Global Directions in Language Travel

Transcription

1 Global Directions in Language Travel 29

2 Research Programme WYSE Travel Confederation and ALTO are committed to understanding the ever changing characteristics, motivations, and needs of young travellers. The Confederation and ALTO gather, analyse and share important research data and market intelligence with their members, academics, corporate and government decision-makers, and the general travelling public. Our investment in research and market intelligence informs the policies, services and products which make international travel and educational experiences exciting, safe, accessible and affordable for young people. For more information about WYSE Travel Confederation s research programme, please visit: Go to the What we do section, and click on Research & Publications. For a full listing of ALTO s Global Directions in Language Travel surveys, visit: ALTO thanks the following national associations for their collaboration on the 29 Global Directions in Language Travel: Author Greg Richards Year 29 Title ALTO s Global Directions in Language Travel, 29 Publisher WYSE Travel Confederation Production ALTO s Global Directions in Language Travel was produced with fully sustainable materials, using FSC paper and soy-based inks.

3 EXECUTIVE SUMMARY The main findings of this report are: The global language travel market has grown rapidly in the past few years. That growth is now being tempered by the global economic downturn. Language travel is a high-value market which injects money directly into the local economy. The total value of the language travel market can be conservatively estimated to be US $8 billion a year (or almost 7 of the global youth travel market). The market grew rapidly up to 28 in most countries, with double-digit growth rates in many countries. Survey respondents anticipate lower growth rates for 29, but a resumption of rapid growth by 21. The language travel market continues to perform better than most other segments of the international travel industry. The 29 Global Directions in Language Travel Survey is based largely on 28 statistics obtained from 272 organisations, a considerable increase on previous years. In total, the number of language schools covered by the survey is 663. This is a significant increase from the 28 survey, which covered 239 schools. The schools participating in the 28 survey had a total of 244, students enrolled in 28. The bulk of the respondents came from Europe (49) and North America (27), which reflects their position as major language travel destinations and source regions. Of these respondents, 6 were language schools and 25 were agents. The average language school respondent enrolled almost 5 students in 28, and the average agent sent over 21 students both down from the 27 figures reported in Global Directions 28. Both schools and agents tend to be relatively small, with the majority having less than 25 staff. Schools obtained about 6 of their turnover from language travel, compared with over 7 in 27. Language students tend to be young, with the age group being the largest single category. Average course duration remained steady in 28 at around five weeks, but the indications are that shorter courses are becoming more popular in some areas. The most common courses offered are non-degree courses and college/university preparatory courses. The main source countries for language schools in 28 were Germany, South Korea, and Spain. In terms of language travel destinations, the United Kingdom and the United States maintained first and second place respectively for the third year running. In the future, respondents are most likely to see China as a new language travel destination. Schools recruited most of their students via international agents in 28, followed by Internet bookings. Agents received most of their business from referrals, and repeat customers gained in relative importance in 28, outpacing the Internet for the first time. Products that respondents see as becoming more popular with students in the next three years include intensive English courses, academic preparation, and exam preparation. For the language travel industry as a whole, however, growth was most likely to be predicted in work experience programmes, career development, and volunteer programmes. 1

4 In the first quarter of 29, language travel respondents experienced reduced levels of growth compared with the same period in 28. The average reported decline in business was -6, which is a smaller decline than for the international tourism market in general over the same period (-8). Language travel organisations are responding to the crisis in a proactive manner, with the majority of respondents looking for new partnerships and opportunities, seeking diversification, or increasing their marketing activities. Very few organisations are cutting back marketing budgets or product ranges. 2

5 INTRODUCTION About ALTO ALTO is an association operating under the umbrella of the World Youth Student & Educational (WYSE) Travel Confederation. Established in 1998, ALTO acts as the only global forum for high-quality language travel agents and schools. The ALTO network of trusted members is comprised of 17+ agencies, schools, and national language travel associations. ALTO considers trusted agent/school relationships as the key to success in the language travel business. With this in mind, ALTO facilitates its members ability to enter into business relations with each other on the basis of mutual trust, and with a view to long-term partnerships. Global Directions in Language Travel The Global Directions in Language Travel Reports are based on the collective knowledge and experience of the language travel industry, and are designed to identify and analyse key market trends and developments. In the 28 study, the coverage of the survey was increased beyond the ALTO membership to broaden its global scope and representativeness, as well as allowing more detailed regional analysis. This expanded coverage was further increased in 29. The idea behind this survey project is to provide businesses in the language and educational travel industry with a benchmarking opportunity to measure their own performance, expectations, and aims against those of other industry professionals. Background to the Language Travel Market As well as conducting survey research among language travel organisations, ALTO has also gathered existing research sources to provide a broader overview of the current state of the market. Many recent studies underline the fact that language travel has become a major travel niche market in recent years. In particular, the major world languages such as English, Spanish, and French currently dominate the market, but in the future other languages are expected to become important, particularly Chinese. A British Council report in 26 (Vision 22: forecasting international student mobility) indicated that demand for international student places in the Main English Speaking Destinations is expected to grow from 1 million in 23 to 2.6 million by 22. A recent update by the British Council estimated the English as a Foreign Language (EFL) market to be 55 million students in India and China alone. Estimating the current size of the global language travel market is challenging, however, due to the lack of consistent statistics. According to English Australia, over 1,519, people travelled to an English-speaking country to learn English in 27 generating a global industry turnover in excess of AU$16 billion (US$13 billion). The Seattle-based language company Livemocha estimates that there are currently over 375 million people wanting to learn a foreign language worldwide, and the market is currently estimated to be US$2 billion fuelled by rapid globalization, immigration, and travel. Indications of market size and growth trends are also available from individual language travel destinations. In the USA, for example, the number of inbound students on intensive English language programmes grew from 39,51 in 26 to 48,45 in 27, an increase of almost 21 (Institute of International Education, 29). The same study shows that the number of student weeks grew from 636,522 in 26 to 69,483 in 27 a growth of over 8. This indicates a small decline in course duration, from 14 weeks in 26, to 12.3 weeks in 27. The top source countries for intensive English courses in the United States were South Korea, Japan, and Saudi Arabia in 27. 3

