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Unlocking the value of yoUth, stUdent & edUcational traVel

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Images supplied by VisitBritain & iStock. Table of Contents

FOREWORD 4 INTRODUCTION 5 METHODOLOGY 6 EXECUTIVE SUMMARY 8

1 YOUTH TRAVEL: DEFINITIONS AND IMPORTANCE TO DESTINATIONS 10

2 THE UK AS A YOUTH AND STUDENT TRAVEL DESTINATION 14 Market Size 17 Market Value 20

3 SECTOR PROFILES AND TRENDS 22 Leisure Travel 23 Primary and Secondary Education 26 Higher Education 28 English Language Training 32 Youth Mobility Scheme 35

4 CONTEMPORARY FEATURES OF YOUTH AND STUDENT TRAVEL TO THE UK 36 Age Segments 38 Customer Preferences 39 Factors of Importance in Decision-making 44 Booking Channels 48 Opportunities and Challenges 50 Market Trends 54

5 UK’S COMPETITIVENESS IN THE GLOBAL CONTEXT 58

CONCLUSIONS 64 APPENDIX 1 Respondent Profile: Inbound UK Providers 66 APPENDIX 2 Respondent Profile: International Organisations 68 Foreword

Great Britain has traditionally This report aims to highlight the that the UK unlocks the barriers been viewed as a world class importance and value of this to growth to allow this sector destination for young travellers to sector, to promote the UK as a to flourish at the rate of our study, tour and work. must visit destination for young global competitors, to build travellers as part of our long upon our reputation as a must International travel for the term strategy to connect with visit destination and to grow our younger generation is not a Government and other influencers market share. bucket list wish, it is a high and to call upon them to better priority, it provides powerful life support our industry and the It is BETA’s intention to widely share experiences, cultural awareness businesses operating within it. the contents of this document as and is an education in itself. a tool to drive interest and growth Travel transcends gender, The UK needs to improve its into the market and we would like nationality and age and is proven welcome, review its complicated to thank all of those members to provide young people with a visa policy and remove and stakeholders that have come better future as a global citizen. international students from together to support and sponsor net migration figures, thereby this project. The inbound youth, student enhancing its ability to welcome and educational travel sector is the brightest and best to its shores. currently worth £22.3 billion per Board of Directors annum to the UK economy and The economic and cultural return British Educational Travel these young travellers represent for Britain from this type of travel Association (BETA) 38% of all inbound traffic to the UK. is felt over a lifetime through inward investment, global trade, But our world class industry is employment, tourism and the not growing at the pace that overall competitiveness of Britain it once did. Our competitor in the world. Young people stay destinations are thriving due to in a destination longer than more government support and an average traveller and they a greater understanding of the spend money directly with local importance of youth mobility and businesses, which increases the the lifetime benefits it can deliver. economic impact. It is essential

