Language Travel Industry Barometer: today's data & tomorrow's forecast GAELA / FELCA meeting – 4 September 2009

Background Surveys sent to associations on 1 July Associations asked to send to their members Response deadline of 24 July GAELA responses – 271 FELCA responses – 101 Individual reports circulated to each association for their own reference & analysis Broad analysis undertaken based on location of college/agent

language college responses GAELA analysis language college responses

Responding colleges Good response from most countries.

Question 1 Over the first 6 months of 2009, has the number of international students commencing a language course with your institution grown or declined?

Question 1 Balance of responses. Interestingly – relatively low responses for the two extremes. Was there a difference in the level of growth/decline by country?

Question 1

Question 1 The most common response by country: grown a lot grown none grown Australia, New Zealand, UK, Canada (=) remained stable International, South Africa, Canada (=) declined Ireland, USA declined a lot Malta

Question 2 Do you feel positive or negative regarding the prospects for the language travel industry over the next 6 months?

Question 2 Spread between positive and negative with “neutral” the most common response. Interestingly – relatively low responses for the two extremes. Was there a difference in the level of optimism by country?

Question 2

Question 2 The most common response by country: very positive positive none positive Australia, New Zealand, South Africa, USA neutral UK, International negative Canada, Ireland, Malta very negative Interesting that it is the “long haul” destinations that are the most optimistic – it might have been anticipated that the opposite would be the case. Was there a correlation between these two questions? Generally yes – if countries had experienced growth over the first 6 months of 2009 then generally they were more optimistic. An anomaly was that the most common response for Canada was negative, when in fact, their most common response to the previous question had been growth or remained stable. Also, USA numbers declined, however they were optimistic.

Question 2 Some of the reasons: positive negative GFC driving increased demand, currency exchange rates good, forward enrolments strong, specific institution strategies negative GFC, currency exchange rates bad, swine flu, increased competition, negative media, visa issues, fewer employment opportunities for students

Question 3 What were your top 3 source countries over the first 6 months of 2009?

What were your top 3 source countries over the first 6 months of 2009? most references in top 3 1 South Korea 143 2 Saudi Arabia 95 3 China 80 4 Japan 66 5 Brazil 54 6 Spain 50 7 Germany 38 8 Italy 35 9 Switzerland 32 10 France 26 South Korea by a long way – a critical market for most destination countries. Saudi Arabia – a new market – large numbers due to KASP. China also very important. China and Saudi Arabia not represented by agent associations in the survey of FELCA members (also Switzerland and Germany).

Question 3 What were your top 3 source countries over the first 6 months of 2009? Australia = Korea (47) China (34) Saudi Arabia (17) New Zealand = Korea (22) Saudi Arabia (17) Japan (15) Canada = Korea (24) Saudi Arabia (18) China (15) USA = Saudi Arabia (33) Korea (30) China (22) UK = Spain (8) Saudi Arabia (7) Germany (7) Ireland = Spain (29) Brazil (18) Italy (16) Malta = Germany (9) France (5) Italy (5) South Africa = Brazil (7) Angola (4) Korea (4)

Question 4 Which three source countries grew the most over the first 6 months of 2009?

Which three source countries grew the most over the first 6 months of 2009? most references in top 3 1 Saudi Arabia 86 2 China 67 3 Brazil 45 4 South Korea 34 5 Vietnam 33 6 Spain 29 7 Thailand 8 Japan 28 9 Italy 24 10 Switzerland Saudi Arabia and China seem to be driving growth.

Question 4 Which three source countries grew the most over the first 6 months of 2009? Australia = China (30) Vietnam (25) Saudi Arabia (19) New Zealand = Saudi Arabia (17) Thailand (8) China (7) Canada = Saudi Arabia (24) Brazil (8) Korea (7) USA = China (21) Saudi Arabia (17) Taiwan (10) UK = Saudi Arabia (6) Italy (5) France (4) Ireland = Spain (12) Italy (9) France (7) Malta = Italy (4) France (3) Spain (2) South Africa = Brazil (4) Saudi Arabia (3) Angola (2)

Question 5 Which three source countries declined the most over the first 6 months of 2009?

Which three source countries declined the most over the first 6 months of 2009? most references in top 3 1 Japan 115 2 South Korea 113 3 Taiwan 48 4 China 30 5 Germany 6 Brazil 28 7 Italy 26 8 France 25 9 Spain 10 Mexico 21 Japan & Korea showing the largest spread of colleges experiencing declining numbers with over 100 colleges referencing each of them. The countries in bold also appeared in the top ten list for growth.

