear how much of an impact this will have on our sector in the not so distant future, but we anticipate that this could lead to ELT bookings rising by around five-to-10 per cent.”

In a move to strengthen pathway options, CCEL has partnered with Christchurch providers such as Navitas International College (UC International College) to grow ELT enrolment numbers. Indeed, with Blaise Barham from Southern Lakes English College (SLEC) in Queenstown revealing that he anticipates a rise in student numbers over the next 12 months due to strong pathway agreements with tertiary colleges, it seems that a number of New Zealand providers have the same idea. However, Terry Leotta from AIS St Helen’s highlights that under New Zealand Qualifications Authority (NZQA) rules, many pathway providers have been stripped of the right to enrol students through internal English language tests, which could cause declining enrolments and ultimately impact the ELT sector.

Despite this, Clark is confident that bookings will rise in coming months. “A combination of new courses and new partnerships supported by high-quality agents gives us plenty of confidence about the future,” she says. On the other hand, Kim Lawry from Coromandel Outdoor Language Centre in Whitianga – a school offering a range of English plus courses – is less optimistic. He, along with other providers, is of the view that New Zealand’s distance from key source markets, combined with other factors such as the goods and services tax charged on education, make New Zealand an uncompetitive ELT destination. “We are looking hard at what we can do to counter these issues, but most of these things are outside our control,” he laments. “Our activity programmes are fairly unique, and my fear is that schools that are a bit different will disappear because of low profitability.”

Other schools, meanwhile, see specialised offerings as advantageous, and hope that they will draw in more students in the future. “These are challenging times in our industry in New Zealand, so at Rotorua English Language Academy (RELA) we are focussing on the special features of the school,” affirms Chris Leckie. “We have worked hard on developing our English through the Ages course and Family English, which are particularly suitable for Japanese- and French-speaking markets. We are also taking advantage of our beautiful environment – this year we have built a new vegetable garden… so that we can develop our cooking and gardening programmes.”

Market wise, Barham reveals that at SLEC, “We had a really broad range of nationalities in 2012 which is continuing into 2013. We saw a decline in Saudi students as many now go to the USA, but a rise in Japanese bookings.” In a similar vein, Martin Wall from Dominion English Schools in Auckland explains that, “Saudi Arabia is affected by… the good value of the USA in particular.” Koreans at the school have also performed poorly, in terms of enrolment numbers, contributing to an overall decline compared with 2012. “We have had the same number of students booking courses, but for a shorter length of time,” Wall adds. “Korean students are looking for really low-cost options, and increases have been clear in Russia, Taiwan and Brazil.” And over the next 12 months, he anticipates “a slow but steady increase in numbers, though that is mostly dependent on the US and eurozone economies as well as improved visa conditions and processes.

“INZ is also working towards online processing which may improve ease of access,” Wall continues, “and closer alignment between tourism and education may also improve both the perception of New Zealand as a language travel destination and the awareness of English language study opportunities.” Other initiatives aiming to bolster the number of overseas students in the country include the government’s NZ$40m (US$32.2m) investment in the promotion of the country’s education export sector over the next four years, which Leotta says “runs head-on with poorly implemented attempts to clean up the sector. For the future we hope that the commendable efforts by Education New Zealand to raise the country’s profile in language markets will be better matched to policy settings and implementation by our gatekeeper bodies.”

Barham, meanwhile, praises English New Zealand for its government lobbying, with the association recently asking NZQA to integrate the Code of Practice responsibilities in the system. Commenting that NZQA ELT requirements for international students continues to be a resource-hungry challenge (see STM, September 2013, p21), Conway says that government plans to invest in the education export sector are welcomed. “The government has set very high growth rates which will be hard to meet, with the dollar continuing to trade so highly against other currencies. English New Zealand will need to manage this investment wisely,” he asserts. claire@hothousemedia.com

Comparing the 2012 statistics with 2011

Between 2011 and 2012, the average school marketing budget as a percentage of gross income has dropped from 17 per cent to 12 per cent – possibly signalling the growing effects of adverse conditions developing in the market. However, it should be noted that 19 New Zealand schools contributed to the 2012 status survey compared to 2011’s seven participants, which could account for disparity between results.