4 BETA Unlocking the Value of Youth, Student & Educational Travel Introduction

Accelerating globalisation, realise the importance of youth study, and work destination for a growing share of world’s travel and its burgeoning status. youth travellers faced with these population with access to new realities. increased financial resources, The UK has traditionally been at and an unceasing appetite to the forefront of the youth and The initiative quickly expanded travel are the three primary student travel. Its rich history, into an extensive exercise that driving forces behind the renowned landmarks, world- assessed the market size and consistent upswing in the class education, as well as the value, mapped out customer number of international travel provision of a variety of career preferences and market trends, arrivals. Over the last decade, opportunities, lure millions of identified opportunities for global tourism has expanded young people to its shores every UK’s future growth as well as at a steady annual rate, year. evaluated the UK’s position outperforming industries such as within an international frame. retail and manufacturing. On a mission to explore the status quo of international youth This combined collaborative In this context, youth travel has and student travel to the UK, effort by these two been a growing phenomenon the British Educational Travel organisations, involved that is increasingly challenging Association (BETA) published exhaustive research: launching to ascribe to a specific age a cross-sector analysis of the a global-scale primary data group. Previous BETA reports benefits of youth, student, and collection initiative and a review focused on the 11-35 age educational travel to the UK of existing secondary sources. bracket, but in line with the economy in their 2011 ‘Britain’s The breadth and depth of current industry standards, BETA Shining Opportunity’ report. this extensive exercise dwelt decided to use a broader age on the new data brought to span to increase compatibility of Much has changed since then. bear, sourcing inputs from 336 their present and future research The UK’s youth, student and organisations and analysing with national and international educational travel sectors have the habits of a minimum of 1.5 research projects. been confronted with a string of million young travellers. internal and external challenges. In monetary terms, youth travel Despite the popularity of the The resulting report answers is currently valued at £161 billion UK, changes to the visa policy, critical questions such as why globally. Notwithstanding, its currency fluctuations, political young people choose the UK, benefits extend far beyond and socio-economic instability what they seek and what is the direct and indirect, and in some important source outlook for the UK. It provides instant and future, economic countries, and increasing British organisations with the connotations. Young travellers promotional efforts by other most recent and detailed cross- contribute to the social fabric destinations have taken their toll sector business intelligence of local communities, embody on the UK’s growth and its ability tool, grounds for lobbying the a great source of talent and to reach its fullest potential. government and policy makers, innovation, and finally, are the and a platform through which to travellers of the future. Prompted by these raise the profile of the industry. developments, BETA Habits and affiliations formed commissioned StudentMarketing, Cognizant of a diverse at an early age are very likely an independent market research readership with varying to impact their future travel specialist and a UNWTO background and knowledge of endeavours, and this human Affiliate Member with individual the industry, this study integrates trait is acknowledged by a memberships in ESOMAR World within it a one-stop guide to number of destinations and Research, to conduct a complex international youth and student local tourism organisations who evaluation of the UK as a travel, travel to the UK.

Unlocking the Value of Youth, Student & Educational Travel BETA 5 Methodology

This study is the outcome of interviews as well as the launch constitute the cornerstones of a multi-faceted international of a targeted calling to invite Chapters 4 and 5. research project conducted from respondents to engage in the September 2016 to June 2017. exhaustive initiative. Following the deployment of surveys, in-depth interviews were The methodology was greatly Industry mapping initiated carried out with pre-selected influenced by the need to through desktop research, industry stakeholders: inbound compare and align a number with the aim of gathering and UK providers from a wide variety of youth and student travel analysing existing sector-based of sectors, travel and education sectors on an apples-to-apples market intelligence, supported agencies, leadership of global basis. Individual sectors are by StudentMarketing’s internal youth and student travel considerably different in terms resources. Over 170 secondary associations as well as other of their size and specifics, and sources across the global youth industry bodies. subsequently industry recognition and student travel segments and measurement. were reviewed. The number of respondents for individual questions is displayed Therefore, the research The gaps identified during this under each chart described as employed a range of data phase helped design follow-up ‘n’. collection methods to gather primary research. Primary data as much insight as possible, collection was conducted using especially on less documented quantitative as well as qualitative youth, student and educational methods. More specifically, two travel sectors. online surveys were deployed to collect inputs from inbound The project involved a review of UK providers and international secondary sources, deployment organisations sending youth of email campaigns and online and student travellers abroad. surveys, conducting one-to-one The results of these surveys

RESEARCH OVERVIEW

3 11 60 336 1.5 million research industry countries responding youth and student methods sectors worldwide organisations travellers

6 BETA Unlocking the Value of Youth, Student & Educational Travel In total, the primary research sending organisations The participating institutions drew conclusions from 336 representing 60 countries represented a minimum of organisations (106 inbound UK − as displayed in the map 1.5 million youth and student providers and 230 international below), and 20 interviews. travellers worldwide per annum.

GEOGRAPHICAL COVERAGE

Over 5% 3.1% - 5% 2.1% - 3% 1.1% - 2%

Russia 9.1% China 4.8% Mexico 2.9% Canada 1.9% Italy 7.2% UK 4.8% Ukraine 2.9% Argentina 1.4% Turkey 7.2% Brazil 3.4% Germany 2.4% Ecuador 1.4% Spain 6.7% USA 3.4% India 2.4% Kazakhstan 1.4% France 5.3% Pakistan 2.4% Morocco 1.4% Vietnam 2.4%

