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September 2012 issue

Contents
News
News Round Up
Inside the industry
Agent Survey
Secondary Focus 1
Secondary Focus 2
Tertiary Focus 1
Tertiary Focus 2
Vocational Focus
Direction I
Direction II
Special Report
Course Guide
Spotlight
Destination
Regional Focus
Market Analysis
Grapevine

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Industry powerhouses

While the language training industry still has plenty of independently owned language centres, there are some notable giants in the market that have grown through external investment, expansion and acquisition. Gillian Evans looks at the recent developments of the big players and how this is shaping the language training market.


The language training industry has gone from a casual homegrown collection of small schools in well-known tourist destinations to a multibillion-dollar global industry supported by governments and increasingly attracting the attentions of investors. Today there are several companies that have a web of schools spanning the globe, enrolling thousands of students each year. Some of these were the brainchild of industry trailblazers, such as Swiss Erhard Waespi. His vision was to bridge the cultural and linguistic divide by setting up an English language school in the UK, which he did in 1946 and which was to become the first of many Eurocentres schools.

Another major player, EF, began from the vision of a Swedish student, Bertil Hult, in 1965. He set up his first “school” in the basement of his university dormitory in Sweden. But Hult, who himself has dyslexia, wanted to take learning out of the classroom, and decided to take a group of Swedish high school students to the UK to learn English.

In the USA, Kaplan was founded in 1938 by an American school teacher Stanley H Kaplan, who started his tutoring business in his parents’ home in Brooklyn. The business grew and by the time it was bought by The Washington Post Company in 1984, Kaplan had more than 100 centres throughout the USA.

Antonio Anadón of IEG is also something of a modern-day visionary of the language travel industry, setting up his company at the tender age of 17. Now, as a result of some major acquisitions, IEG incorporates Enforex, Don Quijote and the Solexico chain of schools in Mexico, and claims to be the “largest and most prestigious group specialising in the teaching of Spanish for foreigners as well as one of the five world leaders specialising in student exchanges”.

Big money
Although many language school chains started off as small business ideas by individuals, a significant few remain privately owned by their founders. One such organisation is IEG, which remains in the hands of Anadón as sole owner. Similarly, St Giles, which was set up in the UK in 1955 by Paul and Diana Lindsay, is still run by the family, with their son Mark Lindsay heading up operations as the group’s CEO and granddaughter Hannah Lindsay as Sales Manager. “We are one of the only English language school groups that has reached the third generation still being wholly owned by the original founding family,” states Hannah Lindsay. “My family are proud that St Giles has continued to be a powerful player without having bought into the ‘acquisitions and mergers’ model which so many of our competitors have done. For us, this has allowed us to develop in a way that we are completely happy with and to retain our autonomy.”

Another founder-owned chain of schools is Sprachcaffe Languages Plus, a German/Italian rooted business founded by Alberto and Marcello Sarno in 1983. Marketing Manager, Mária Husárová, says, “Next year the company celebrates its 30th anniversary. While the headquarters is still in Frankfurt, Sprachcaffe Languages Plus denotes a long history of world-wide expansion.”

Other organisations have willingly embraced the advances of investors. Eurocentres is backed by Swiss retail giant, Migros, Kaplan is owned by the Washington Post, Berlitz by the Benesse Corporation and Providence Equity Partners owns Study Group International (SGI). The effect of these big names can mean big money. SGI, for example, which was founded in 1994, was sold to the Daily Mail Group in 1999 for an estimated UK£44 million (US$68 million). Then in 2006 the group was sold to an Australian private equity company, Champ, for AUS$176.4 million (US$179.4 million), and four years later to Providence Equity Partners for US$570 million.

For SGI, these changes in ownership signalled the start of a rapid expansion strategy, and today the group operates 38 permanent centres in Australia, New Zealand, China, the USA, Canada, the UK and Europe. In addition, it has 33 summer centres across England, the USA, Canada and Australia, and has invested in schools in China and Vietnam.

Hungry for acquisition
Acquisitions and mergers have featured heavily in the language teaching market of the 21st century, and this hunger for new centres has not abated over past years. OISE, for example, has snapped up four language centres in Canada and a school in the UK since 2006, and developed a residential centre for executives in the UK, as well as opening schools in France, Germany and Spain.

In Malta, EC, whose origins date from 1967, embarked upon a rapid expansion trail from 2002, opening a new centre in the UK, and then launching a new school every year from 2004 to 2010. In 2010, EC bought a 50 per cent stake of Expanish in Buenos Aires, Argentina, offering Spanish language courses. Its shopping spree continued with the acquisition of LSC Language Studies Canada in 2011, and new EC schools opening in Los Angeles and Miami this year.

