Ignacio Mas De Xaxas is President of Spanish educational tours and study abroad agency, British Summer. He was prescient in seeing a lack of innovation among many language teaching providers, and talks to The PIE about the evolution he sees in business direction.
The PIE: How was business in 2015?
IMdX: We saw business to Ireland going up, to Canada is going up and then USA, and England, going down. Summer was another 4-5% down compared to last year.
The PIE: And you don’t think it’s going to get any better this year?
IMdX: I don’t think 2016 is going to be better, we destroyed the middle class in Spain.
The PIE: But you were saying that the “academic year” is a growing market?
“Even in the summer drop off, for our ‘singular programmes’ they increased almost by 15%”
IMdX: The thing is that if you go to a private school in Spain, you pay between €400-600 per month, for 10 months this is €6000 plus a summer programme which is another €3-4000: you’re almost in €10-11,000. A J-1 programme to the US is €11,000 one year, public high school in the UK is €15,000, so for more or less for the same amount of money you can send your kid abroad for the whole year and parents, they really are looking to get a return on investment.
And we started seven years ago offering ‘singular programmes’, like a film programme for one month, or a specific programme of some sort, and there is some movement here. Even in the summer drop off, for our ‘singular programmes’ they increased almost by 15%.
The PIE: So what is an example of a good singular programme that you work with?
IMdX: Look, it’s an MBA or it’s work experience or it’s what we call ‘three capitals’, we have special interest programmes in acting, film, dance, photography or integration in the USA, or leadership programmes or just a tour around the USA or Canada with teenagers…
The PIE: So no language?
IMdX: No language.
The PIE: You’re summing up all the trends I am hearing in a nutshell. It’s about specialisation, long-term academic, ROI and not wanting to be part of the herd, right?
IMdX: Right, and I think it’s good.
The PIE: But the challenge for agents is to see that.
IMdX: We see that. If you have a chance, have a look at a website called pepperscope.com, it is something that we built in 2014 [and focusing on new types of experiences abroad].
“The idea is to be a 100% online business, so clients choose the services that they want”
The PIE: That’s a separate brand you have?
IMdX: It’s a website under British Summer name, but it’s an online agency business.
The idea is to be a 100% online business, so clients choose the services that they want: if they want to book directly with the schools they can do it, if they want to do it through us they can do it and then we charge a fee, if you want us to take care of the travel arrangements then we charge another fee.
The PIE: But they can book directly with the school?
IMdX: They can book directly with the school. We can still take commission.
The PIE: Very interesting.
IMdX: What we would like in a couple of years is, once we are able to prove to the schools that we are giving them leads, then we will also charge for the leads. It is an open market, it is more open year after year.
The PIE: You also mentioned approach to pricing is changing… previously you would always add a service charge to the cost?
IMdX: Yes, we were working with net fees, we have the school price and then we deduce the commission and then we add on margin, but then obviously the price is always more expensive than if you go directly to the school. Now, no. It’s the same price, which is bad because we are losing margin that means we need more students to make the same profit; but on the other side, it is good because that forces us to have a real partnership with the schools.
“Once we are able to prove to the schools that we are giving them leads, then we will also charge for the leads”
Now, I need to be very sure that this is a school partnership that I want. I have to be very sure with who I am going to commit [to work] and what they are going to do, because they are competing with me in the market, they’re in Spain also doing adverts directly.
The PIE: All of them?
IMdX: All of them. All them say they are committed to agents, or direct booking is very small blah blah, that’s not true.
The PIE: So where are schools advertising directly? On Google?
IMdX: On Google. They don’t say it, and the ones that say that they do it, they do more than what they say.
The PIE: I think it depends on the school, I mean some schools say to me they’re still 90% agent-channelled business.
IMdX: Big schools? All the ones that say they don’t do a lot of Google campaigns, I tell them, ok, whatever you do, send the link to me. I am in a better position to deal with this, in the sense that I am in the market, they come visit us, we have the time, it will cost you the commission, but if the direct bookings that you are getting are that small, it’s not going to make that much of a difference… yet none of them wants to do it. Why? And I am sure I am going to be able to convert much more business than they can; even then they don’t want to do it, because I think they do more direct business than they say.
The PIE: And you were saying that language providers have not innovated enough.
IMdX: We run our own summer camps in Spain and we started 10 years ago and the quality and the innovation of the activities we did in the last five or six years is much higher than what the UK has been doing in the last 20.
We were adding horse riding, soccer, whatever but we were also adding opera lessons, brain camp, Tai Chi, Kung Fu, robotics, cooking, all these kind of things, so when the student was jumping from summer camps in Spain to [overseas], in some way they were taking a step back in the type of activities.
“The quality and the innovation of the activities we did in the last five or six years is much higher than what the UK has been doing in the last 20”
We were complaining, “your programme is not motivated to [make students] learn, not creative, and one of the big players said to me, Ignacio, at the end of the day, this is a business, and maybe it’s true that our [courses] are getting old fashioned or whatever for the students, but we have the Russians, we have the Chinese, we have the Brazilians’. That was four years ago. Now, we don’t have the Chinese, Brazil and Russia is going down.
In British Summer, seven years ago, we did an exercise with our 70 staff, 65% of whch you have children, and I asked them, where would you send your kids? The result was no more than 20% of the total programmes that we were running.
The PIE: And you fed that back to partners?
IMdX: Yes I fed that back, but everything was fully booked, and whatever you propose, it’s an extra effort. It’s like, “you know, I can sympathise with you and I can see that what you are running in Spain is great, but I don’t need to.” That was a short-term view. We have evolved our company proposition from language learning to language experience.