1% and less

Armenia 1.0% Saudi Arabia 1.0% Egypt 0.5% Nigeria 0.5% Colombia 1.0% Switzerland 1.0% Georgia 0.5% Norway 0.5% Czech Republic 1.0% Thailand 1.0% Ghana 0.5% Oman 0.5% Ireland 1.0% Algeria 0.5% Greece 0.5% Paraguay 0.5% Latvia 1.0% Australia 0.5% Iran 0.5% Peru 0.5% Lebanon 1.0% Belgium 0.5% Jamaica 0.5% Portugal 0.5% Nepal 1.0% Bosnia and Japan 0.5% Slovakia 0.5% Netherlands 1.0% Herzegovina 0.5% Malta 0.5% South Korea 0.5% Philippines 1.0% Chile 0.5% Mauritius 0.5% Sri Lanka 0.5% Poland 1.0% Denmark 0.5% Mongolia 0.5% Uruguay 0.5%

Unlocking the Value of Youth, Student & Educational Travel BETA 7 Executive Summary

Unlocking the Value of Youth An extensive literature review was current state of the UK’s youth Student & Educational Travel is followed by worldwide research and student travel industry, a comprehensive analysis of the on both inbound UK providers delves into its individual sectors, UK as a travel, education, and and sending organisations and elaborates on the UK’s global work experience destination for (which represent just over half of position. young people. all bookings in the sector). The results draw conclusions from The research highlights the To conduct this research, the a respondent pool composed behaviour and motivations for British Educational Travel of 336 businesses, which young people choosing to travel, Association commissioned cumulatively represent more study and work in the UK. In StudentMarketing, a market than 1.5 million youth and student addition, thanks to sourcing inputs research and industry strategist travellers from 60 countries. from international organisations, it firm and UNWTO Affiliate Member, also analyses the preferences and who evaluated the size and value The resulting study provides an perceptions of those travellers of the industry to the UK. exhaustive evaluation of the who do not opt for the UK.

AMONG THE KEY FINDINGS ARE:

Youth travel (people aged Shifts in demographics and The UK is a desired below 35) constitutes a preferences are changing the destination, but its competitors considerable travel segment face of youth travel to the UK: are more active in attracting for the UK: the global youth: Customers are getting younger International visits by young – 51% of all travellers served by Until the recent weakening of people represent 38% of all travel responding inbound UK providers Sterling, the strong currency to the UK. were juniors (below 18 years old). has been driving customers away – 21% of customers initially In 2016, youth and student travel Youth travellers tend to come opting for the UK chose another to the UK accounted for 14.9 to the UK in smaller groups and destination in the end, chiefly due million arrivals, with expenditure for a shorter period of time than to lower costs associated with by those travellers amounting to before (on average 8.2 weeks), living and studying elsewhere. £22.3 billion. yet they stay considerably longer than the average tourist to the Thanks to a friendlier visa policy However, with an average annual UK (7.4 nights), resulting in their and an increased in-country growth of 4.7% over the last five higher spending. presence and promotion, the years, youth travel is not keeping USA, Australia, and Canada have pace with overall tourism growth London dominates the list of been growing at a quicker pace to the UK. preferred destinations in the UK than the UK, especially in the (as reported by 96% of inbound higher education sector; Ireland’s UK organisations). popularity for English language training has also increased primarily thanks to currency fluctuations.

Since the traditional markets for the UK such as Europe (77% of all youth travel visits to the UK) have peaked or are shrinking, growth opportunities predominantly lie in Asian countries and the Middle East.

8 BETA Unlocking the Value of Youth, Student & Educational Travel Stakeholders call for Mixed impacts and The industry needs more consistent messaging and perceptions of Brexit are felt government support to get branding through the use of throughout the industry: back on track: the full spectrum of marketing platforms (both B2C and B2B Thanks to more favourable The biggest barrier to UK’s growth channels): exchange rates, the short-term is a lack of government support. impacts of the Referendum The UK needs to improve its on Brexit on youth travel to the Respondents praise initiatives welcome, review its complicated UK have been rather positive, undertaken by sector visa policy and remove with 32% of responding UK associations. international students from organisations noticing an net migration figures, thereby increase in the number of Developments in other enhancing its ability to attract the bookings since the Referendum. destinations point to industry brightest and best to its shores. deregulation, easing of entry At the same time, long-term conditions for young people The UK offers a quality product, uncertainty overshadows UK’s from abroad, and increasing but youth-specific marketing image as an outward-looking attractiveness (e.g. through the collateral and promotional country. provision of work rights, more activities are lagging English-taught programmes, competitor’s offerings (e.g. Possible changes in the visa inclusion of more nationalities celebrity marketing, appealing policy and regulations might under work schemes, etc.). packaging, etc.). hold inbound UK providers in a deadlock – 33% of the staff at Familiarisation tours and trade responding UK organisations missions are the preferred way are EU workers, underscoring the of engaging pre-selected B2B international character of the sending organisations – the UK segment. would benefit from increased usage of these accepted and effective methods.

