Taken from our sister publication, The PIE Review, here we publish The Review’s ‘Ones to watch’ in private international education: sizable operators with even bigger ambitions; they are investing in state-of-the-art premises, savvy marketing approaches and an international base to safeguard growth.
Language provision
Of all the sub-sectors of international education, the language teaching industry has suffered most from the world recession, with some language schools reporting a difficult time maintaining enrolment levels.
Business has also suffered from the respective visa and currency challenges seen in the UK and Australia. However, by diversifying products, focusing on new sectors and making strategic acquisitions, many of the larger operators have managed to keep growing healthily and look forward to 2013.
An example is sector specialist EC, which since 2010 has expanded its cadre of schools to 16 in five countries.
Over the last two years, it acquired three Canadian schools in Montreal, Toronto and Vancouver (LSC schools which are now operating under the EC brand), as well as opening in Bristol, UK; San Francisco, Los Angeles and Miami, USA. The company welcomed 34,000 students in 2011 (up 6,000 from 2010) while revenue climbed from €35 million to a very impressive €59 million.
ELS continues to grow rapidly and has opened 15 new language centres since 2010
Other ELT outfits that spread their delivery across multiple markets have also done well. Language giant Wall Street Institute has grown from 430 centres in 2010 to 459 in 2012 across 27 countries, while adding professional skills content to its core curriculum and launching an app featuring Financial Times content.
EF, which does not publicise revenues or student numbers, also reported growth expanding to 400 schools and offices across 55 countries, with many of its gains in China. “Total schools in China have probably gone from around 100-120 at the start of 2010 to the current 175 and we are still expanding rapidly in China,” says Michael Lu, senior vice president, Group Global Communications.
Indeed, on The PIE News earlier this year it was reported that EF would be opening one school a week in China for the rest of 2012. The firm’s Englishtown online school service is also expanding globally, particularly in Latin America.
US firm ELS (owned by Berlitz), which runs campus-based English schools in 85 locations, also continues to grow rapidly and has opened 15 new language centres since 2010, including acquiring an Australian business (Universal English College in Sydney, Australia).
It plans to open a further five centres in 2012/13, including an on-campus partnership with Skema business school in the south of France; its first foray into Europe.
Between 2010 and 2011, Kaplan International Colleges (KIC) states that it saw enrolments climb from 55,000 to 65,000 across its 43 English language schools, 21 of which are located in the UK, Ireland, Australia, New Zealand and Canada, and 22 in the US (where they operate under the name Kaplan International Centers).
Meanwhile, the experiences of those operators dominant in specific markets (rather than with global reach) have varied.
Navitas is an Australian success story, but has faced challenges at home
Navitas, which views itself as Australia’s biggest English provider (across private schools and public contracts) – and delivered Elicos and Tesol programs to more than 22,500 students across the country in 2011 – has suffered from the general national downturn started by changes to student visa rules in 2009 and perpetuated by a high dollar. This contributed to full year earnings (before interest, taxes, depreciation and amortization) in its English Division falling 24% to $5.2m in 2012.
James Fuller, Navitas’ group manager of public relations, blamed a tough first half. “The low result for H1 was due to lower enrolments numbers in ELICOS but mostly due to costs associated with new government English language contracts (non-ELICOS) such as staffing and setting up new locations,” he says.
Bell saw stable revenue of £25m, thanks in part to “double digit growth” in its young learners offerings
But in the UK, where English language schools have been buffeted by new visa rules and costly accreditation requirements, The Bell Educational Trust, which operates the global Bell brand, has braced the headwinds. In 2011 it educated 10,000 students in Britain and saw stable revenue of £25m (up from £24.3m), thanks in part to “double digit growth” in its young learners offerings – highlighting a juniors boom noted by The PIE last year. The company also says it is seeing growth in business overseas, particularly in Asia.
