A new report has cautioned that the common practice of discounting in the ELT sector threatens schools’ financial viability and the quality of education on offer. But despite this, many stakeholders are still feeling pressure to offer discounts.
A survey of 41 respondents, made up of school representatives at an industry conference in September, revealed that the vast majority often or always feel pressure to offer discounts, with many feeling they need to do so to keep up with competitors.
Delegates at a forum held by the Federation of English Language Teaching Organisations in Malta (FELTOM) were asked how often they felt pressured to offer discounts to stay competitive, with 66% indicating that they ‘often’ or ‘always’ did.
Respondents said they were chiefly driven to offer discounts by the need to stay competitive or to meet consumer demand, but over a third (35%) said they felt that their school’s pricing did not reflect their product’s true value.
“This practice has now become an inherent one within industry and it continues to pose threats to company financials due to dwindling profit margins and potentially having to make adjustments that effect quality of service in order to survive,” the report warned.
Students have flocked to Malta to learn English for years, tempted by its sunny climate, friendly locals and proximity to mainland Europe. According to the country’s National Statistics Office, almost 81,000 students came to Malta in 2024 for English language programs.
But the report said that demand for language learning had dipped during the pandemic, meaning that many language schools felt they needed to offer discounts to keep their student numbers up.
However, it offered a glimmer of hope, suggesting that more collaboration between agents and institutions could help solve the problem.
FELTOM was inspired to survey its own members on discounting following a similar survey of delegates at a conference held by the Association of Language Travel Organisations (ALTO), which questioned agents as well as schools and associations, totalling 49 responses from over 18 countries.
Some 60% of agents and 70% of schools at the ALTO event said that they ‘often’ or always felt pressure to offer discounts.
Delegates at the two events differed in their opinions as to when it was justifiable to discount at a reasonable level. Far more respondents from the ALTO conference (69% compared to 52%) said it was reasonable to offer discounts during the low season as a way to make up numbers.
Discussion at the FELTOM event revealed that respondents generally thought that discounting “cheapens the product and industry” – warning that this could force them to take cost-saving measures such as hiring less qualified staff.
“Such actions are believed to generally undermine the value of the service offered,” the survey said. “Discounting undoubtedly eats away from the bottom-line, leaving businesses struggling with increasing costs and having to deal with the expectation of giving more for less. Also, once this expectation has been set, particularly with agents it is very hard to go back from that.”
However, the majority of delegates at both the ALTO and the FELTOM events believed that steps could be taken to combat unhelpful price competition between schools.
A combined 77% of ALTO respondents and 72% of FELTOM respondents felt it was either a definite or a possibility, ‘with the right strategy’ for this to happen with collaboration between schools and agents.
“Both international and local perspectives point to the same underlying issue,” the report said. “Excessive price competition undermines value, erodes profit margins, and threatens the overall credibility and quality of the industry.”