6 Number of outbound students by country of origin, 26 vs 27 Number of Number of Country of Percent Students, Students, Origin Change () South Korea 1,26 12, Japan 7,453 7, Saudi Arabia 5,47 6, Taiwan 4,748 5, China 1,461 3, Brazil 1,572 2, Turkey 969 1, Thailand 975 1, Vietnam 517 1, France 1, Switzerland Colombia Mexico Venezuela Italy Spain Germany Hong Kong Indonesia Russia World Total 39,51 48, Source: Institute of International Education (29) In Australia, the total English Language Intensive Courses for Overseas Students (ELICOS) enrolment numbers rose to 125,727 in 28, which represents a growth of 23.4 over 27 statistics. The total economic impact of all enrolments increased from AU$1,82 million in 25 to AU$1,223 million (an increase of 16). ELICOS enrolments by nationality, 28 Country Number of students change China 31, India 16, South Korea 13, Brazil 9, Thailand 8, Vietnam 6, Japan 5, Saudi Arabia 4, Colombia 4, Taiwan 3, Indonesia 2, Nepal 1, Hong Kong 1, Czech Republic 1, Turkey 1, Other 14, Total 125,

7 Growth seems to have continued in Australia into 29. Sue Blundell, Chief Executive of English Australia, reported that in an informal survey of members in 29, the majority of respondents reported enrolments in January had grown when compared with 28. Figures from the Conference Board of Canada, quoted by Languages Canada, indicate that Canada s language training sector is worth CA$1.5 billion a year. Language training programmes provide direct employment for approximately 14, Canadians. In 27, Languages Canada s members trained 13,293 students, generating 1,63,137 student weeks. Study duration in Canada 26 Less than 4 weeks weeks weeks weeks weeks months 1 9 months to 1 year 16 Over 1 year 6 Source: Languages Canada The estimate of the total value of Languages Canada member programmes to the Canadian economy, including tuition fees, accommodation, spending on meals, retail, and activities is at least CA$745 million. In Malta, National Statistics Office figures show that EFL student numbers rose by 27.2 in 27, and reached a total of 83,288 students in 28 a decrease of.8. The average length of stay for 28 was 2.6 weeks, up from 2.5 weeks in 27. Students made up for 6.5 of all incoming tourists in 28, compared to 6.8 in 27. According to the Federation of English Language Teaching Organisations Malta (FELTOM), English Language tourism now constitutes 13 of Malta s total bed nights. The prospects for 29 look weaker, with 75 of schools expecting fewer students than they had for the same period during 28. The devaluation of the UK pound could be playing a role in this, as inbound students find that studying in the UK is cheaper than it has been in recent years. Similar problems are being reported in Ireland, which has reportedly seen a 3 drop in international students in 29. This, again, could be due to the devaluation of the UK pound, and visa problems for non-eu students. In recent years, Spain has seen growth rates of around 8 a year in language travel. According to the Federación de Escuelas de Español como Lengua Extranjera (FEDELE), in 2 there were around 13, foreign students visiting Spain for language learning, which had grown to 256, by 27. A study in 27 by the Spanish National Tourist Office indicated that language travel was worth more than 46 million (US$63 million), with the average language student spending almost 2 during their stay. In 29, however, business has been affected by the economic crisis, with a drop of around 2 in incoming student numbers. Spain caters mainly to the European market (73 of arrivals). However, Spanish-speaking countries in Latin America are also catering to the demand from North America and Brazil. Argentina attracts about 5, foreign students a year, generating a total market value of US$3 million. The Argentinean market has grown by about 5 a year in recent years. Between 25 and 27, the number of organisations offering Spanish courses grew from 89 to 211 a growth of 137. Costa Rica, Guatemala, Mexico, and Uruguay are all creating major language travel development and promotion programmes. 5

8 Global Directions in Language Travel 28 A review of the incoming student numbers from a range of countries gives some indication of the importance of the global language travel market. Student numbers and weeks by country Destination Year Number of language students Argentina 27 5, Australia ,727 Number of student weeks Canada 27 13, 1,63,137 Malta 28 83, ,548 New Zealand 27 35,166 35, Spain , United Kingdom 27 6, United States 27 54,487 69,493 For these countries alone, the language travel market caters to over 1.3 million students. Economic Impact It is increasingly recognised that language travel has considerable economic impacts for the countries and regions that students visit. The fact that language students often stay in local communities means that they spend money directly with local suppliers, increasing the economic impact of their stay. Because students stay for long periods of time, they also tend to spend more in total than other types of tourists. Many students are also visited by friends and families during their stay, which increases the impact further. Some figures on economic impact are available for individual destinations, although these figures are derived from different estimation methods, and may not therefore be directly comparable. Economic impact of language travel, various countries Country Year Impact Impact in US$ Argentina 26 $5 million $5 million Australia 26 AU$1223 million $1169 million Canada 28 CA$15 million $1759 million Ireland 26 5 million $769 million New Zealand 28 NZ$242 million $184 million Spain million $73 million UK million $259 million These figures indicate that the total value of the language travel market in these seven countries alone is over US$7 billion. If these economic impact figures are grossed up to the whole world market then the total value of language travel can be conservatively estimated to be in excess of $1 billion. Spending by international language students has a far-reaching impact on tourism spending and the wider economy. Access Economics reports that one job is created for every four students who enter Australia. 6