Spanish, French and other language providers
Growth has not been restricted to the English language sector, as seen with Spanish language chains Don Quijote and Enforex (owned alongside Solexico, Enfocamp and eduSpain by Ideal Education Group). Ideal’s owner, Antonio Anadón, says business has shifted to shorter courses across the group, which consists of 18 schools and eight summer camps in Spain and 12 partner schools in Latin America, due to reduced spending power in the market.
However, enrolments grew from 37,590 in 2010 to 38,975 in 2011 (plus 3% more this year so far), while revenue climbed 6,5% to close to €38,9 million in 2011 (with profits of 13%). The company now wants to build its agent base worldwide and has its eye on Latin America for 2013, after buying the Solexico chain in Mexico last summer.
“Nowadays Mexico is really going up slowly as a study and language destination and within one or two years it will be growing a lot!” says Anadón. “Our next step will be to launch our own schools in more locations in Latin America like Argentina then Costa Rica, Colombia or Cuba. Our goal is to buy the best schools in each location and give them our support, brands and top quality programmes.” [more>]
The OISE Group – which runs four language brands (as well an international school) offering French and English tuition, and keeps its size below the radar given its independent marketing of these brands (OISE, Regent Language Training, Pilgrims Language Courses and unique schools) – took on 22,000 students in 2011 at 55 adult and junior centres in eight countries. This was up by just 1,000 yet the company increased revenue by £4 million to £40 million.
Ward Lincoln, head of agent sales, explains this has been achieved through high-price-tag products. “We identified a gap in the market for intensive residential language courses for executive clients which we have gone some way to filling with the opening of OISE at Sherbourne Priors,” he says.
“We identified a gap in the market for intensive residential language courses for executive clients”
“Other developments have been in the secondary education sector with the purchase of two extra buildings in Newbury to satisfy the demand for our international high school, Newbury Hall. We have also opened a new regional office in Poland and several satellite offices in France and Italy.”
Sweden’s STS (Student Travel Schools), a not-for-profit represented in over 40 countries, saw enrolments across its junior language schools, high schools, au pair business and adult international language schools last year climb from 17,300 to 18,200, but revenue drop from €42 million to €39.5 million. A spokesperson says this was “due to low margin, short stay language” trends it has now moved away from and “currency effects”. For 2013 it expects continued growth in the Chinese market plus increased investment in inbound USA for both high school and language school products.
Meanwhile, another Europe-based giant, Sprachcaffe Languages PLUS, which teaches seven languages in 12 countries, saw enrolments rise from 40,000 to 50,000 between 2010 and 2011, driven in part by the acquisition of the GEOS chain of eleven language schools in North America last year. In 2012 it added Italian school Centro Linguistico Italiano Dante Alighieri in Firenze, Italy, bringing its portfolio to 31 schools. In 2013 it will invest €2 million to build the GEOS brand.
In 2013 Sprachcaffe will invest €2 million to build the GEOS brand
Pre-university / higher education
While the recession has arguably had little effect on higher education and pathways operators, changes to visa rules in the UK concerning Highly Trusted Sponsor status have caused turbulence for private HE and pathway providers there, while currency issues have caused problems in Australia.
Navitas has suffered from these trends in its University Programs Division, which offers pathways and degree programmes in 30 colleges worldwide. It saw 14,097 enrolments in financial year 2012, an overall 3% decline against the prior corresponding period, although this reflects a moderately improving situation “as stability returns to the key markets of Australia and the UK following gradual implementation of regulatory changes”, according to the company.
Modern premises offered by CATS College in Canterbury, operated by CEG
However, growth in the North America region remained strong with Canadian full-time enrolments growing by 22% and its Singapore college recording 11% growth. Navitas also opened three more colleges (two in the UK and one in Australia) in 2012.
“Though there is a continuous need to better understand the ongoing effects of policy changes on the global international education sector, and how they influence students, there are emerging trends of improving demand which should reflect positively in FY13 and beyond,” says CEO, Rod Jones.