# of colleges experiencing decline # of colleges experiencing growth growth vs decline # of colleges experiencing decline # of colleges experiencing growth Japan 115 28 South Korea 113 34 China 30 67 Brazil 45 Italy 26 24 Spain 25 29

Question 5 Which three source countries declined the most over the first 6 months of 2009? Australia = Japan (38) Korea (27) Taiwan (17) New Zealand = Japan (13) Korea (9) Taiwan (8) Canada = Japan (22) Korea (17) Mexico (14) USA = Korea (25) Japan (21) Taiwan (17) UK = Korea (5) Germany (4) Japan (4) Ireland = Korea (22) Italy (12) Spain (12) Malta = Germany (5) Italy (5) Korea (4) South Africa = Germany (6) Korea (3) Switzerland (3)

Question 6 What are the top 2 challenges currently confronting your institution?

What are the top 2 challenges currently confronting your institution? great diversity in the responses countries/colleges experiencing declining numbers focused on the causes for the decline as the challenges they need to overcome countries/colleges experiencing increasing numbers focused on the implications of the growth for their operations as their challenges many comments also related to the challenge of reducing their vulnerability by diversifying their markets in response to specific declines in traditional markets like Japan & Korea.

What are the top 2 challenges currently confronting your institution? countries/colleges experiencing declining numbers focused on the causes for the decline as the challenges they need to overcome GFC visa regime creating barriers swine flu lack of diversity / dependence on certain markets that are now in decline currency fluctuations negativity / lack of confidence in the market lack of / incompetent government marketing support These issues are listed in order of importance – by the number of respondents referring to them

What are the top 2 challenges currently confronting your institution? countries/colleges experiencing declining numbers also listed some of the implications of declining numbers as the challenges they need to overcome coping with decreasing budgets maintaining quality cashflow issues maintaining staff confidence / morale These issues are listed in order of importance – by the number of respondents referring to them

What are the top 2 challenges currently confronting your institution? countries/colleges experiencing increasing numbers focused on the implications of the growth for their operations lack of space /need to expand physical premises sourcing good teachers and other staff sourcing quality homestay families and other accommodation options maintaining quality overdependence on certain markets

What are the top 2 challenges currently confronting your institution? other challenges increased costs – government levies, wages, compliance etc. discounting by competitors / requests for discounts from agents “visa factories” - unregulated, cheap competition identifying creative marketing strategies (including the internet) increased activity from competitor countries and competitor colleges responding to negative image/reputation promoted by the media increased demands relating to regulation/compliance coping with new client groups

Question 7 What can your Association do to support you in the current environment?

What can your Association do to support you in the current environment? Marketing Advocacy Information / communication Quality PR

What can your Association do to support you in the current environment? Marketing marketing support and information re student numbers, trends & opportunities; raising and maintaining the profile of member colleges as “the quality option”; encouraging agents and students to choose association member colleges; developing & maintaining a quality brand for the association & its members; facilitate the development of business relationships with agents.

What can your Association do to support you in the current environment? Advocacy lobbying to achieve a supportive/effective visa regime; lobbying on other issues related to our competitiveness eg. work rights for students; lobbying for consistent standards across all colleges - compulsory accreditation; lobbying to minimise compliance costs; working with government to create a strong country brand.

Information / communication What can your Association do to support you in the current environment? Information / communication keep us informed of developments that could impact on our business; facilitate networking with colleagues to share solutions to issues; collect and share data to allow us to benchmark our performance; ensure you keep in touch with what your members want/need.

What can your Association do to support you in the current environment? Quality maintain and promote quality standards; facilitate the sharing of best practice; provide professional development. PR promote the importance and quality of the language travel industry domestically; present a positive image of the language travel industry.

FELCA analysis agent responses

Responding agents Sample size was small for some countries so the responses should not be taken to indicate broad trends, however Spain and Thailand (and Brazil to some degree) have useful response rates.

Question 1 Over the first 6 months of 2009, has the number of international students you have sent overseas for a language course grown or declined?

Question 1 Relatively low responses for the two extremes. Was there a difference in the level of growth/decline by country?

Question 1

Question 1 The most common response by country: grown a lot grown none grown Italy, France (=), Turkey (=) remained stable Spain, Thailand, Vietnam, Turkey (=) declined Brazil, Japan, Russia, Korea, France (=), Turkey (=) declined a lot Mauritius

Question 2 Do you feel positive or negative regarding the prospects for the language travel industry over the next 6 months?

Question 2 Spread between positive and neutral with “positive” the most common response. Interestingly – relatively low responses for the two extremes. Was there a difference in the level of optimism by country?

Question 2

Question 2 The most common response by country: very positive positive none positive Brazil, Russia, France (=), Italy (=), Mauritius (=), Thailand (=), Vietnam (=) neutral Japan, Spain, Turkey, Italy (=), Mauritius (=), Thailand (=), Vietnam (=) negative Korea, France (=), Mauritius (=) very negative Was there a correlation between these two questions? Not really – the level of optimism was generally good even if countries had experienced a decline in the number of students they were sending overseas – except for Korea.