Unlocking the Value of Youth, Student & Educational Travel BETA 9 YOUTH TRAVEL: DEFINITIONS AND IMPORTANCE TO DESTINATIONS

10 BETA 1Unlocking the Value of Youth, Student & Educational Travel 1 Youth Travel: Definitions and Importance to Destinations

Globally, travel by people aged Case studies from a number interest in own culture, although it between 15 and 29 (the only of countries demonstrate that only lasted during the homestay global benchmark to date) youth and student travel leaves period. However, informal comprises an estimated 23% a social imprint on the host communication style and higher of overall tourism (UNWTO and destination. usage of English persisted after WYSE Travel Confederation, the student left. 2016). Today’s youth travellers are highly educated and Thanks to their longer It indicates that young people ambitious, possessing a goal- tend to introduce their culture oriented mindset. Travel forms stays, young people and habits without the side an inherent part of their lifestyle. interact with locals and effects of causing loss of local Furthermore, they do not seem identity and values that might, to be limited by constraints therefore, their ability in later stages, lead to apathy experienced by previous to influence resident towards tourism among locals. generations. communities is greater Lastly, from the perspective of In terms of economic value, than that of an average destinations, youth travel also youth travel generates £161 billion serves like-minded host families annually and the spending is tourist. who share values similar to those predicted to reach £205 billion in of young travellers: an interest 2020 (StudentMarketing, 2016). in, and curiosity about the other; While short-term travellers tend the wish to experience variety For destinations that have been to be treated as ‘guests’, long- in everyday-life; and a sense able to attract youth travellers en term visitors (e.g. students, of mutuality in the exchange masse, this represents a lucrative volunteers and work experience especially when host parents revenue stream, for instance, programme participants) are wish to return something for their while young people account for often perceived as ‘temporary own child’s participation in an 25% of all arrivals to Australia, family or community members’. exchange programme. they account for the 44% of overall spending by international Defined as changes in the lives of Previous research has also visitors (Tourism Australia, 2017). people living in the destinations, demonstrated that the the social impact of youth travel experience boosts the Aside from the obvious and student travel has been, personal, social, and academic economic benefits, the presence thus far, best documented on development of young people. of youth travellers also has other host families involved in youth Travel triggers a transformation, effects on destinations they visit. exchange. increasing their willingness to With longer times spent in local learn and explore, helping them communities and their desire A study by IES found that among become more tolerant and to immerse in a new culture, the characteristics displayed by respectful, while also leading to young travellers deepen cultural Japanese host families during better academic performance at understanding. hosting a student was a higher school (SYTA, 2016).

Unlocking the Value of Youth, Student & Educational Travel BETA 11 TOP FIVE Direct Social Source of global BENEFITS 1 economic impact 3 impact 5 talent and innovation OF YOUTH TRAVEL The economic contribution is the Youth and student travel Destinations with more ‘buzz’ foremost driver for destinations is a platform for fostering among the younger generation to promote themselves to intercultural understanding and have a better chance to attract international youth and student mutual respect, which benefits the brightest and most talented travellers. This is especially local communities within the travellers to stay in their country. true for international education destination. Young travellers sectors which are, thanks to high enrich the social fabric of the programme costs and length destination. To a certain extent, of stay in the destination, the destinations also leverage youth highest revenue earners among travel as a form of cultural all industry segments. diplomacy and soft power.

