Fine balance

Study reveals both optimism and caution in K-12 sector amid pandemic

In May 2020, Colliers International conducted a major market sentiment survey in the UAE. What do parents, school leaders and operators see in the future for one of the world’s most important international education hubs? Mansoor Ahmed reports.

Fundamental shift

K-12 education in the UAE, affected by the COVID-19 pandemic, has undergone a fundamental shift in the mode of delivery at schools from traditional face to face provision to online learning. Consequently, schools, teachers, students and parents have had to adjust to a new normal which has raised several issues around fee discounts, parents’ involvement and future of K-12 education.

A survey conducted in May with leading education providers has revealed a number of insights about the K-12 segment in the UAE.

Transition to online learning has been easier for school staff compared to parents. Nearly all the teaching/support staff found transition to online learning “Very easy” or were neutral about it, none of them terming it as “Difficult” or “Very Difficult”. Conversely, parents found the transition to online learning challenging with 35% of them indicating it to be “Difficult” or “Very Difficult”.

Platforms

UAE schools have used variety of platforms to continue learning amid pandemic. All respondents reported the availability of online learning platforms across all grades at their schools. Schools are using multiple tools such as Seesaw, Microsoft Meetings, Class Dojo, Google Classrooms and Google Hangouts for online instruction and delivery to pupils.

Investing to deliver

Financial investment to establish the infrastructure required to enable online learning has not been a major concern for the majority of schools, as more than two-thirds (69%) of the respondents said they were able to utilise existing tools. Nearly a third of respondents, however, (31%), indicated that they had to make significant financial investment to activate online learning platforms. Of these, a majority spent less than US$ 100,000, while a small minority spent in excess of US$ 1 million. Two schools reported their spend to range between US$ 3 to US$ 5 million.

Effect on fee collection

Increased parental involvement in the day to day academic activities of pupils coupled with financial stress due to job losses and salary cuts, has driven parents to demand reduction in school fees.

Consequently, more than half (58%) of the schools have made full or partial refunds for all pre-paid fees (non-tuition) for the current term, the remaining ones are adjusting the refunds against future term’s fees. Nearly one-third (38%) of the respondents indicated that they are offering fee discounts for current and remaining terms, while a little less than a quarter (23%) of the respondents have not offered any discounts to tuition fees.

Some schools (39%) have offered other relief measures such as support based installment / discounts / monthly payment option. While others, offered discounts for Term 3 to be adjusted against the next term (September 2020) fees. Some of the schools have created a “relief fund” to support parents impacted by COVID 19 crisis. A few others are offering discounts based on “a means tested bursary” for those who are most affected, asking for documentations to demonstrate that COVID 19 has impacted parents’ income adversely.

 

How do schools see the future?

There is optimism in expectation for the next academic year among school operators and owners. Most of them expect the K-12 sector to remain resilient amid the pandemic and recover in the upcoming academic year (2020-21). Over half (54%) of respondents expect to retain the same number of students or an increase of less than 10% in total enrolment in the next academic year. Further analysis reveals that it is mostly the affordable and mid-market schools that expect to retain existing and/ or enroll further students, indicating a shift from luxury /premium to mid-tier schools amid the challenging economic conditions.

Nearly two thirds (61%) do not plan to offer any further discounts to the tuition fees in the upcoming academic year (2020-21), mostly consisting of affordable and mid income schools. Remaining schools, however, are willing to offer 5% to 20% discount in the next academic year.

Another finding, which could come as a relief to those employed in the sector, indicate that majority of the respondents (77%) have no plans to reduce teaching staff in the next academic year and a similar percentage said they have no plans to reduce salaries of the teaching staff during coming academic year. A minority (23%) of respondents, however, are contemplating a decrease in teaching staff salaries ranging from 5% to 20%.

Parent perspective

Alternatively, a survey conducted with parents, revealed that 56% of the parents would prefer to continue with distance learning in the next academic year, unless COVID-19 is eradicated, or a vaccine is developed. Nearly, a quarter of respondents (24%) said they would still opt for a campus-based schooling, while 20% said they would prefer a 50% attendance with social distancing practiced in the school campus.

Further, regarding parents’ fees expectation for the next academic year starting September 2020, nearly half of the parents said they expect 40% or more discount. While 35% were satisfied with 30% discount and 13% were ready to accept a discount of 20% or less.

Long term impact?

The survey highlights that while K-12 operators/owners in the UAE look towards the next academic year (September 2020) with optimism, the pandemic will make a long-term change in the industry, as parents are expected to be more cautious and demanding than before.

The results of the survey indicate that the K-12 Education sector is significantly impacted by the COVID-19 pandemic, which is expected to last beyond the current academic year. Although there is no uniformity of approach. Some schools are looking to offer fee discounts, flexible payment plans and are taking other necessary measures to retain pupils. This will ultimately impact cashflows, compelling operators/investors to revisit operating expenses, especially the more significant costs including rental commitments with landlords.

New routes to sustainability

Our Education team has certainly been busy, assisting owners, operators and landlords during these challenging times as they reach out to find solutions that will ultimately benefit key stakeholders including parents and students. Immediate action has included evaluating and negotiating “affordable rent”, finding the means to enhance revenues and reduce costs while realistically forecasting cashflows for internal business planning. In the ‘new normal’, people are finding routes to a new version of sustainability.

 

Mansoor Ahmed is the Director (MENA Region) for Healthcare, Education & Public Private Partnership (PPP) at Colliers International

 

To view the full  Education Sector Market Sentiment Report, click here

 

 

Feature Image by asim mohammad from Pixabay

Support image: With kind permission – Colliers International