The impact of the world’s oil and gas slump on international schools in several countries will be most telling as the schools open their doors this new academic year.
Some schools were affected during the last academic year, with a number of expatriate families immediately redeployed or made redundant. This year, many more schools will see an impact as a significant number of additional families employed by the oil and gas industry do not return to expatriate postings after the long summer holidays.
The International School Consultancy (ISC Research), which tracks data and intelligence on the world’s K-12 English-medium international schools market, predicts that international schools in Malaysia, Singapore and the Middle East will be hardest hit. “The schools most affected are those that largely enrol expatriate rather than local children, and those that have a high percentage of enrolments from families working in the oil and gas sector,” says Richard Gaskell, Director for International Schools at ISC Research. “The feedback that we are receiving from many schools is that they have been able to fill these gaps through existing waiting lists, or they have stepped up their admission marketing, and some have cut back on their staffing for this new year,” he adds.
Premium international schools – those that charge the highest fees – are expected to be most affected. Some companies that may have previously contributed all or a large portion of the school fees for their expatriate families, are now pulling back on such benefits to save costs. This means that some families, who are now having to fund their own school fees, may have selected alternative, more affordable international schools if available. Where expatriates have been sent home, so enabling more local families to fill the international school places, the more affordable schools tend to be the preferred choice. “This could be good news for the middle tier international schools with good reputations, and most challenging for the premium schools,” says Richard.
International schools in Malaysia are currently taking a hit as a result of several oil companies cutting back on their expatriate workforce. Most premium schools in Kuala Lumpur have already been impacted by the slump in the market and the usual arrival of new expatriates working in the oil and gas sector will not be happening this year. Julia Love, Director of Admissions at the International School Kuala Lumpur says, “we are anticipating a lower enrolment for the 2016-2017 academic year because of the drop in oil prices and have accounted for that in our hiring of faculty. This is not a dire situation but we must be smart as we know that there will continue to be cuts in oil and gas companies. We are fortunate that a number of companies from other industries, mostly high tech, are moving groups of families to Kuala Lumpur and this will ensure that our enrolment is stable for the coming year.”
Some international schools in Singapore are also facing reduced enrolment this academic year as a direct result of the slump.
Indonesia which relies heavily on the oil and gas industry has, as yet, not experienced significant impact as extensive waiting lists at most of the international schools there have helped to redress the balance. Even the premium end of the market is buoyed by extensive local demand because of a government requirement that all schools are not-for-profit or foundations, keeping school fees affordable for more people.
In the Middle East, some of the premium international schools are preparing for a small percentage decrease in enrolment this year (1-2%), although others remain positive. Clive Pierrepont, Director of Communications at the Taaleem group of schools in the United Arab Emirates says, “the oil price has led to significant redundancies across industries associated with the oil and gas sector. However, the outflow of expatriates as a result of this has been balanced by an influx of people coming into the country to support initiatives related to Expo2020 and future finance, commerce, travel, tourism and leisure sector growth.” Needless to say, most international schools in the Middle East have been taking proactive steps to respond to the impact. “We have identified some cost cutting measures and have recently advertised for the first time,” says Deann Hays, Director of Finance at ACS Abu Dhabi. However, she adds: “Now that we have started the year, the enrolment has held steady and we still have waiting lists at most grade levels.”
ISC Research consultants will be collecting intelligence from the international schools throughout the year, as they do annually, and ISC Research will be reporting on the data analysis and market changes within its market reports as the 2016-2017 academic year unfolds.
The International School Consultancy (ISC Research) is the leading provider of data and intelligence on the world’s K-12 English-medium international schools market www.iscresearch.com