ELS has also experienced a growth spurt: between 2003 and 2010, ELS opened language centres on university campuses throughout the USA and two in Canada. Last year, when it celebrated its 50th birthday, it acquired Universal English College in Sydney, Australia, marking its first foray into the Australian market, and, eager to tap into the growing education travel market in India, opened a counselling service, headquartered in Chennai, India. Commenting on their move into the Indian agent market, John Nicholson, Director of Marketing and Communications at ELS Educational Services, explains, “It matches students with the most suitable universities, based on their academic history, goals, programme interests and financial resources. ELS India also assists students with their university selection, document processing and acceptance notification – all done at no cost to the applicant.”

Eurocentres, meanwhile, has been re-jigging its operations and expanding into new language markets. According to Eurocentre’s Gaby Billing, a decline in the Australasian market led to them withdrawing the Eurocentres brand from its Brisbane centre in 2010 and more recently its Auckland and Perth centres, which continue to operate under their original franchise owners. Nevertheless, Eurocentres does believe that Australia is a significant market with the company recently partnering with Performance English in Sydney and Melbourne. Meanwhile, enrolments for the USA have been strong resulting in the organisation opening its own school in San Diego this summer. It has also moved into the Mandarin market, with a centre in China, and next year intends to strengthen its Spanish presence with a new school in Cuzco, Peru and a partnership with Babylon Idiomas.

One recent development among the major players of the language travel industry is the fragmentation of the Geos chain after the Japanese-based Geos corporation filed for bankruptcy in 2010. Geos North America became Geos Languages Plus in 2011 when a network of 11 language centres in the USA and Canada were acquired by Sprachcaffe Languages Plus. Husárová says,“The company profits from its growing internationality, both in terms of destinations as well as our agent partners. The takeover of 11 new language schools in Canada and the USA in 2011 has clearly played a significant role in this matter.” Indeed, the acquisition means that the organisation now consists of 31 language centres in 12 countries worldwide, teaching seven languages.

Tight focus
Many of the big international education players focus on the academic preparation sector. Into University Partnerships, for example, was founded by its Chairman, Andrew Colin – one of the original founders of Study Group – in 2005, and has to date, launched 13 joint ventures with universities in the UK and the USA. “Initially focused on on-campus pathway provision, our model is fast evolving to meet the demands of the growing, and increasingly mobile global student population,” says Into’s Tony Evans. Into has recently stepped up its academic content by combining language and subject learning. Evans explains, “We have in 2012 introduced a range of language courses that completely integrate subject and language learning in every lesson. The methodology stems from CLIL [Content and Language Integrated Learning] but the courses are firmly language courses. This innovative approach to language study is not matched by other EFL course providers,” he claims. Into has also expanded into the Chinese market offering Chinese language summer courses, as well as a range of academic programmes.

Cambridge Education Group (CEG) has also focused on university pathway programmes, and since 2008, has grown enormously. Stephan Roussounis, Director of CEG’s Stafford House School of English, recounts, “In that time we have launched seven FoundationCampus centres in the UK, Europe and USA, launched a UK£4 million (US$6 million) campus in the heart of Bloomsbury – which is home to CATS College London and Stafford House School of English London – and we have expanded and refurbished our Canterbury schools and opened a new school in Brighton.” It has also expanded its university pathway offerings into the USA and Europe, with ONCAMPUS Boston, a partnership with several universities and colleges in the Boston area; and Amsterdam FoundationCampus, a partnership with the Faculty of Economics and Business at the University of Amsterdam.

Similarly SGI has concentrated on the academic sector of the market, delivering placement programmes in the UK, Australia and the USA by 1997, then rolling out to New Zealand, Canada and Ireland. This year has seen further activity for SGI in the academic sector with a partnership in London with fashion and design school, Istituto Marangoni to prepare international students for a degree at the institute. SGI also announced a new partnership with Nyenrode Business University in the Netherlands to deliver international foundation year programmes, as well as pre-MBAs.

Navitas English is another group that focuses on the vocational sector, which includes not only academic preparation but also “pathways to work”, which prepares students for their careers and Tesol teacher training centres.