Question 3 What were your top 3 destination countries over the first 6 months of 2009?

What were your top 3 destination countries over the first 6 months of 2009? most references in top 3 1 UK 73 2 USA 66 3 Canada 39 4 Australia 34 5 Ireland 31 UK & USA Then Canada, Australia and Ireland This ranking reflects the overall proportional distribution of market share as demonstrated by the LTM analysis of student numbers over the last few years.

Question 3 What were your top 3 destination countries over the first 6 months of 2009? Spain = UK (23) Ireland (16) USA (14) Thailand = Australia (17) UK (16) USA (14) Brazil = Canada (13) USA (8) UK (7) Japan = USA (10) Canada (6) Australia (5)

Question 4 Which countries are seeing increasing demand from students over the first 6 months of 2009?

Which countries are seeing increasing demand from students over the first 6 months of 2009? most references in top 3 1 UK 47 2 USA 30 3 Canada 21 4 Australia 18 5 New Zealand 7 The only difference in comparison with the previous table relating to the top three is that New Zealand has replaced Ireland in the 5th place. A number of agents mentioned currency exchange rates as a key driver behind the growth in demand for the UK.

Question 4 Which countries are seeing increasing demand from students over the first 6 months of 2009? Spain = UK (18) USA (8) Canada (4) Thailand = UK (11) Australia (7) USA (4) Brazil = Canada (8) UK (4) Australia (4) Japan = USA (5) UK (3) Canada (2)

Question 5 Which countries are seeing decreasing demand from students over the first 6 months of 2009?

Which countries are seeing decreasing demand from students over the first 6 months of 2009? most references in top 3 1 Ireland 25 2 USA 20 3 Australia 16 4 UK 13 5 New Zealand 8 Ireland is showing the largest spread of agents with decreasing demand. The countries in bold also appeared in the top ten list for increased demand (see next slide).

increased vs decreased demand # of agents experiencing decreased demand # of agents experiencing increased demand Ireland 25 3 USA 20 30 Australia 16 18 UK 13 47 New Zealand 8 7

Question 5 Which countries are seeing decreasing demand from students over the first 6 months of 2009? Spain = Ireland (15) Malta (5) USA (4) Thailand = USA (6) Australia (5) NZ (5) Brazil = Ireland (4) UK (4) USA (3) Japan = Australia (5) NZ (3) UK (2)

Question 6 What are the top 2 challenges currently confronting your organisation?

What are the top 2 challenges currently confronting your organisation? Business Levels maintaining business levels/flow of students [issues associated with GFC, swine flu, increased competition, currency exchange rates, visas] Financial financial issues/cashflow/running efficient operations/controlling costs (as a result of above) Operational coping with changes to visa requirements finding good staff

What are the top 2 challenges currently confronting your organisation? Strategic Planning / Marketing diversifying services to provide other sources of revenue/offering more destinations; adjusting marketing strategy & services to match changes in demand; finding new partner colleges; differentiating ourselves from other, low quality agencies that discount; establishing a strong internet presence; marketing on a reduced budget/high promotional costs; sourcing good quality accommodation for students/providing quality services.

Question 7 What can your Association do to support you in the current environment?

What can your Association do to support you in the current environment? Promotion Information / communication Professionalism Advocacy

What can your Association do to support you in the current environment? Promotion indirect - promoting study abroad more generally amongst the general public/general PR & key messages in the media; direct – promoting my agency to potential students/ coordinated marketing strategies/advertising; promote the use of agents that are members of the association/promote the professionalism of agents; support with holding student fairs/coordination of such events to minimise costs; organising workshops/facilitating links with colleges facilitating fam trips.

Information / communication What can your Association do to support you in the current environment? Information / communication keep us updated on global developments that have an impact on our business; work closely with embassies, consulates and visa offices so that we can get the most updated information; communicate news/information about our country to colleges/stakeholders.

What can your Association do to support you in the current environment? Professionalism professional development/training; establish standards for members and monitor and promote them; networking opportunities with colleagues; have a strong relationship with other associations to learn from each other and share experiences.

What can your Association do to support you in the current environment? Advocacy improve the empowerment of the industry/raise the professional profile of the industry with government; cooperate with college associations to influence policies eg. visa policy; work to influence the policy of airlines; cooperate with college associations to promote the use of agents; lobby government to provide funding support for study abroad.

useful information / data obtained Where to next? useful information / data obtained for each association specific to their membership for FELCA and GAELA for the industry more broadly do we want to do this kind of survey again?