Company Profile

ABiC Presentation Nov 2010

1. Backpacker, Tourism and Education

Company Profile

The International sector is composed of 4 main parties:

1. The Institutions: English Schools, High Schools, VET colleges, TAFES & Unis2. Overseas education and travel agents who recruit for institutions from specific

source countries.3. Onshore education agents who service the needs of international students,

tourists and WHM seeking study options, migration advice and associated ser-vices such as homestay & accomm; orientation services like providing mobile phones, bank account set up, health cover , insurance, tours and travel etc.

4. The specialist service providers like homestay companies, airport pick up compa-nies, tour companies, hostels and backpacker accommodation etc.

Quick Facts:

5. Statistics vary but the industry was injecting up to A$18 billion per year directly and up to another $14 billion indirectly. (this has now dropped dramatically)

6. Approximately 630,000 ‘student visa’ holders on shore7. Estimates vary but anywhere up to a further 50,000 non-student visa holders

( WHM, tourist, spouse or dependent) take courses each year. Swiss, German and other European students make up many of these.

Backpackers, Tourism and Education: An Overview

Company Profile

1. Backpackers as Students

• In the 90’s there was a much stronger relationship between tourists, backpackers and education.

• Most colleges (especially English Colleges) had a significant number of students who were doing short term courses on tourist or WHM visas.

• Many colleges ran ‘special courses’ for this sector and aggressively marketed to it.• Local and overseas education agents saw this as a significant sector for

recruitment to colleges.• There was a strong relationship between tourism/backpacker providers and

colleges• In the “noughties”, new countries were added to the Working HP with a cohort of

backpackers, mainly from Europe, who were interested in a defined study period. • During the same time, significant markets like Japan and Korea saw the reverse,

with WH makers and tourists not looking to study or only for a short time at discount colleges.

• Markets like Switzerland were steady based on holiday makers doing 12 week academic courses before travelling. Mainly travelled as FITs.

Backpackers, Tourism and Education: The Past

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2009 International Student Data

AEI’s international student data for 2009 shows there were:

• 631,935 enrolments by full-fee paying international students in Australia on a student visa.  • This is an increase of 16.8 percent on 2008 enrolments and compares with growth of 20.2 per

cent between 2007 and 2008.  • In 2009 year-to-date enrolments exceeded 600,000 for the first time.• There were 365,605 commencements in 2009, an increase of 13.2 percent on 2008. This

compares with growth of 24.4 per cent between 2007 and 2008.

Enrolments by nationality.

• Enrolments grew by 90,791 between 2008 and 2009.  • All top 10 source countries by enrolment volume recorded increases between 2008 & 2009.  • Top 10 countries collectively accounted for 72.4% of all enrolments, and grew by 20.5%.

Note: The above Data only applies to Full Time Student visa enrolments. There is no way to accurately collect data on students studying on other visas like WHM or tourist but it is assumed they make up to 15% of the total ELICOS sector or 15,000 students per year.

Source: AEI Statistics http://www.aei.gov.au/AEI/Statistics/StudentEnrolmentAndVisaStatistics/2009/2009_Annual.htm

AEI 2009 Annual International Student Statistics

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Nationality Enrolments % of total Growth on 2008 China 154,777 24.5% 18.0% India 120,913 19.1% 25.4% Republic of Korea 35,708 5.7% 1.6% Thailand 26,460 4.2% 19.0% Nepal 24,579 3.9% 36.5% Vietnam 23,755 3.8% 49.9% Malaysia 23,103 3.7% 9.5% Indonesia 17,867 2.8% 11.8% Brazil 17,529 2.8% 10.3% Saudi Arabia 12,599 2.0% 61.8%

Other nationalities 174,645 27.6% 8.1%

All nationalities 631,935 100.0% 16.8%

Enrolments by Nationality.

AEI 2009 Annual International Student Statistics

Source: AEI Statistics http://www.aei.gov.au/AEI/Statistics/StudentEnrolmentAndVisaStatistics/2009/2009_Annual.htm

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Enrolments Commencements

Sector Number % of Total Growth on 2008 Number % of Total Growth on 2008

VET 232,475 36.8% 33.3% 132,303 36.2% 25.3%

Higher Education 203,324 32.2% 12.1% 89,435 24.5% 15.4%

ELICOS 135,141 21.4% 7.5% 103,993 28.4% 4.5%

Other 33,489 5.3% 7.2% 26,815 7.3% 2.5%

Schools 27,506 4.4% -2.9% 13,059 3.6% -8.7%

All sectors 631,935 100.0% 16.8% 365,605 100.0% 13.2%

International student enrolments and commencements by sector - 2009

AEI 2009 Annual International Student Statistics

Source: AEI Statistics http://www.aei.gov.au/AEI/Statistics/StudentEnrolmentAndVisaStatistics/2009/2009_Annual.htm

Company Profile

2. Students and Tourism

There has been a significant shift in the trends. Ten to 15 years ago:

• most colleges ran very strong ‘Activities Programmes’ that included local and regional tourism events.