Indirect Future 2 economic impact 4 visits

A consistent influx of youth and Travel habits and affiliations student travellers creates jobs embraced by young people at and generates taxes. Since an early age are likely to affect youth travellers stay longer in future travel-related preferences. their destinations than average Engaging young people is a tourists, and are therefore golden opportunity to harness likely to be visited by friends recurring visitors – they have and relatives, their presence many years of travel ahead of generates knock-on visitation them. and additional in-country expenditure.

12 BETA Unlocking the Value of Youth, Student & Educational Travel 1 Youth Travel: Definitions and Importance to Destinations

YOUTH Encompassing a diverse range of programmes, youth and student travel is usually divided into three sectors TRAVEL categorised by purpose of travel: SECTORS

LEISURE TRAVEL EDUCATIONAL TRAVEL WORK ABROAD

Visiting a foreign country to Student travel is one of the Programmes combining explore and immerse into fastest-growing sectors of living and working in a foreign local culture constitutes the international travel. Overall, country are another important largest subset of youth travel, 7,180,000 international students driver of youth mobility. In an accounting for 60%-70% of all study at a primary, secondary increasingly globalised world international travel arrivals. or higher education level, or with growing demands by the Leisure trips by young people learn a language abroad. As a job market, young people seek often involve some sort of sector, international education international work experience meaningful activity or adventure. alone is an £82 billion industry to bolster their employability. (StudentMarketing, 2016). Short- Typical programmes falling term educational programmes under this category range from in this category include school Working Holidays and Young trips and mini-stays (short-term Professional schemes, through cultural and language immersion paid and unpaid internships, abroad). to Au Pair programmes. Age and nationality quotas are characteristic features of these stays abroad.

Unlocking the Value of Youth, Student & Educational Travel BETA 13 THE UK AS A YOUTH AND STUDENT TRAVEL DESTINATION

14 BETA 2Unlocking the Value of Youth, Student & Educational Travel 2 The UK as a Youth and Student Travel Destination

The world is poised for a surge UK, usually the young travellers’ percentage point a year. The in the mobility of young people. leading choice for many years. UK’s dependency on Europe as a Having outgrown its niche nature, source market will be challenged youth, student and educational Furthermore, according to a due to an ageing population travel is now the subject of 2016 study by IPK International, that is set to change the face intense targeting by an ever- over the last decade Germany of youth and student travel. greater number of destinations. has established itself as the top Currently, European countries destination among European account for 77% of all youth travel Over the last decade and young travellers, which it arrivals to the UK. a half these destinations, attributed to its worldwide image whether through central and/ as a hospitable and open country. The UK has been at the forefront or provincial Destination of many youth, student and Marketing Organisations (DMOs), Youth and student mobility to educational travel sectors, are increasingly promoting the UK is also influenced by especially international themselves to an international the demographic shifts taking education. However, recent youth audience. place in Europe. The same developments in the industry study stated that since 2007 are making global positioning This flood of competition, in turn, travel by Europeans aged 15-29 of the UK less attractive to this has created pressure on the has been decreasing by one particular audience.

INTERNATIONALISATION & STUDENT GROWTH AMBITIONS: TARGET NUMBER OF INTERNATIONAL STUDENTS

100,000

450,000 350,000 500,000 200,000

300,000

470,000 150,000

250,000 720,000

450,000 470,000 150,000 350,000 100,000 250,000 500,000 200,000 300,000 720,000

CANADA FRANCE TURKEY GERMANY POLAND MALAYSIA CHINA SOUTH KOREA JAPAN AUSTRALIA

Source: Government of Canada, 2015; Campus France, 2014; Ministry of Science and Higher Education Poland, 2015; International Relations Office Turkey, 2014; DAAD Germany, 2014; Ministry of Education China, 2011; Ministry of Education Malaysia, 2015; Ministry of Education, Republic of Korea, 2015; The Government of Japan, 2013; Australian Education International, 2017