9 Issues in Language Travel Visas Many language travel destinations are finding themselves affected by stricter visa controls and rising visa fees. In 29, there has been much attention paid to the new visa regulations for language students entering the United Kingdom. From 31 March 29, to enrol students who want a full Adult Student visa for the UK, education institutions must be: accredited by an accrediting body approved by the UK Border Agency (UKBA) on the UKBA Register of Sponsors. Only education institutions accredited by an approved accrediting body are eligible to apply to be on the Register (English UK, 29). These new systems will bring with them additional costs for accredited schools, who have to pay for accreditation and entry onto the register. In addition, schools will be obliged to record more information about students, including: evidence on their student records system that they have seen all passports, noting which passports are from the EU (schools are not required to keep copies of EU passports) copies of non-eu students passport pages covering personal identity and their UK visa copies of non-eu students biometric identity cards when these are issued contact details for all students in the UK (address and phone numbers) attendance records for all students evidence that they have checked that members of staff are entitled to work in the UK. So far, over 2 organisations have applied for accreditation, and around 46 have been rejected. Only reputable language schools licensed under Tier 4 of the new Points-based System will be permitted to act as sponsoring institutions on student applications. In addition, all students have to demonstrate funds of UK 6 (US$919) per month or UK 8 (US$1,225) if studying in London. There has been good news for the English language teaching industry in New Zealand, however, with the announcement that from July 29, students on a Working Holiday Visa scheme can study for up to six months, as opposed to the previous three-month limit. Students from 3 countries can take part in the working holiday scheme, which is the visa route used by many English language students. Countries that participate in the scheme include Argentina, Brazil, Korea, Malaysia, Japan, the Netherlands, Sweden, and Taiwan. Working holiday visa holders must be between the ages of 18 and 3. 7

10 Quality One of the major concerns in choosing a language travel destination and a specific school is, of course, quality. In some countries, the issue of quality is now also being linked to visas, as only through approved schools can students obtain a visa (see the UK example above). The quality issue is also driving the growth and consolidation of language travel associations such as ALTO. Association membership is not only about ensuring standards, but it also provides schools with a way in which to promote their high standards to students and agents around the world. 29 sees a year of transition for the English Language Travel Association of South Africa (ELTASA). For the last 12 months, the youth travel industry in South Africa has been in the process of establishing a new association which will represent every area of youth travel in the destination accommodation, volunteers and internships, transport and tours, and education. The new body is aligned with and based on the current WYSE Travel Confederation model. It is known as SAYTC: South African Youth and Travel Confederation. ELTASA has now been renamed as EduSA. Many language travel providers are also reacting to student demands for higher quality by investing more in accommodation. For example, BWS Germanlingua has upgraded some of its student residences in Munich and Berlin to a Student Residence PLUS. These have WLAN/ Wi-Fi as well as a washing machine, a dishwasher, and other facilities in the apartments. Developing accommodation supply can help to boost revenues from language travel. In New Zealand, for example, accommodation provided or arranged by English language schools has resulted in revenue of NZ$3 million (US$23 million) for the year ended March 27 an increase of $1.5 million (5.3 percent) from 26 (Statistics New Zealand, 28). Expansion and consolidation The growth of the language travel market has helped many companies to expand and develop major global brands. For example, Study Group, which runs the Embassy Language Schools and university programmes, now caters to over 5, students a year in its operations in the UK, North America, and Australasia. Kaplan Aspect now has 42 schools in 8 countries providing English language courses. In 28 Maltese schools were active in expanding the international dimension of their operations. Clubclass acquired the East Finchley School of English, which is an English UK and British Council-accredited school located in London. In 21, the school will be rebranded Clubclass London. The Malta-based language school chain, EC, has made its third purchase of a US-based business, adding New York to its list of US locations, in addition to Boston and San Diego. Government support for language learning The growing economic, social, and cultural importance of language travel has convinced many governments to begin developing specific policies for the sector. In Argentina, the government is taking specific steps to promote language travel. The Secretaría de Turismo de la Nación (SECTUR) has joined with provincial governments, educational institutions, and the national tourism marketing organisation (INPROTUR), to develop the project Turismo Idiomático: Aprender español en Argentina (Language tourism: Learn Spanish in Argentina). In Mexico, the National Tourism Organisation has identified language tourism as one important element of cultural tourism, which in turn functions as a spearhead for tourism policy. Similarly, El Salvador has identified language tourism as a key market. 8

11 Diversification The growth of language travel providers has also enabled organisations to diversify their product range into associated areas of youth travel. In particular, previous editions of the Global Directions survey have shown that product diversification is important for most schools. Work experience programmes and adventure travel products have consistently been among the most important areas of diversification. Marketing The growth of the language travel market has seen an increase of marketing consortia and websites, particularly in the UK. For example, the Education UK website provides a facility for users to search through a comprehensive database of all accredited English Language courses available in the UK. The site has been set up to allow language learners to search for courses by location and course type. Many government agencies are also adding language course search functionality to their promotional websites. 9