Despite a difference in the number of participants, average student costs did not change very much between 2011 and 2012, with a one-month course costing US$1,113 on average in 2012 (US$1,121 in 2011); residential accommodation setting students back US$183 per month in 2012 (US$179 in 2011) and host family accommodation costing per month US$188 this time (US$181 in 2011). Meanwhile, the average length of stay rose by one week to 9.8 weeks in 2012. Reports from schools on market conditions in 2013 suggest that students are now booking courses of a shorter duration, so perhaps the average length of stay will fall in our next survey.

Nationality wise, Saudi students were in third place in the top 10 nationality list in 2012, falling one place and 6.2 percentage points since 2011. Brazil upped its market share by 3.1 per cent between the two years, and Korean enrolments were also down marginally (by 0.4 per cent). Contributors to this article noted similiar changes in enrolment trends, in terms of nationalities, over 2013. Additionally, while Japan was in the top spot in both years, it lost 3.2 percentage points in 2012, while Chinese students climbed from fifth to second place and gained 5.8 percentage points.

In both years school agent usage was also high, with providers finding 75.7 per cent of students through this means in 2012 and 79 per cent in 2011. Agency costs were a slightly higher share in 2011, with schools allocating 44 per cent of their marketing budget on agency commission compared with 36 per cent last time round. The average commission rate for agents was down in 2012, although only by one percentage point, and in the same year providers allocated an extra four per cent of the budget for publicity costs.

Thank you to the following schools who participated in our student survey: Christchurch Polytechnic Institute of Technology; Coromandel Outdoor Language Centre; Dominion English School Auckland; DynaSpeak; Imperial College of New Zealand; Kaplan International College Auckland; Language Studies International Auckland; Rotorua English Language Academy; Southern Lakes English College; Waiariki Institute of Technology; Worldwide School of English.
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Spanish Tourist Office  

Ability English  
Academia International Collegs  
Access Macquarie   
Australian Institute of Professional Education  
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English Australia  
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Impact English College  
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CERAN Lingua International  

Dialogo Language School  
FAAP - Fundação Armando Álvares Penteado  
IH Sao Paulo  
The Language Club (TLC)  
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Algoma University  
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Camosun College  
Centennial College of Appplied Arts and Technology  
College of New Caledonia  
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Georgian College  
Global Village  
Humber Institute of Technology and Advanced  
Languages Canada  
London Language Institute  
Niagara College  
North Island College  
Pickering College  

World Education  

English 100  
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GSM (Greenwich School of Management)  
Heart of England Language School  
International House Bristol  
INTO University Partnerships  
Kaplan International Colleges  
Kings Colleges  
King's School Ely  
LAL Language Centres Holding Ltd  
Language in Group  
The Language Gallery  
Norwich Institute for Language Education (NILE)  
Queen Ethelburga's College  
St Giles International  
Target English International  
Worthing College  

Goethe Institut Berlin  

English For Asia  

Dr. Walter GmbH  

Celtic School of English  
Clare Language Centre  
Dublin Cultural Institute  
University College Cork Language Centre  

Italian in Tuscany  

Kai Japanese Language School  

Feltom (Via Malta Tourism Authority)  

Auckland English Academy  
Campbell Institute, The  
English New Zealand  
Southern Lakes English College  
University of Otago Language Centre  

CIAL - Centro de Linguas  

EF International Language Centers  
Eurocentres International  

Malta Tourism Authority  
Spanish Tourist Office  

ELS Language Centers  
Forest Ridge School of the Sacred Heart  
Global Language Institute  
Zoni Language Centers  

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