Unlocking the Value of Youth, Student & Educational Travel BETA 15 The UK competes for youth Policies such as increasing Combined with the current and student travellers in an work rights, post-study work political messaging and environment where other opportunities, and the growth in perception of the UK as a destinations are increasingly English-taught programmes in costly destination, this has all opening their doors to young non-English speaking countries resulted in the UK being unable people from abroad. A are also contributing to the to keep pace with growth other prerequisite of such activities is overall attractiveness of the UK’s destinations are experiencing at the recognition of youth travel competitors. the UK’s cost. and its sectors as a stand-alone segment (developing strategies Thirdly, systematic and strategic Positively enough, the UK is also to tap into this market includes promotion from its main one of the markets with relatively target-setting). The results competitors, as well as the detailed measurement of of a comparative analysis of emergence of new ‘players’ who youth and student travel – a selected destinations globally pursue orchestrated marketing precursor to understanding and demonstrate the competitive efforts, are eroding the UK’s succeeding in marketing to this nature of the international primacy as a youth and student segment. education sector and provide travel destination. While the a benchmark with which the UK sum of individual marketing Yet, its closest competitors, such can measure its own goals. efforts and promotion by UK as Australia or Canada, are also industry/sector associations are gaining an edge thanks to the Secondly, the market is headed comparable, or even exceed implementation of more mature towards more deregulation. those of peer associations measurement models (e.g. more Government agencies in leading in other destinations, UK’s frequent data collection and destinations are easing visa competitors greatly benefit from reporting throughout the year, policies and entry requirements joint marketing activities and which allows for more timely for young people and students. frequent visits to source countries. tactical adjustments).

16 BETA Unlocking the Value of Youth, Student & Educational Travel 2 The UK as a Youth and Student Travel Destination

Market Size

MARKET This report draws from the YOUTH TRAVEL ARRIVALS (0-34 YEARS OLD) AND TOTAL SIZE International Passenger Survey ARRIVALS (MILLIONS) (IPS) conducted by the Office for National Statistics for overall youth and student traveller Youth travel arrivals Total arrivals Youth travel arrivals Total arrivals numbers. The survey gathers 36.1 37.6 data from a random sample 34.436.1 32.734.4 of inbound travellers to the 30.8 32.731.1 31.1 UK (predominantly featured in this study as no alternative source on breakdown and trend data for specific age groups is available). 13.2 13.213.5 13.5 14.1 11.8 11.8 11.911.8 11.9 For individual types of inbound travel, further evaluation also reflects on sector-based data evidence. 2012 2013 2014 2015 2016 According to the latest IPS data, 2011 2012 2013 2014 2015 the number of young people travelling to the UK (aged up to Source: Office for National Statistics,2017 34) increased from 11.8 million in 2012 to 14.1 million in 2016. This translates into an average annual growth of 4.7%. BREAKDOWN OF INDIVIDUAL AGE SEGMENTS (MILLIONS)

The total number of international visits increased to 37.6 million 0-150-15 16-24 16-24 25-34 25-34 in 2016. Based on these 8.1 numbers, youth and student 7.7 7.68 travel represents 38% of all 7.2 7.23 6.7 6.746.8 6.84 international arrivals to the UK. 6.58 This share has remained stable over the past five years. 4.2 4.0 3.98 In comparison, the 35-44 and 3.783.7 3.7 3.7 3.723.9 3.88 45-54 age groups accounted for 23% and 21% of all visits 2.1 2.08 respectively. Travellers aged 1.9 1.85 1.8 55+ also formed a sizeable 1.4 1.3 1.34 1.4 1.38 proportion of inbound travel to the UK - 19%.

20112012 20122013 20132014 20142015 20152016

Source: Office for National Statistics,2017

Unlocking the Value of Youth, Student & Educational Travel BETA 17 TOP NUMBER OF YOUTH TRAVELLERS TO THE UK (0-34 YEARS OLD); OVERALL NUMBER OF TRAVELLERS TO SOURCE THE UK; YOUTH TRAVEL’S SHARE OF OVERALL TOURISM TO THE UK (2016) MARKETS

Total arrivals Youth travel arrivals 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 42% 1,500,000 42% 30% 33% 37% 1,000,000 45% 43% 36% 500,000 44% 37% 0

Source: Office for National Statistics,2017 2016 2016

NUMBER OF YOUTH TRAVELLERS TO THE UK BY AGE SEGMENT AND THE SHARE OF OVERALL TOURISM TO THE UK (2016)

0-15 16-24 25-34 900,000 20% 800,000 21% 700,000 19% 20% 600,000 22% 12% 26% 500,000 14% 24% 21% 400,000 9% 9% 16% 300,000 11% 30% 7% 8% 12% 11% 20% 200,000 5% 13% 14% 4% 5% 5% 5% 100,000 2% 1% 3% 0