12 THE 29 GLOBAL DIRECTIONS IN LANGUAGE TRAVEL SURVEY 1

13 The 29 Global Directions in Language Travel Survey In order to provide a consistent benchmark for trends and developments in the language travel industry, ALTO conducted a sixth edition of the Global Directions in Language Travel Survey in 29. As a first step, a review of the international language travel market was undertaken to identify the total number of organisations active in this market. This review indicated that there are over 3 organisations who are members of the various professional bodies in the sector. Although there may be an element of double counting in these figures through organisations belonging to more than one association, it is also likely that there is some under-estimation due to some organisations not being affiliated to any of these associations. However, these figures do give a general indication of the distribution of language travel operations globally. Regional distribution of language travel association members Region Number Africa 8.2 Asia Australasia Europe North America South America Total It is clear that Europe, Australasia, and North America are the predominant areas of association activity, with almost 9 of organisations located in these regions. The 29 survey was circulated to 167 ALTO members, 725 members of other regional language and educational travel associations, and other members of the greater language travel community. This is a substantial increase on the circulation of the 28 survey. A higher total response rate was achieved in 29, with 28 of the total membership of the participating organisations responding, compared with 24 in 28. However, the actual response rate will be higher, since a number of respondents belong to more than one language travel association. On average, each responding organisation was a member of two different associations. This indicates that the actual response rate could be closer to 5. Survey responses by organisation Association Region Members Responses Response rate ALTO International AAIEP N. America (US) ABLS Europe (UK) ASEPROCE Europe (Spain) ASILS Europe (Italy) BELTA South America (Brazil) EduSA Africa (S. Africa) FELTOM Europe (Malta) IALC International Languages Canada N. America (Canada) NYESA N. America (USA) UED Europe/Asia (Turkey) UNOSEL Europe (France) Total

14 Many of the questions were aimed at either agents or schools because of the inherent differences between the two types of organisations. Distinctions are made in the language travel industry between senders and receivers, buyers and sellers, and agents and providers. However, for the sake of clarity, this report will refer to the two types of businesses as either agents or schools. Around 7 of 29 respondents are engaged in business both as a school and agency at the same time (compared with 3 in 28). Profile of Language Travel Organisations Geographic distribution The geographic distribution of survey respondents does not fully reflect the distribution of language travel providers, with Europe being over-represented and Australasia being heavily under-represented. Compared with 28, there was a decrease in representation from Europe, and an even larger decrease in representation from Australasia. Location by world region Region Frequency Percent Africa 11 4 Asia 22 8 Australasia 11 4 Europe North America South America 23 8 Total Association membership As noted above, survey respondents were approached through specific language travel associations, but were often members of other associations as well. Because the primary survey population consists of ALTO members, this is, not surprisingly, the best represented association, closely followed by WYSE Travel Confederation, of which ALTO is a sector association. Among those associations who greatly increased their representation in the 29 survey were: IALC: International Association of Language Centres Languages Canada BETA: British Educational Travel Association BELTA: Brazilian Educational & Language Travel Association 12

15 Association membership (number of responding organisations) NAFSA: Association of International Educators 41 ABLS: Association of British Language Schools 23 IALC: International Association of Language Centres 19 Languages Canada 16 BETA: British Educational Travel Association 15 BELTA: Brazilian Educational & Language Travel 14 ASEPROCE: Asociación Española de Promotores de Cursos en el Extranjeros 9 Quality English 9 ASILS: Associazione Scuole di Italiano come Lingua Seconda 8 ELTASA: English Language Travel Association of South Africa 7 English UK 7 UED: Association of International Educational Counsellors 7 CIEL: Council of International Education and Language Travel, Japan 6 FELTOM: Federation of English Language Teaching Organisations Malta 6 UCIEP (University Consortium of Intensive English Programs) 6 TANDEM International e.v. 5 English New Zealand 4 MEI ~ RELSA: Marketing English in Ireland - Recognised English Language Schools Association 4 English Australia 2 Language Travel Japan 1 JAOS: Japan Association of Overseas Studies 1 KOSA: Korean Overseas Study Association 1 New York English Schools Association 1 UNOSEL: Union Nationale de Organisations de Séjours Linguistiques et des Ecoles de Langues 1 Other 4 Organisation type The vast majority of the responding organisations were language schools (6). A quarter of the sample consisted of agents and the remaining 15 of associations and suppliers. The distribution of respondents by activity is not that much different from the 28 sample, which had 68 language schools and 25 agents. Organisation type Type Number School Agent Agent and School 2 7 Association 12 4 Supplier 9 3 Total

16 The language school respondents were usually individual schools (75), but around a third operate more than one school. In total, the number of language schools covered by the survey is 663. This is a vast increase compared with both the 27 survey (116 schools) and the 28 survey (239 schools). This increased coverage undoubtedly gives better representation of the total market, but it makes it more difficult to make year-on-year comparisons. In general, the increase in the number of respondents has led to a larger number of smaller operators providing data, which tends to decrease the average number of students handled per school. Size of Business The schools participating in the survey had a total of more than 244, students enrolled in 28, a decline compared with 27 (33,). This fall may be partly explained by the presence of smaller schools in the survey, but it may also reflect a decline in the overall market, as indicated by recent Youth Travel Industry Monitors conducted by WYSE Travel Confederation. The reporting schools had an average of just under 5 students in 28, which continues a long-term trend of declining average size of operation (this may, however, also relate to the inclusion of greater numbers of schools in the surveys). The agents reported a total of over 141, outbound students, a significant increase compared with 27 (77,). However, this growth is largely due to the larger number of agents responding to the survey in 29 compared with 28. The number of students sent per agent actually declined in 28, following many years of sustained growth. The average number of students sent per agent in 28 was 218, compared with over 25 in 27. There were significant variations in the numbers of students per school by region. In general, schools in South America and Europe tend to be significantly smaller than elsewhere. The fact that the large number of schools surveyed in Europe also tend to have relatively small numbers of students compared with other regions also tends to reduce the global average number of students per school. However, caution needs to be exercised in interpreting these results because of the small numbers of schools responding in some other regions. Average number of students per school in 28 (weighted by region) Region Average number of students Africa 562 Asia 13 Australasia 2183 Europe 43 North America 617 South America 256 Average number of students per school 475 For agents, there were also very large variations in numbers of students sent, although the small number of agents in some regions also makes direct comparisons difficult. In general, European organisations continue to send much larger numbers of students on average (almost 3, per agent). In contrast, agents based in South America (11) and Asia (46) tend to send much lower numbers. 14

