By Gavin Gibbon
Dino Varkey believes the economic crisis caused by the global pandemic will have serious repercussions for industry
The CEO of Dubai-based schools giant GEMS Education has said the Covid-19 global pandemic could lead to an increase in mergers and potential closures.
In an exclusive interview with Arabian Business, Dino Varkey admitted that the economic turmoil caused by the outbreak will have serious repercussions for the education industry, with redundancies and salary cuts across the board taking its toll on future school rolls.
He said: “The Covid-19 crisis has impacted some of the key economic pillars of the country whether it is retail, aviation, oil and gas. The families that choose our schools and many schools across the nation are those employed by these sectors and if we look at the market sentiments for these sectors it is projecting a decline, and subsequently a contraction in student enrolments.”
Schools in the UAE were forced to employ distance learning for the third term of the academic year as a result of strict lockdown measures and movement restrictions enforced by the government.
GEMS, which serves 124,000 students across almost 50 schools in the country, has come under fire from parents for adopting a means-test approach to discounts on school for families hit hardest by the current economic downturn.
However, Varkey has always stressed that the move was necessary in order to continue paying teacher salaries, rents and other essential costs, which make up around 95 percent of operating costs, while upholding a high standard of learning for students.
According to the KHDA website, there are currently 209 schools operating in Dubai with a further four set to open for the start of the new term.
Varkey believed, however, this picture could change dramatically ahead of the first school bell ringing in September.
He said: “It is important to know that in the history of the UAE, even during the global financial crisis, there has never been a time when enrolments have declined. In the current scenario, there are estimates that the reduction may be in double-digit percentages and we have to plan for that.
“In these scenarios if you don’t have the strength of a network of schools, if you don’t have the deep experience of many decades, as we have, then it will be more difficult for individual schools to continue to operate.
“In Dubai specifically, pre Covid-19, the sector was continuously growing but now the demand and supply gap is becoming more acute. I see consolidations and mergers of schools and in some cases inevitable closures.”