By Shaun Robison
A competitive market means greater choice, and more pressure on top schools to justify their prices
Affordable schools have seen a very big response from parents in Dubai in the past year. Clearly, parents are feeling the pinch, meaning price, as well as quality, matters.
This theory is borne out by the success of new schools that offer competitive packages. In 2016, GEMS Founders School, which offers the UK curriculum, opened in Al Barsha with a reported 1,700 children, the highest of any school that has opened in Dubai in the past five years. Its fees range from AED20,900 ($5,688) to AED29,000 per year.
Online school iCademy Middle East reported 11 percent growth last year for its US curriculum option, which costs between AED18,000 and AED27,000 per term.
This year, Newlands School, a new UK curriculum based in Al Warqa, with fees ranging from AED17,000 to AED26,000, opened with 267 children, the highest of any new school in Dubai this year, despite its announcement to open at the end of May, a very late start for a new school.
This perhaps marks a new trend in a market that has seen a huge increase in new schools every year for the past three years, with the majority of schools entering at the premium end. North London Collegiate School, with fees ranging from AED83,000 for KG1 going to AED130,000 for Grade 12 also opened in September. Last year, GEMS Nations opened with similar fees in 2016 but then merged with Dubai American Academy this year, which has fees of between AED23,000 and AED84,500. More new premium schools are on the horizon with the likes of Brighton College and The Dwight School already announced for 2018 openings.
Value and choice
As well as more choice in terms of price point, it’s clear that nearly all parents are now getting their first choice of school, which has not been the case for many years. In 2017, established legacy schools have advertised availability for the first time. And crucially, affordable schools have always given the more expensive schools a run for their money when it comes to academic results.
Al Salam Private School, with fees ranging from AED16,000 for FS1 to AED30,000 for Year 13, has delivered exceptional results, year upon year. It achieved excellent results in its 2017 IGCSE examinations with 97 percent of students achieving an A to C grade and a staggering 63 percent scoring an A or A*, placing them as a top five school in the country. All of the schools above them are in the premium segment of the market. Another affordable school, Al Diyafah is not far behind them.
It’s clear that the best, affordable schools get the core academic subjects right. The new premium schools can offer better facilities, bigger campuses, and newer resources but behind the glossiness, the core of education remains the same – the relationship between teacher and student. One noticeable advantage for new premium schools is the ability to offer small class sizes in the early years from FS1 to Year Two. Premium schools often promise class sizes smaller than affordable schools, which is an attractive proposition for parents. However, the pressure to get more children to cover costs means that this isn’t a given any more.
Routes to market
The financial stress of recruiting children is visible as school marketing budgets have doubled in the past year. In 2016, schools in the UAE spent $14.65m on advertising, according to the latest IPSOS figures. GEMS Nations Academy was the biggest spender in school marketing in 2016 and North London Collegiate School is in the top three in 2017.
However, there’s a good case to say that schools are not being efficient when it comes to marketing spend. Schools are still investing in traditional, and costly, advertising mediums that simply do not engage parents, who recognise they have choice at the top of the admissions funnel. In the digital age, it is a waste of time and money for schools to advertise in places where shoppers don’t look for help with school choice.
The sector still needs to professionalise within this niche space, and the necessity to have a strong digital marketing team has never been so apparent.
Premium schools are also offering discounts and scholarships to incentivise parents in order to fill places. Incidental discounts are becoming more frequent and parents are exercising their bargaining power with admissions offices at the premium segment of the market, which will inevitably put pressure on the mid-market segment.
With new operators at the affordable end of the market, and with the expansion of existing affordable players, the pressure on the higher priced schools to deliver on academic results will increase, as parents will start to question whether better facilities, and better resources is worth more, than better academic results, and a more sustainable financial model.
In the next two years, parents in Dubai will have choice at every price point, and affordable schools might be the option that enables expatriate parents to plan for a longer future in Dubai.