There has also been a trend towards opening English language branches or partnerships in other countries – for example Kaplan offers degree programmes from international universities on its campus in Singapore, and ELS has centres in Indonesia, Oman, Saudi Arabia and Malaysia. This, according to Nicholson, is one of their growth strategies for the future. “[We intend to] create more International Pathways for students, enhancing their opportunities to fulfil their educational aspirations in English-medium education whether in their home countries, in English-speaking countries or international education destinations.”

What differentiates Berlitz from other major industry players, according to the company spokesperson, Niaya Harper, is that they are no longer just a language service provider. “We are a global education company,” she relays, “with a diverse and comprehensive portfolio which adds communications skills development, global leadership training and customised dynamic solutions for cultural competency.” Transforming its business remit, Berlitz acquired three organisations from 2009 to 2011– each with a solid grounding in global leadership training and media-based learning. Language services are still a core part of what they do however, affirms Harper, with the company currently expanding its language centres in the Chinese market.

Jostling for market share
Through acquisition and expansion the big players are certainly getting bigger, so what will the market of the future look like? Some sources forecast that consolidation will lead to the demise of some independent players. “Unfortunately not all independent operators will be able to survive the changing visa environment, economic crises and in the UK, the Olympics,” says Roussounis. “What we don’t see much of these days is independent schools being bought by independent operators. Most owners are now selling to groups and barriers to new entrants are at an all-time high.”

However, Roussounis, like most other sources, believes there will always be a market for independent schools. Ward Lincoln at Oise observes that while there is a polarisation in the language school sector, with the big players at one end and independently owned schools at the other, the big companies tend to offer pathway programmes leading to university entry, while the smaller schools seem to target niche markets or niche destinations.

David Anthonisz, Global Sales & Marketing Director at Embassy CES, part of SGI, agrees. “In language education, as with many other industries, there is a place for local independent providers and multinationals; both have an important role to play,” he comments. “Further consolidation is inevitable in the sector, but not necessarily at the cost of consumer choice. The larger players have the capacity to input greater investment and appeal to a more diverse student base.”

Tara Mccallum at EC points out that being big does not necessarily mean a loss of identity. “EC is a perfect example as to how mergers and acquisitions can better the language teaching industry,” she says. “We have brought schools back to life with our brand and teaching methods and opened brand new schools in popular destinations. Although we have a distinct brand and look, each one of our schools takes on the flavour of its destination allowing students to enjoy the comfort of the EC name they trust while partaking in experiences unique to their destination,“ she adds.

Ultimately size does not really matter; what counts is quality, as Helen Zimmerman, Executive General Manager at Navitas English, points out. “There will always be a place for different sized operations however the key criteria for success no matter the size is the student experience.”


Agent support

One aspect that does distinguish some of the bigger players in the education training market is their network of regional agencies and support offices. While some, such as ELS’s centres in India, do take on an agent role for students, many others are there merely to support overseas education agents. For example, Kaplan has 19 regional sales offices in 18 countries, but Erez Tocker, Managing Director of Kaplan, stresses that most of these “are solely dedicated to supporting our partners in country”.

This indicates how important overseas education agents are to the big guns in the industry. According to Antonio Anadón, IEG derives 89 per cent of their enrolments through their overseas agency partners. “Agents are our foundation!” he says.

David Anthonisz, Global Sales & Marketing Director at Embassy CES, part of SGI, relates, “We work very closely with our education agent partners and they are an extremely important part of our global business. It is the role of our 34 Study Group offices to support, train and nurture our partnerships with these agencies. Our success goes hand in hand with the success of our agents and we foster these partnerships through close relationships; education; training and assisting with access to our successful alumni.”

Given the importance of agents, big chains tend to invest heavily in agent support. Helen Zimmerman, Executive General Manager at Navitas English, says that they provide support through a number of different avenues. “While commercial terms are important we focus on a holistic approach to ensure our partners feel part of the Navitas network. Some key elements of support include our Annual Business Partners Conference, the Navitas Regional Office network, fam tours to showcase our facilities and meet the staff, on-going training – both face-to-face and videoconferencing – incentive scheme, preferred partner referral and listing on websites.”

Ward Lincoln at Oise notes that working with agent partners is all about relationship building. “We are in it for the long run and never make short-term based decisions. The clear pricing, administration and commission structure helps the agencies to concentrate on what they are buying wholesale and the difference it makes to the consumer, rather than unpicking an opaque and confusing offer,” he says.