17 Staff Language travel organisations tend to be fairly small, with about half the 29 respondents having between 1 and 1 full-time staff. The proportion of smaller organisations is also significantly higher than in the 28 survey, when about 35 of respondents had between 1 and 1 full-time staff. Full-time staff employed per organisation Agents School Over 1 One of the reasons for the increased number of smaller organisations in the survey is the extension of the survey to include non-alto member organisations. In general, these organisations tend to be smaller, and this is particularly noticeable for language schools. Only 39 of ALTO member schools have 1-1 employees, compared with 46 of schools as a whole, and 2 of ALTO member schools have over 5 employees, compared with 11 of schools overall. Full-time staff employed per organisation, ALTO members only Agents School Over 1 15

18 In general, the European organisations responding to the survey in 29 tended to be smaller than their North American counterparts. Full-time staff employed by region Europe North America Over 1 Turnover As information on financial performance tends to be sensitive, respondents in the Global Directions survey are not asked about the volume of turnover, but rather the share of turnover contributed by language travel products. Percentage turnover derived from language travel products, 27 and 28 (schools and agents) turnover Schools Agents On average, around 59 of total turnover came from language travel products and services in 28. This finding represents a significant fall compared with 27, when around 7 of turnover was related to language travel. Because no figures are available on absolute turnover, it is difficult to assess the extent to which this drop is related to an increase in turnover from other products, or a fall in the volume of language travel business. Schools consistently generate more of their turnover from language travel products than agents, although the gap narrowed in 28. Some significant variations in turnover sources by region emerged in 28, with organisations in Australasia and Europe in particular recording significantly higher turnover contributions from language travel. 16

19 Percentage turnover derived from language travel products by region, 28 turnover Africa Asia Australasia Europe North America South America Forecasted Growth Rates Language travel providers were asked to forecast the growth rates that they expected from their own business, and in the language travel market as a whole over the next three years. Not surprisingly, the weaker economic climate and decline in global tourism as a whole has caused respondents to revise their forecasts downwards compared with the 28 Global Directions report. In the 28 report, the expected growth rate for the industry as a whole in 29 was still 11. The current expectations for the 29 trading year are a decline of just over 2 compared with 28. Respondents remain confident of long-term growth, however, expecting the language travel industry to grow by 8 in 21 and by almost 12 in 211. These expectations are slightly lower than in the 28 edition of Global Directions, but reflect confidence in resumed market growth in 21. Respondents were also more optimistic about their own business prospects over the next three years. The majority of organisations expected some modest growth in 29, and growth of an average 12 in 21 and 14 in 211. These forecast growth rates remain significantly higher than the travel industry as a whole. The UNWTO, for example, has forecast that international tourism will decline by between -6 and -4 in 29. Forecast change in own business vs the industry, change Own business Language travel industry 17

20 In general terms, agents are more positive about their own business prospects over the next three years than schools. Agents expect to end 29 with a growth of around 6, compared with only 2 growth for schools. Interestingly, those organisations which are both agents and schools are the most pessimistic, expecting a significant decline in their business in 29. Forecast change in own business, agents and schools change Agents Agents and schools Schools Language schools are also significantly more pessimistic about the total language travel industry growth over the next three years than agents. Schools expect a decline of 5 on average in 29, compared with a growth of 5 for agents. Forecast change in language travel industry business, agents and schools change Agents Agents and schools Schools 18

21 Forecast growth by region Looking at different global regions, the highest language travel growth rates are expected by respondents based in Asia, South America, and Africa. European-based respondents were particularly likely to expect low growth rates, with a decline of almost 8 in 29 and a slower recovery in 21 and 211. Forecast change in language travel industry business by region, change Africa Asia Australasia Europe North America South America Market share Language travel organisations were asked to give information on their local market share. In the 28 study, the average market share was reported as 19 for schools and 11 for agents. These proportions increased substantially in 29, to reach 26 for schools, and 22 for agents. Because of changes in the sample between the two years, it is difficult to judge the significance of these changes; however, the overall increase might be related to shrinking local markets, giving the remaining operators a larger market share. Average market share for agents and schools, 28 and Schools Agents A comparison of the market share claimed by respondents indicates that they tend to consistently overestimate their share. For the United States, for example, 16 responding schools estimated their combined market share to be almost 1 of the local market. As in previous years, smaller countries tended to be more accurate, with the estimate by Maltese schools that they have almost 4 of the local market being fairly accurate. 19

22 Student Profile Age group There was relatively little change in the age distribution of enrolments at language schools in 28. The age group remained the largest single segment, and the vast majority of students continue to be ages 21 and over. Age profile of language school students, 27 and Under For agents, there were also relatively minor shifts in the age profile between enrolments in 27 and 28. The age group is also the largest single segment, although the average age profile for agents continues to be slightly younger than for schools. Agents report sending a larger proportion of students under the age of 21 (52) than schools report as being enrolled in 28 (38). Age profile for outbound students, 27 and Under

