The latest ALTO Industry report, collecting data from 85 schools, 84 agents, seven associations and seven service providers in late 2021, has again put recovery further ahead in the future, when compared to pre-Covid revenue and bookings.
Previous reports in Q1 and Q2 of 2021 had suggested that businesses were expecting to be at 66% of revenue by June-August 2022 and then at 63% by September-December 2022.
The latest survey indicates that overall stakeholders are expecting to see around 63% recovery by January-May 2023.
While school respondents suggested in the previous quarter that they would expect to see 71% of 2019 revenue by early 2023, this fell slightly to 67% revenue expectations in the Q4 survey. The drop in projected recovery over the reports has been clear in previous surveys.
Every pulse snapshot differs each quarter, Reka Lenart ALTO association manager explained, but “a general rule is that when we get closer to a certain period examined in the booking projection figures… organisations reduce their expectations”.
The findings for schools in the UK predicted 68% for early 2023 of 2019 revenue in both the Q3 and Q4 surveys, but other destinations saw expectations fall.
Germany saw the biggest fall in optimism, with 84% of 2019 bookings predicted for January-March 2023 in the Q3 survey, while the Q4 survey suggested schools would only see 67% of 2019 revenue by this time next year.
Canadian providers were projecting 72% by early 2023 in the previous survey, this fell to 67% in the latest survey. The same was noticeable among Irish providers falling from 74% to 67%, the US saw 66% drop to 64% and Malta dropped from 64% to 59%.
ALTO noted that it is “interesting to look at how projections” submitted for January-May 2023 during the four quarters of 2021 changed.
“South African and German schools were certainly positive about Sept-Dec 2021 booking numbers in Q4 2021”
“It’s a steady decline in the UK, whereas Ireland and International organisations pick up some hope towards the end of 2021. Canadian schools experienced a sudden rush of optimism in Q2 2021 presumably when the mass vaccine program was rolled out but came back into average range in the second half of the year.
“South African and German schools were certainly positive about Sept-Dec 2021 booking numbers in Q42021, they projected 12% and 15% above industry average, respectively.”
While long-term projections for early 2023 from the US, South Africa and Germany stay in line with the average, Maltese schools project 8% lower recovery expectations, the organisation added.
Agents also suggested slower long-term recovery but projections for early 2022 were more positive.
While late 2021 projections among all agents were slightly higher in the last quarter of the year, longer-term recovery for late 2022 fell from 58% to 56%, and early 2023 was projected at 60%, down from 67% in the previous survey.
“Agency projections in Q4 2021 for Sept-Dec 2021 are slightly up on the Q3 figures, but long-term projections show a gradual decline from January 2022 onwards,” ALTO said.
“For the first time since we collect data, agencies from LATAM show an increase in expected recovery level for all the time period examined in the Q4 2021 report. This is a fantastically positive news, which will hopefully repeat in our next survey and will become reality soon.”
“This has never happened before with any of the destination or source markets since we collect the data,” Lenart told The PIE.
“This has never happened before with any of the destination or source markets since we collect the data”
The survey also found that around seven in 10 respondents expect the number of agencies and schools to be lower than before the pandemic.
Some 69% think there will be fewer agencies and 68% fewer schools when compared to pre-Covid, a further 16% indicated larger agencies will emerge, while 19% said that the smaller number of organisations will be a result of the formation of larger chains and school groups.
To some extent, this has already been evident during the pandemic, with the latest big announcement that ILSC and ELS, with its parent company Berlitz, has merged.
Brand engagement and marketing coordinator at International House World Organisation Giuliana Faldetta told The PIE that while no schools would confidently predict a return to 2019 numbers yet, the group “definitely feels a renewed positivity”.
“International House is planning face-to-face events, for both school owners and for agents to meet schools, because we are determined to place ourselves in the best position to capitalise on the pent-up demand,” Faldetta, at the associate non-trading member of ALTO, added.
“The ALTO pulse’s survey of the language travel industry is always valuable, and the figures presented reflect the cautiously optimistic view also held by many IH schools.”
Lenart also pointed out that more companies confident about their survival is “welcome news”.
The average sustainability figure has stayed at the same level in Q4 2021 as it was in Q3 2021 at 63%, the report noted. This group of businesses said they have sufficient funds to sustain their business for the next six months, until June 2022, if revenue streams stay the same.
However, 11% of those completing the survey are “still in a high-risk zone and must make drastic changes to their organisations as well as relying on government support in order to sustain their operations”, ALTO added.
“The Pulse report is interesting for decision makers because they can benchmark their expectations on national level, with other markets and the global average figure,” Lenart added.
“It’s very much a numbers report, but as we discussed earlier it’s impossible to squeeze anything more detailed from people who are – thank god – busy preparing for actually sending and receiving students!”