• study tours from Japan, Korea, Indonesia and Thailand were common and they all had imbedded tour components.

• Student who came to Australia interested in a cultural experience• The A$ was much weaker, tuition fees comparatively lower and

therefore, student disposable income was higher.• The bulk of the students coming to Australia were not looking at

permanent residence and came here to gain language skills or further education as well as experience another lifestyle – including a strong cultural, social and tourist based experience

• Enrolments for non-student visas in ELICOS colleges were more common.

AEI 2009 Annual International Student Statistics

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What is the current relationship between International Education and Tourism?

1. Over the past 10 years there has been a significant shift in the market with regards the type of student coming to Australia, the reason they are coming and their priorities.

Major drivers of this have been:

• Economic issues – GFC, exchange rates, employment or unemployment issues.• Cyclical trends – Canada, US, UK at various times • Government initiatives – Australia was one of the early pioneers of aggressive

global marketing for international students. This has stopped and other competitor countries have taken up this role.

• Visa shift – Australia was seen as ‘student’ friendly’ country. We offered work entitlements to students and encouraged long term stays, visa extensions etc. UK/Ireland now have work entitlements. Are no longer seen as expensive, and are per-ceived as higher quality.

• PR driven student visas changed the type of student coming to Aus. Work and permanent residence were the focus.

• Change in student demographic with the huge shift to India and China (combined nearly 50% of total onshore students) being significant.

• The internet and social media vehicles (blogs, Facebook etc) mean that students will seek their own network connections for social activities.

• Independent travelers – do not use tour companies but prefer to FIT.

International Education and Tourism: The Present

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What is the current relationship between International Education and Tourism? Cont’d

2. How can tourism operators capture market share from international students?. The significant shift in:

• the focus and purpose of individual students, (PR, work and study)• the role of colleges in social activity organisation – many have reduced their

internal staff to manage this.• decline in annual study tours – aging population in key markets, strong dollar,

competitor countries have shrunk this market. Margins too low to make it worthwhile for schools.

• change in the demographic make up of the international student cohort.have created major challenges for tourism operators who seek to work with this sector. The possibilities lie in establishing:• closer ties with institutions by offering a complete outsource business that saves them

money, time and staff resources.• Working with associations such as English Australia, ACPET, TAFE Directors, University

Student Unions to coordinate with their members to set up combined trips that take students from any provider. Ads on their websites or newsletters to get info out.

• Direct links with overseas and onshore education agents to set up ‘service provision’ such as hostel accomm, airport pickups, orientation tours of major cities, social events such as student cruises, BBQs, wine trips etc. These would need to be commission based to incentivise.

• Educational ‘FAM trips’ that take potential students to visit institutions.• Tapping into the ‘family’ market – parents who come here to visit students, do undertake

tourism related activities.

International Education and Tourism

Company Profile

Where is International Education heading?

1. The Rudd/Gillard government have implemented policy changes that have drastically cut the flow of students to Australia. Current statistics are showing:

• Up to a 40% drop in year to date enrolments in ELICOS

• Even higher drops in the VET sector – both private and TAFE.

• Negative sentiments by key countries like China and India are seeing students looking to

the US and UK. ( the US has opened up its market for students)• This trend will continue into 2011 with the Uni and VET/TAFE sector starting to feel the

full impact of the feeder ELICOS students.

• The current government focus is on Post Graduate students (at the expense of ELICOS and VET students) – they tend not to use Tourism services.

• New potential markets are the US, UK and Canada for university and some VET cour-ses. They do tend to take advantage of the opportunity to be ‘tourists’ as well.

• Moves to increase ‘educational exchange’ or semester abroad programs with European and Nth American institutions also offer growth potential and opportunities for tourism.

International Education and Tourism: Looking ahead

Company Profile

Conclusion

1. This presentation is based on my experience over the past 20 years as both a College owner ( ELICOS and VET) and now as an education recruitment company owner.

2. While there has always been a link and cooperation between the Tourism and Backpacker sec-tor and overseas student education, the changes in source countries, visa regulations and global economic drivers have shifted the emphasis and lessened the crossover business.

3. Closer relationships with Institutions through their respective associations is important.4. Use of social media to tap into the generational drivers.5. Support of “ social and tourist websites” that are linked to major institutions and agent sights.6. Offering ‘inducements to overseas agents to ‘pre-book’ activities and service is vital7. Look to those markets that are here as tourists/backpackers but also want some educational

experience like English study or specialist short term VET course ( natural therapy and mas-sage, cooking, hospitality – barista and RSA courses etc)

8. Develop relationships/partnerships with the Travel Education agents in Europe to pre-sell packages.

International Education and Tourism: Looking ahead