23 As in 27, the 28 age profile shows some significant regional differences. In particular, schools in North America tend to enrol students between 18 and 24, whereas schools in Europe are likely to enrol a higher proportion of both younger and older students. Age profile for schools in Europe and North America, Under Europe North America Duration of study The average study duration in 28 was just under five weeks for inbound students virtually unchanged from the 27 figures. The longest average course duration tended to be found in Australasia, Africa, and North America. In contrast, Asia and South America reported average durations of around two weeks. Course length of inbound students by region, 28 Weeks Africa Asia Australasia Europe North America South America 21

24 Comparing 27 and 28, there was a growth in the shortest courses (under 2 weeks), and a fall in the proportion of courses of 2-4 weeks. This may indicate that students are opting for shorter courses to reduce costs. Average course duration reported by schools, 27 vs Under 2 weeks 2-4 weeks 1-3 months 4-6 months 7-12 months The average course duration reported by agents was longer than that reported by schools around 7 weeks in 28. This average was raised in particular by the relatively long course durations reported by agents based in Australasia and Europe, which have average course lengths of 1 weeks or more. In other regions, courses tend to be much shorter, with agents based in North America reporting averages of around two weeks. Average course duration for outbound students by region of origin, Weeks Africa Asia Australasia Europe North America South America 22

25 Popularity of course types For those respondents offering language travel products, the most frequently offered course type continued to be non-degree programmes, followed by college and university preparatory programmes. The proportion of schools offering most course types fell in 28 compared with 27, which may be related more to the smaller organisation size covered in the 28 survey, rather than a contraction in the range of courses offered. Popularity of course types offered Non-degree seeking programme College/university preparatory Undergraduate courses High school programmes Vocational training Postgraduate courses (other than MBA) MBA courses Schools based in North America were more likely than their European counterparts to offer college/university preparatory courses and non-degree programmes. European schools were more likely to offer high school programmes, catering mainly to inbound American students. Courses offered in Europe and North America Undergraduate courses Postgraduate courses MBA courses College/university preparatory High school programmes Vocational training Non-degree Europe North America 23

26 Student Mobility Source countries Germany continued to be the top ranking source country for language students in 29, following a dramatic rise in 28. South Korea climbed above Spain to take the second spot in 29. In contrast, Japan has continued to sink in the rankings, reaching only fourth place in 29, after having been the number one source country until 27. China and Saudi Arabia were the major new entrants in the top 1 in 29, taking fifth and sixth spot respectively. Italy, Switzerland, and the United States were all ranked lower in the top 1 source countries in 29. The United Kingdom dropped out of the top 1 altogether, only managing to reach 12 th spot in 29. This is perhaps a reflection of the devaluation of the UK Pound against most major currencies in 28. Ranking of major source countries, Rank Japan Japan Japan Germany Germany 2 Germany Spain South Korea Spain South Korea 3 United States Germany Spain South Korea Spain 4 Spain Brazil Brazil Italy Japan 5 Brazil Italy Switzerland United States China 6 France South Korea Germany Japan Saudi Arabia 7 Italy Switzerland Italy Switzerland Brazil 8 South Korea France United Kingdom Brazil Italy 9 Switzerland Mexico United States United Kingdom Switzerland 1 United Kingdom United States Mexico France United States In terms of the proportion of organisations listing each country among their top five source markets, Germany and South Korea were closely aligned at first and second place, respectively. Spain and Japan also vie closely for third and fourth place, with a significant gap with China in fifth place. Ranking of source countries by percentage of respondents mentioning, 29 Germany South Korea Spain Japan China Saudi Arabia Brazil Italy Switzerland United States

27 Destination countries For outbound students, the United Kingdom continued to maintain top ranking in terms of the number of organisations listing it among their top five. The United States, Canada, and Australia also held their positions as the top four ranked destinations. Malta made significant gains in 29, reaching its highest ever position at number five. This development to some extent contrasts with the latest statistics from Malta, which indicate a slight drop in inbound demand for 28, and a more noticeable drop in 29. However, the figures for Malta may reflect the very important role of agents in sending students, which is more significant than in most other destinations. Ireland improved on its 28 ranking, while Spain, France, and Germany all declined. Italy was ranked just outside the top ten destinations for the first time in 28. Italy s place in the top ten was taken by New Zealand, which returned for the first time since 26. Ranking of main destinations, Rank United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom 2 Spain Spain United States United States United States 3 France United States Spain Canada Canada 4 United States Canada Canada Australia Australia 5 Canada Australia Australia Spain Malta 6 Australia France France France Spain 7 Ireland Malta Malta Germany Ireland 8 Malta New Zealand Ireland Malta France 9 Italy Italy Germany Italy Germany 1 Germany Ireland Italy Ireland New Zealand In terms of the proportion of total respondents placing countries among their top five destinations, it is clear that the United Kingdom and the United States are far ahead of their closest rivals, Canada, Australia and Malta. Ranking of destination countries by percentage of respondents mentioning, 29 UK USA Canada Australia Malta Spain Ireland France Germany New Zealand

28 Future destinations Respondents were also asked to identify the destination that they saw as potentially having the most growth in inbound language travel in the next three years. The destinations most frequently mentioned were China, the United States, and the United Kingdom. This finding indicates that China is seen as a potential new growth area by a large proportion of respondents, and that the United States and the United Kingdom are expected to hold their current dominant positions in the inbound language travel market. Destinations expected to grow over the next three years China USA UK Russian Fed. Canada Australia Saudi Arabia Brazil Turkey South Africa Spain South Korea New Zealand Japan Italy Germany Marketing & Business Recruitment sources for schools The most frequent source of students for schools continues to be international agents, who were used by almost half the schools. However, there has been a gradual decline of the use of international agents by schools, down from around 6 of schools a few years ago. The Internet has perhaps eaten into the business of agents to some extent, although the proportion of bookings made via the web now seems to have stabilised at around a quarter of the total. Sources of recruitment for schools International agents Direct via Internet Other Walk-ins / Local bookings Domestic agents Recruitment events

