The English language teaching sector saw profits drop by 18.4 per cent last year, down to €8.2 million from €10.1 million in 2015, according to a report by audit firm Deloitte.
The drop is the result of the double whammy of declining volumes and increasing costs, with Deloitte’s financial advisory principal, David Bonnet, saying competition meant raising prices was not the obvious solution.
The Federation of English Language Teaching Organisations announced yesterday that Del-oitte would be carrying out an international competition analysis to better understand how its rivals were faring and how Malta could better position itself.
Feltom CEO Genevieve Abela pointed out that while Malta had seen its total student numbers grow by 1.6 per cent, Ireland had reported an increase of 11 per cent. Ireland conducted a study of its competitors in 2007 and made a number of changes as a result, the main one being a system whereby accredited schools were allowed to apply for visas on behalf of its students, backed up by a stringent vetting process.
“We need to understand under what circumstances a school in Malta could become ‘visa valid’,” Ms Abela said.
Ireland also allows certain categories of students to work a limited number of hours, which Feltom has been campaigning for.
Is this something that Malta could contemplate?
Malta Tourism Authority CEO Paul Bugeja said that, personally, he would have no objection to such initiatives, however at a national level, things were clearly more challenging.
“If it would support the industry, the MTA would support ‘visa valid schools’, but it would have to be thought through and all the pitfalls would have to be checked out. And with regard to work visas, then we would also need to look at minimum entry standards,” he said.
Long-stay students from non-traditional tourism markets – such as Turkey, Columbia, Brazil and Japan – account for 26 per cent of total student weeks, with Colombians staying 13.5 weeks on average, compared to the most prevalent students from Italy, who are here for just 1.8 weeks.
The number of weeks spent by non-EU/EEA students fell by 13.6 per cent, showing the need for action to reverse the trend, Mr Bonnet said.
“The important thing is that, in the past, ELT students were regarded as second-class tourists. Feltom has done much to raise the sector’s profile, and the MTA is doing its bit, organising joint missions overseas, adding ELT to the Star Awards categories, speeding up host family applications and so on,” Mr Bugeja said.
“Former ELT students tend to be our best ambassadors.”
Mr Bonnet, analysing the results, said that an important key figure was that the marketing spend had gone up by 12.7 per cent. “This shows that schools are fighting back. The opposite – cutting back on marketing – would have been very worrying, as that is a sign that schools are giving up,” he said.
Key figures
Length of stay: 20.9 days on average – three times longer than the average tourist.
English Language Teaching as tourism: 3.9 per cent of total tourists, 10.7 per cent of total nights and 8.1 per cent of total tourist expenditure.
Gross income for schools: €322.7 per student week.
Costs to schools: €286.85 per student week.
Gross operating profitability for schools: €35.86 per student week.