The UK’s ELT sector is set to undergo a structural change that will see providers selling on value instead of volume, offering greater product sophistication, using alternative recruitment channels and introducing dynamic pricing models.
These forecasts were laid out by various commentators such as Samuel Vetrak, CEO of market research and insight firm, StudentMarketing, at the English UK marketing conference last week in London.
Speaking to delegates, Vetrak said 2015 was a difficult year for ELT globally “but even more so for the UK”.
He expects 2016 to be better, “especially for big players and for those who are taking steps to adjust to the new situation”.
Demographics dictate that the traditional target student group of 15-19 year olds will shrink
During a separate session entitled UK ELT: Growth or decline?, Jodie Gray of English UK revealed the latest incomplete data for 2015 – with half of all data sets in from private sector members – which shows an average drop in business from 2014 to 2015 of 11.7%, measured by student weeks.
“Our predicted figure of a drop in the region of 11% will come as no surprise and we’re expecting our full set of student statistics, once they’ve been fully analysed and are released in early April, to reconfirm this,” she said, but added that the organisation is positive 2016 will be a better year for members.
“The industry is cyclical and is undergoing a major structural shift as it matures. Our members are robust enough to withstand this.”
Amy Baker of The PIE News told delegates that education agents are observing a market shift towards English as an “enabler” and in some cases, sending clients to new providers rather than language schools.
Ireland and Malta, meanwhile, had fared better last year comparatively because of more favourable exchange rates, she added.
Richard Day, acting chief executive of English UK and owner of English in Chester, exhorted the audience: “What the current situation is teaching me is that I have to look at my product.
“If you haven’t changed your course in the last 10 years, then I suggest you need to look at it now because the market changes almost on a daily basis.”
According to Vetrak, demographics dictate that the traditional target student group of 15-19 year olds will shrink, requiring providers to focus on getting revenue from value points rather than volume.
Longer stays, accommodation, insurance, meet and greets, extra courses or activities and packaged trips will become more important to providers, he said.
The junior market, however, is expected to flourish as global demand shifts towards younger populations. Indeed, Gray pointed out that junior business across private member centres of English UK has soared to represent 47% of business in 2014, up from 25% of business 10 years ago.
There is significant investment being made into direct booking
Distribution for ELT courses will continue to largely rely on the school-agent relationship but will involve other recruitment channels, said Vetrak. Providers will likely go direct to market by reaching out to HR departments at companies or guidance counsellors in countries where they exist, he predicted.
Baker, meanwhile, observed that there is significant investment being made into direct booking, with another new platform backed by a tech entrepreneur soon to launch, with ambitions to capture global student interest.
Despite some providers changing their operational models to compete in the UK’s maturing ELT market, Vetrak said he hasn’t seen the structural change necessary for the market to be considered sustainable.
“Many people are still fighting on price, which is the status quo,” he commented.
Dynamic pricing, a fundamental change that’s been mooted in the study travel industry for several years, will finally arrive to the sector within the next five years, he forecasted.
Global price setting will become regional, occasional special offers will become strategic and frequent, providers will begin to hedge against exchange rate changes, annual prices will become seasonable and providers will find other revenue sources beyond just tuition.