29 As in 27, the use of international agents in 28 tended to be highest for the larger schools. In contrast, walk-ins were more common at smaller schools than at larger ones. Proportion of schools using agents by school size, 27 vs 28 School Size, by number of students Use of international agents, 27 Use of international agents, 28 Under to Total Recruitment source for agents For agents, referrals continue to be the single most important source of business in 28, although there was a decline in referrals compared with 27. Internet bookings also continued to decline, down from 31 of respondents in 26, to 23 in 27 (although this may reflect changes in the sample of agents compared with previous years). Sources of recruitment for agents Referrals Repeat customers Internet bookings Recruitment events Walk-ins Other Diversification of products and services Diversification through the addition of new products and services has been an important trend noted in previous editions of the Global Directions survey. In 29, the areas which were expected to become more popular with students were intensive language courses, exam preparation, and academic preparation. This development represents a shift in opinion compared with the 28 survey, when online courses were seen as the most likely to become more popular. Forecasted course growth in the next three years, in percentage Academic preparation courses Business language courses Exam preparation Intensive language programmes Long-term courses Online courses Less popular Same More popular

30 In terms of the products and services that are likely to become more popular in the language travel industry in the next three years, fewer areas were likely to be identified as having growth potential compared with the 28 responses. Work experience continued to be the most frequently cited as likely to become more popular, followed by career development, and volunteer programmes. Airline tickets and insurance products continue to be seen as having little potential for growth. It is also noticeable that the proportion of respondents identifying CALL (Computer Assisted Language Learning) as a growth area has consistently declined in recent years. Forecasted product growth in the next three years Work experience Career development courses Volunteer programmes Adventure activities High school programmes Cultural activities Vocational programmes Homestay programmes CALL Au pair programmes Airline tickets Insurance services Current and Future Challenges The global economic downturn has clearly had a significant impact on the travel industry, with the UNWTO reporting a year-on-year decline of 8 in international tourism for the period of January to April 29. The economy has obviously had an impact on language travel as well, and survey respondents were asked to indicate how they are responding to these challenging market conditions and what their most pressing concerns are for the future. Respondents were first asked if they had experienced a change in demand for their products/ services in the first quarter of 29, when compared with the first quarter of 28. The vast majority of respondents indicated that they had experienced a change in demand, and only 13 indicated they had seen no change in demand. About 62 of organisations reported a decline in demand, compared with just under a quarter reporting an increase in business. The overall decline in demand was an average of almost 6, slightly smaller than the decline in global tourism for the same period. All world regions except Australasia reported a decline in demand in the first quarter of 29. This finding reflects the relative optimism in the Australian market noted earlier in this report. For those areas experiencing decline, the fall was noticeably greater in Europe (-8), and more moderate in Asia and North America (-3). 28

31 Change in demand for language travel products and services by region, January-April Europe Africa South America Asia North America Australasia There was no significant difference in the decline reported by schools and agents. However, larger schools were more likely to report bigger declines in demand than smaller schools. Change in demand for language travel products and services by school size, January-April 29 change Under Over 3 School size 29

32 When asked about what measures they were taking in order to meet the current challenges, language travel organisations were most likely to be seeking new partnerships and opportunities, diversifying their products and services and investing more in marketing. Relatively few indicated they were cutting prices, reducing marketing, or eliminating products and services. This relatively proactive stance to the current climate reflects the attitudes prevailing in other sectors of the youth travel industry, as indicated by the WYSE Travel Confederation Industry Barometer. Steps taken to address challenges in current market conditions Looking for new partnerships & opportunities Diversification / innovation Increased marketing Improving quality Cutting prices Cutting back on marketing Eliminating products and services None of these The most pressing concerns for language travel organisations regarding the current market conditions are the general economic uncertainty and the poor overall economic situation. Visa issues remain a recurring concern for many language travel providers. Most pressing concerns regarding current market conditions General economic uncertainty Poor economic situation Visa issues Exchange rates Controlling costs Increased competition Unemployment Availability of placements Availability of credit

33 There were some significant regional variations in the concerns expressed by language travel providers. In South America, for example, respondents were much more likely to be affected by availability of credit, and South American and Asian respondents were also most likely to mention availability of placements as an issue. Interestingly, the need to control costs was also most likely to be an issue for South American respondents, whereas Asian respondents do not seem to be facing the same kind of challenges in this area. Most pressing concern by region - need to control costs Africa Asia Europe North America South America 31

34 Acknowledgements ALTO would like to thank the following individuals and organisations for their input and contributions: ALTO Members: Academic Adventures in America Accademia Europea di Firenze ACCESS International English Language Centre Ardmore Group, The Association of International Education Counselors Turkey (UED) Associazione Lingue e Culture Europee Australian Council for Private Education & Training Berlitz Language Center Berlitz Languages, Inc. Blueberry Språkresebyrå AB Brazilian Educational & Language Travel Association Bridge Linguatec, Inc. Britannia Learning & Leisure Ltd (Kingswood) Cactus Worldwide Ltd CAMPS International Canadian International Student Services carpe diem / TravelWorks Central de Intercâmbio Viagens Ltda Central Internacional do Estudante Centre for English Teaching (CET) - University of Sydney Centre of English Studies Centro de Lenguas e Intercambio Cultural Centro Internazionale Chamber College China Greenland Travel & Culture Co. Ltd Clubclass Ltd COINED International Colegio Maravillas Computer Professional Learning Center (CPLC) Cork English College Cork Language Centre International Cosmo Educación Council of International Education & Language Travel Cultural Homestay in Europe Ltd Cultural Homestay International DI.L.IT International House did deutsch-institut Disney Youth Group Programs Domar Travel Education Don Quijote - Enforex Spanish in the Spanish World Dorset College Dr Steinfels Sprachreisen GmbH Dublin School of English EC Group ECELA EDM Education (LONDONUHAK) EducaCentre Russian St. Petersburg Tours EF International Language Schools Ekaterinburg Center Education Abroad ELS Language Centers Embassy CES Emerald Cultural Institute 32

