Cash-cow days for language schools are over
As the demand for private foreign-language instruction has dimmed over the past few years, school owners are competing harder for students and turning to corporate customers for steadier sources of income.
While the demand for foreign-language instruction made it relatively easy to set up a school in the early 1990s, the total number of students in language schools hasn't changed over the past two years, said Tomasz Nitka, co-owner of Warsaw-based Bakalarz language school.
The reason for this, he said, is the economy. Many pockets are empty, industry representatives said. Customers are simply not willing to spend as much as they used to on courses, agreed Krzysztof Zaluska, marketing specialist at Felberg British & American English School. Moreover, he said, many people have already learned their desired language. Lang LTC's head of customer service, Jana Zamiecka, said that generally students are at a higher level. "Now the courses are more specialized," she said, adding that general English classes are being replaced by banking or finance courses.
In addition, Zamiecka said that corporate clients are far more demanding than they used to be. "(Language courses) used to be just a bonus for employees," she said. "Now companies are checking what grades their employees receive and whether they attend classes."
The result is that in the face of competition, language schools are also finding it necessary to invest more heavily in the quality of their facilities and services. Zaluska said that while a couple of years ago Felberg held most of its classes in rented schoolrooms, it now conducts lessons in its own, well-equipped classrooms. The increasing competition among schools has also meant more spending on advertising, he said, adding that his company's ad budget had doubled in recent years.
To make ends meet language schools are increasingly turning to corporate customers, which are far more profitable than general-language clients. "Profits are bigger because companies that pay for courses do so on a larger scale," Zaluska said. Twenty percent of Felberg's are corporate, while two years ago that figure was five-10%. This change is common throughout the industry, he said.
Additionally, the focus on corporate courses has helped to plug the gap left by individuals who are no longer signing up in droves for regular classes. "Increasing numbers of companies are interested in training their employees in foreign languages and they're spending increasing amounts of money on it," said UEC BELL's Patrycja Piecuch, who coordinates lessons for the school. "Foreign languages are an element of a training package that increases employee qualifications," Zamiecka added.
However, companies are beginning to cut their training budgets in the face of slowing economic growth. "Training is one of the first areas where they cut costs," Zamiecka said. Although all company representatives interviewed for this article acknowledged an increased number of students, Zamiecka asserted that language schools still need to look for new solutions. "We're putting an emphasis on specialized courses," she said.