Who’s who

St Giles

Language centres: seven year-round English language centres and 17 junior summer centres in the UK, the USA and Canada; a franchise operation in Brazil
Regional sales offices: none
Location of HQ: UK
Total no. of students taught in 2011: 14,000
Company ownership: privately owned by original founding family

EF

Language centres: Hundreds of language centres across the world; 41 international centres and several hundred local centres
Regional sales office: 150 sales offices across 50 countries
Location of HQ: Switzerland
Total no. of students taught in 2011: undisclosed
Company ownership: Privately owned by the Hult Family

Study Group International

Language centres: 38 year-round centres in Australia, New Zealand, China, USA, Canada, UK and other European locations, and 33 summer school centres in the UK, USA, Canada and Australia
Regional sales office: 34 regional offices across 25 countries
Location of HQ: No single HQ
Total no. of students taught in 2011: 55,000
Company ownership: Providence Equity Partners

Eurocentres

Language centres: 22 centres in 12 countries
Regional sales offices: four in three countries (Switzerland, France, UK)
Location of HQ: Switzerland and UK
Total no. of students taught in 2011: 13,000
Company ownership: Foundation owned by itself, founded and supported by Swiss retail organisation Migros

Berlitz

Language centres: 550 language centres in 70 countries
Regional sales office: n/a
Location of HQ: Japan, the USA and Germany
Total no. of students taught in 2011: undisclosed
Company ownership: Owned by parent company Benesse Holdings

Navitas English

Language centres: 18 colleges across Australia and one in Singapore; also provides curricula and support to Navitas’ other operations in Australia, UK, Indonesia, Vietnam, China and USA
Regional sales offices: 19 offices in 16 countries
Location of HQ: Australia
Total no. of students taught in 2011: 22,500 ESL students plus 21,000 clients for English language, settlement and work preparation programmes for migrants and refugees
Company ownership: public company listed on the stock exchange


ELS Educational Services

Language centres: 80 language centres in 11 countries: USA, Canada, China, Australia, France, Indonesia, Malaysia, Oman, Panama, Saudi Arabia and South Korea
Regional sales offices: USA, India, Japan, Taiwan, Thailand, Turkey, Russia and Vietnam
Location of HQ: USA
Total no. of students taught in 2011: undisclosed
Company ownership: subsidiary of Berlitz Corporation, which is owned by Benesse Holdings, a public corporation listed on the Tokyo Stock Exchange


Ideal Education Group (IEG)

Language centres: over 24, including 16 year-round schools in Spain, four in Mexico, and eight junior summer camps in Spain
Regional sales offices: Spain, Mexico, Netherlands, UK, China and USA
Location of HQ: Spain
Total no. of students taught in 2011: over 40,000
Company ownership: Privately owned by founder Antonio Anadon


Cambridge Education Group

Language centres: Three English language schools plus 21 summer centres all in the UK. Also operates three academic sixth form colleges in the UK, a creative arts college in the UK and seven on-campus foundation programme providers in seven locations in the UK, the Netherlands and USA
Regional sales offices: CEG has five offices in five countries – Hong Kong, Thailand, China, Russia and Korea
Location of HQ: UK
Total no. of students taught in 2011: 13,000
Company ownership: Owned by Palamon Capital Partners


Into University Partnership

Language centres: nine physical centres, 16 partnerships in the UK and USA
Regional sales offices: no sales offices but agent support offices in a number of countries
Location of HQ: UK
Total no. of students taught in 2011: undisclosed
Company ownership: a limited company based in the UK


Kaplan

Language centres: 41 English language schools, 12 junior centres and 10 university pathways colleges in seven countries
Regional sales offices: 19 regional sales offices in 18 countries
Location of HQ: UK
Total no. of students taught in 2011: undisclosed
Company ownership: Kaplan International Colleges belongs to Kaplan Inc, which is a wholly owned subsidiary of the Washington Post Company


Bell

Language centres: 10 centres in the UK (a mixture of junior, adult and teacher training centres)
Regional sales offices: Two sales offices in two countries: the UK and Brazil
Location of HQ: UK
Total no. of students taught in 2011: approximately 10,000
Company ownership: Bell Education Trust Limited


Sprachcaffe/Geos Languages Plus

Language centres: 31 language schools in 12 different countries
Regional sales office: n/a
Location of HQ: Germany
Total no. of students taught in 2011: 50,000
Company ownership: Privately owned by Marcello and Alberto Sarno


OIS

Language centres: 27 year-round centres for adults in the UK, USA, Ireland, Australia, Canada, Germany, France and Spain; 28 summer centres for juniors in the UK, Ireland, Spain and Germany
Regional sales offices: 11 in seven countries
Location of HQ: UK
Total no. of students taught in 2011: 20,000
Company ownership: Privately owned by Till Gins


Contact any advertiser in the this issue now

The following language schools, associations and accommodation providers advertised in the latest edition of Study Travel Magazine. If you would like more information on any of these advertisers, tick the relevant boxes, fill out your details and send.