Others however have sidestepped the headwinds, such as Kaplan International Colleges, whose seven pathways colleges in the UK saw enrolments climb from 3,000 in 2010 to 4,000 in March 2012, thanks in part to rising interest from Latin America.
INTO University Partnerships which runs 16 partnerships with HE institutions in the UK, US and China, grew its enrolments from 8,177 in 2010-11 to 11,005 in 2011-12.
The company, established by Andrew Colin, who previously set up Study Group, says its revenue climbed from £82 million in 2010/11 to £122 million in 2011/12 and that it plans to launch seven more partnerships into 2013.
“We have continued to adopt a premium pricing position which obviously delivers healthier profit margins”
Fellow UK-based company Cambridge Education Group has also seen promising growth across its five brands, which cover pathways, pre-university courses and language training. Since 2010 it has launched new FoundationCampuses (pathways) with universities in London, Sunderland, Boston and Amsterdam; CATS College high school operations in London and Boston (to complement existing operations); and the Stafford House School of English in London, with new openings slated for 2013.
Head of marketing, Betty Lee, says the company is focusing on margins, not numbers. “We have continued to adopt a premium pricing position which obviously delivers healthier profit margins,” she says.
Total student volumes climbed from 13,000 in 2010/11 to 14,000 in 2011/12, while revenue grew from £44 million to £55 million.
INTO organised a major partners conference in the UK in Dec 2012 (here, at Newcastle United Football Club)
Study Group, another of the ‘G5’ pathways operators – which also operates ELT division Embassy English – continues to build its pathways and HE offerings in North America, Australasia and Europe (through its International Study Centres, Bellerbys and Taylors brands). The company did not provide enrolments for individual divisions but said numbers across the group were currently 60,000, up from 55,000 in 2009-10.
Higher education / business
In the higher education space, global business school HULT – sister company to EF – has continued to be a formidable force. Since 2010 it has opened a campus in San Francisco, expanded its campus in Shanghai, added a second campus in London and opened a rotation campus in Brazil extending its reach to six countries.
While it does not share revenue, its enrolments grew from 1,100 in 2010 to 1,800 in 2011 (projected to pass 2,300 in 2013). The school, which was ranked third in International Business by The Financial Times this year, encourages the use of technology to enhance classroom learning and gives all students an iPad at the start of their course. Students can also spread their courses across Hult’s global campuses for added international experience.
CIBT Education Group has also thrived because of its global reach and canny use of technology. The company runs business and language colleges and cooperative joint programmes in 18 countries, as well as its global learning network – a video conferencing platform that complements its traditional in-class delivery and offers teaching remotely throughout Asia and beyond.
In 2011 its revenue was CAN$58,575,000, up from CAN$55,955,000, and student enrolment 11,640, up from 10,360. Recent expansion highlights include the launch of programmes in northern Iraq and an increase in transfers between its ESL and HE schools.
Ex-UK Prime Minister Tony Blair, Ex-Minister David Blunkett pictured with CEO (centre right) and Group MD (right) of LSBF
UK-based LSBF has also marked itself out as a key player in the private HE space, growing its programme base since 2003 to offer undergraduate and postgraduate degrees as well as professional qualification training. In 2010-11 it opened new campuses in Birmingham, Singapore, Toronto bringing the total to nine, and catered to 25,000 students in 2011 (also via its e-learning platform, Interactive) – up from 17,000.
In an interesting marketing move, LSBF released an exclusive video interview with Tony Blair last year in which he discussed the future of education, in conversation with David Blunkett, ex-UK Education Minister.
The UK arm of LSBF and Interactive, both part of the LSBF Group, generated revenue of over £40 million in 2010-11 (up from £34 million). It is also setting its sights elsewhere. “LSBF aims to increase its presence in the UK, with a particular focus on the undergraduate market, as well as reaching new international markets and expanding its course offering,” says LSBF’S PR and social media executive, Thiago Kiwi.
• This article was first published in August 2012 in print. To see the original unabridged article with additional revenue/student figures, see here.