35 English Australia English Language & Travel Association of South Africa English UK ESL - Ecole Suisse de Langues Estudio Sampere Eurocentres Euroculture Ltd (ICS) European School of English Euro-Schulen-Organisation Experimento de Convivência Internacional do Brasil FBItaly FDSV Federal Vacation Co. Foreign Study Travel Service Global Village English Centres GLS Sprachenzentrum Good Hope Studies High Schools International Home Language International Hong Kong Student Travel Ltd Horizonte Horner School of English Ltd, The I.M.A.C. Instituto Mexico Americano de Cultura iae Edu Net, Eduhouse Inc. ICEF ILSONLINE Circolo di Cultura Italiana INFORT Instituto para la Formacion Institut Parisien Institute of English Language Studies International Association of Language Centres International Centre Education & Business International House Berlin PROLOG International House Xi an International Language Academy of Canada International Language Schools of Canada International Quest Interway S.A. Intrax Cultural Exchange Irish Education Partners Ltd ISIS Education & Travel Group Italian in Italy ittti Vancouver Jenny Braden Holidays Ltd Joint Stock Company Spectrum Travel Juventud Y Cultura Kaplan Aspect Karavan Travel & Trade King George International College Kings Group Kingsbrook Language Services La Ligue de L enseignement LAL Group Language Courses Abroad/Spanish Study Holidays Language Network LTD Language School Worldwide S.L. Languages Canada Association Linguatime School of English Linguaviva Educational Group Link School of English 33

36 LSC Language Studies Canada Magister Mandarin House Martin Peters Sprachentraining GmbH MM Oxford Study Services Montreal YMCA International Language School Mundo Joven Travel Shop National Student Travel Foundation New LSF New York Language Center New Zealand Management Academies Ltd. Office National de Garantie des Sejours et Stages Linguistiques Omnicom School of Languages Open World Education Ltd Pacific Language Institute, Inc. (PLI) PractiGo GmbH Project International Rennert Bilingual Scuola Leonardo da Vinci Scuola Lorenzo De Medici 2 Sehdev Travel & Educational Services Séjours Internationaux Linguistiques et Culturels Shanghai CIIC International Business Development Co. SHE Travelling Consultants - Spanish Heritage Soléxico Language and Cultural Centers Spanish Abroad, Inc. Sprachcaffe - Languages Plus Sprachdirekt GmbH Spring International Language Center STA Travel Group STAR Travel STS Student Travel Schools Student Agency Ltd Student Travel Bureau Study Group International StudyGlobal StudyTravel BV Sydney English Language Centre Tamwood International College Ltd TANDEM International e.v. Thai International Education Consultants Association The Language Academy, Inc. Travel Active UAB Idiomes Barcelona Uhak.com UNSW Global Pty Limited Vancouver English Centre VIAJES COLON Viajes Sanabria SA / Linguatur Vienna Group T/A Umi Hotels Ltd & Access Apartments Village Camps SA Wish International, Inc. World Education Program World Study Brazil YA Language School 34

37 The following national associations who participated in the survey: AAIEP; ABLS; ASEPROCE; ASILS; BELTA; EduSA; FELTOM; IALC; Languages Canada; NYESA; UED; and UNOSEL ALTO Executive Board: Chair Treasurer Board Member Board Member Mr Mauro Biondi, Emerald Cultural Institute, Ireland Ms Santuza Bicalho, STB Brazil, Brazil Mr Jose Antonio Flores, Prime Education Group, UK Ms Lourdes Rebora, Mundo Joven, Mexico WYSE Travel Confederation team, with special thanks to: David Jones, Director General; Jane Mack, Graphic Designer; Kim Folliott, Association Administrator; and Stephanie Manning, ALTO Association Manager and project manager for this report Previous editions of Global Directions in Language Travel are available online: Sources CAPLS Canada (27) Student Profile Survey: English Australia (26) Survey of Major Regional Markets for ELICOS Institutions: &Lev1=stats&Lev2=env26 English UK (29) Students and the New Points-Based Entry Clearance System. Tier 4 Statement of Intent and Policy Guidance. members/students_and_pbs_3march.pdf Indecon International Economic Consultants (27) International competitor analysis and benchmarking for the EFL sector in Ireland: Report-on-EFL-Sector--November-277 Institute of International Education (27) Open Doors Report: Prince, S. and Thompson, J.W. (25) International Education: Facing the Future The 5th Washington International Education Conference Secretaría General de Turismo, Spain (24) El turismo idiomático en España. Madrid. SECTUR (27) Informe de Actualizacion: Oferta de Turismo Idiomatico en La Argentina. Statistics New Zealand (28) Survey of English Language Providers. Verbik, L. and Lasanowski, V. (27) International Student Mobility: Patterns and Trends. London: The Observatory on borderless higher education. 35

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40 Keizersgracht DW Amsterdam The Netherlands T: F: E: [email protected] ALTO is a founding sector association of WYSE TRAVEL CONFEDERATION