Name

Company

Country

Telephone

Email


ACCOMMODATION
Britannia Student Services

ASSOCIATIONS/GROUPS
ALTO  
English Australia  
Feltom Malta  
Languages Canada / Langues Canada  
Quality English  
Study Gold Coast  
English in Chester  

AUSTRALIA
Impact English College  
Access Macquarie Limited  
Bond University  
English Australia  
Flinders University  
IELTS  
ILSC Australia  
International House Sydney Teacher Training & Prof  
Language Studies International  
NEAS Australia  
Perth Education City  
Study Gold Coast  
University of Newcastle Language Centre  
UNSW Global Pay Limited (University of New South W  

BELGIUM
CERAN Lingua International  

BRAZIL
GTMI Global Tailor Made Idiomas  

CANADA
Bow Valley College  
Connect School of Languages  
East Coast School of Languages (ECSL)  
English School of Canada  
Global Village  
Hansa Language Centre of Toronto  
Humber College  
ILSC - International Language Schools of Canada  
ILSC Australia  
ITTTI Vancouver  
Omnicom School of Languages  
Languages Canada / Langues Canada  
Niagara College  
Ottawa International Student Programmes (OISP)  
Study Abroad Canada  
Vancouver English Centre  
Guard. Me  
Ingle International  

CHILE
Latin Immersion  

CHINA
iMandarin Language Training Institute  
Mandarin House  

ENGLAND
AngloLinguist  
Barnsley College  
Bell International  
Cambridge Education Group  
Camp Beaumont  
d'Overbroeck's College  
Study Group  
International House Bristol  
International House London  
International House World Organisation  
INTO University Partnerships  
Kaplan International Colleges  
Prime Education  
LAL London  
Lila*  
London School of Business & Finance  
London School of Business & Finance  
Malvern House College London  
Mayfair School of English  
PGL  
Queen Ethelburga's College  
St Giles International  
Sussex Coast College Hastings  
English in Chester  
Twin Group  
University of Essex - International Academy  
Westminster Kingsway College  
Wimbledon School of English  

EVENTS
British Boarding Schools Workshop  
IALC International  
IEFT- International Education Fairs of Turkey  

EXAM BOARDS
Cambridge Esol  
City and Guilds Branch Office in Europe  
IELTS  
Trinity College London  

FIJI
Tadra Institute  

FRANCE
Accent Francais  
Alliance Française Paris Ile de France  
CAVILAM  
CLE  
Ecole Suisse Internationale  
France Langue  
French in Normandy  
ILCF Institut Catholique de Paris  
Langue Onze Toulouse  
LSF Montpellier  
Lyon Bleu International  
Paris Langues / Club CEI des 4 Vents  

GERMANY
Sprachcaffe Languages Plus  

HONG KONG
English For Asia  

IRELAND
Active Language Learning  
ATC Language & Travel  
Clare Language Centre  
Galway Cultural Institute  
Galway Language Centre  
Horner School of English  
IH Dublin  
Language College Ireland  
MEI Ireland  
MLI International Schools  
University College Cork Language Centre  

JAPAN
Yokohama International Education Academy  

MALTA
EC English Language Centre  
inlingua Malta  

SERVICES
Pay to Study/FELCA  

SOUTH AFRICA
Good Hope Studies  
EC Cape Town  
EF  
inlingua Language Training Centre Cape Town  
Eurocentres Cape Town  
English Language School Cape Town  
Interlink School of Languages  
Jeffrey's Bay Language School  
LAL Cape Town  
Kurus English CC  
International House Cape Town  

SPAIN
International House - Sevilla CLIC  
Malaca Instituto - Club Hispanico SL  
Xul Comunicación Social  

SWITZERLAND
EF International Language Centers  
Eurocentres International  

TOURIST BOARDS
Malta Tourism Authority  
Study Gold Coast  

UKRAINE
Novamova  

USA
Besant Hill School  
California State University San Marcos  
ELS Language Centers  
Forest Ridge School of the Sacred Heart  
Glenholme School  
Liberty University  
New York Military Academy  
Rennert  
Saint John's University  
University of Arizona  
University of California San Diego  
Zoni Language Centers