London-based The English Studio has been acquired by Real Experience Group and newly appointed managing director Neil Harvey shares his strategy to grow the company during tough conditions for the UK’s ELT market. Direct bookings, low price points and expansion overseas are part of his game plan.
The PIE: Tell me about your new position and the acquisition of The English Studio.
NH: So the English Studio was bought by an Irish company actually, originally called the Kinlay Group and now called The Real Experience group. They own a whole host of different things. There are different divisions in the group: ours owns USIT, a big Irish student travel company, i-to-i, LoveTEFL, BSGT, The Travel Adventure and Adventure Central.
I’ve come on board as the MD for English Studio and am really enjoying the opportunity.
The PIE: How are you going to sail these stormy seas? I guess you have big backing which helps.
NH: We got big backing that’s true. But the real difference for us is that we are a very different kind of school. Unlike many other schools we get over 80% of our bookings direct from students and much of our business is actually recommendation-based or walk-in trade.
“Unlike many other schools we get over 80% of our bookings direct from students and much of our business is actually recommendation-based or walk-in trade”
The PIE: How many schools?
NH: We currently have three teaching centres, one directly opposite Holborn tube, one just around the corner and another in Bloomsbury Square so all in the same area of London. We average somewhere between 700 to 1000 students a week because our price point is so good.
The PIE: What’s the price point?
NH: We’re priced extremely competitively – it’s something that makes us stand out from the rest of the market. Our aim is to make English language learning accessible to as many people as possible and our pricing reflects this.
The PIE: What are the bigger plans?
NH: The next step is to move into Dublin which makes sense because we have Irish backers. We also have premises available for us centrally and have some exciting plans. The overall idea is to open very big schools in the major destinations rather than have lots of smaller schools. So after Dublin we’ll be looking at New York probably next year and then Vancouver and Sydney.
The PIE: The big five?!
NH: Yes absolutely the big five. We’ll try and replicate the same model in each and run schools of 1,000 students per week.
The PIE: And are you concerned about current market trading conditions?
NH: Yes we are but we have a core strength because the demographic of our student is very different, I like to think of us as a democratic brand, because the price point is so good.
The PIE: So it’s a volume game?
NH: It is a volume game but it’s not for the dilettante language learner, it’s not for the kid who’s got a year to waste.
“Our aim is to make English language learning accessible to as many people as possible and our pricing reflects this”
The PIE: An Easyjet approach?
NH: In so much as that were trying to do something different then yes. The key is that we are here for people who want to get on. We’re here for people with aspiration. 35-40% of our students in the school are currently employed, so they’ve come over with a dual purpose: get a job and learn English.
That makes us very different from most of the other central London schools as we’re there to support these students who work part-time. So it’s heavily European but we’re servicing a whole section of the market that others don’t service.
The PIE: You don’t have a lot of competition do you?
NH: The closest to us is probably Delfin but we’re still 25% cheaper than they are. It’s such a different world from my old world of Kaplan. It’s always been a direct school. If agents want to come and work with us then that’s great and we’ll happily work with them, but we’re not going to stop the direct channel.
The PIE: You can’t be offering that much money on commission given low costs?
NH: No, the type of agent we work with is not your typical agent in downtown Madrid with oak paneled walls where you argue over 30-35%. We’re looking at agents who are primarily web-based. And they can process volume as fast as you like.
The PIE: How do you see the industry evolving?
NH: Only more consolidation as far as I can see. Consolidation and at the same time, specialisation. Everything I can see points to strong growth in the junior sector still because there is money there for that. I think there’s great opportunity for a brand like ours which is actually saying to the market, “it doesn’t have to be like it used to be”.
“Everything I can see points to strong growth in the junior sector still because there is money there for that”
This is a democratic price point, it’s accessible to all, you can do other things while you are studying English, but what we want to do is help you really genuinely get on.
The PIE: Do you cater for a general English market or is there pathway potential, are some students wanting to progress on to HE?
NH: It’s very interesting actually, the last student survey we did, as I said, indicated that about 40% of them work and about 20-25% of those that were with us had come with the intention to get into higher ed.
The PIE: The fact is it needs a company with that sort of backing [like Real Experience Group] to be able to set up that sort of model and work on those sorts of margins, doesn’t it.
NH: It does. But what’s become very apparent to me actually is that it’s so much about a company culture, and if you get that volume end of the market, you genuinely get it. And then you can apply that to lots of different things.
The PIE: Tell me about your junior market.
NH: We have a small junior programme at the moment and we’re looking to grow that. However ours is very different as it’s not the traditional importing of Italian groups, lots of risk on residence and very much a day market for central London. We’ve got huge groups of international families living in London who want something to do with their kids over the summer.
The PIE: So your junior market is domestic, onshore?
NH: Yes, and that would be the idea in New York too. Catering for local internationals.
The PIE: Will there be collaboration between other companies in the group?
NH: I think so. We’ll be meeting up soon with i-to-i and LoveTEFL and we’re looking at what crossover we can make between their online product and our offline product. So there will be a lot of that. It’s a really friendly company and a very flat structure; everybody has a collaborative mindset.