Source: Office for National Statistics,2017 0-15 16-24 25-34

18 BETA Unlocking the Value of Youth, Student & Educational Travel 2 The UK as a Youth and Student Travel Destination

TOP France is the major source market In terms of trend data, France international student numbers, SOURCE for youth travellers coming to the and Germany experienced a which are under-represented in MARKETS UK. Of the top 10 markets, youth notable drop in 0-15 segment IPS figures. travel constitutes the biggest in 2016 (down by 25% and 17%, age segment for Italy (45%), respectively), while their 16- Comparing statistics from Romania (44%) and Poland 24 brackets grew by 10% and international education sectors (43%). Conversely, inbound youth 9%. Overall, France as the only with IPS data, the difference adds travellers to the UK are under- member of the top 10 markets up to over 500,000 international represented among the USA, experienced a decline in youth students who are not included Ireland, and the Netherlands. travel (down by 7%). in the IPS statistics. It is possible that this is due to sampling, or The dominance of France As for other markets, Spain and international education sector among other source markets the USA have been showing specific reporting constraints may be partially attributed to the mixed results until picking up such as intake days as student high number of youth travellers again in 2013. Continuous growth traveller arrivals are not evenly aged up to 15 years old. In 2016, since 2012 has been recorded by spread throughout the entire year. 382,742 of them visited the UK, Germany, Romania, and Poland. compared to 227,533 arrivals Acknowledging that not all of of the same age group from Breaking the data into further these visitors represent new Germany. Romania, which joined individual segments (leisure, arrivals (i.e. students staying the top 10 source markets for VFR, study, business, and longer than one year), they still youth travellers in 2016, becomes miscellaneous), it becomes pay tuition, accommodation more prevalent as a source apparent that IPS data diverges fees, and living costs in the market for the oldest of the three from specific sector-based UK, and therefore must not be age groups. The USA and Ireland, reporting. The discrepancy is excluded from market size and exhibits a similar market structure. most evident in the case of value calculations.

SECTOR-BASED APPROACH TO YOUTH AND STUDENT TRAVEL MARKET SIZE

Sector Market size Source (Reference year) Leisure Travel 6,110,000 Office for National Statistics 2016( ) Visiting Friends and Relatives 4,280,000 Office for National Statistics 2016( ) Primary and Secondary Education 27,633 ISC (2016) Higher Education 438,015 HESA (2015/16) Further Education 227,165 British Council (2009)* English Language Training 476,920 English UK (2016) Youth Mobility Scheme (Tier 5) 22,342 Home Office 2016( ) Other** 3,270,000 Office for National Statistics 2016( ) TOTAL 14,852,075

*Despite investigating at several UK institutions, it was not possible to provide a reliable more recent indication of the market size. **‘Other’ represents the following categories measured within IPS: Business travel and Miscellaneous.

Unlocking the Value of Youth, Student & Educational Travel BETA 19 Market Value

AVERAGE Youth travellers’ longer length per trip. Spending per visit by aged below 35 is expected to SPENDING of stay, when compared to 16-24 year olds is reported to be be even higher, when taking into average tourists, translates into the highest per person of all age consideration students and their a higher average expenditure groups. Expenditure of travellers study-related fees.

AVERAGE SPENDING PER VISIT BY AGE GROUP £740 £606 £631 £603 £723 £600 £582 £666 £621 £422 £573 £539 £607 £415

0-15 16-24 25-34 35-44 45-54 55-64 65+

Source: Office for National Statistics,2017

MARKET Therefore, rather than relying footprint. These market value The overall market value resulted VALUE solely on the IPS data, custom calculations were based from the total respective calculations for educational on market size data from expenditure in the sectors below. travel sectors were developed associations (ISC, English UK) to calculate their real economic and statistics offices (HESA).

SECTOR-BASED APPROACH TO YOUTH AND STUDENT TRAVEL MARKET VALUE

Sector Expenditure Source (Reference year) Leisure Travel £3,230,000,000 Office for National Statistics 2016( ) Visiting Friends and Relatives £1,520,000,000 Office for National Statistics 2016( ) Primary and Secondary Education £859,095,992 ISC/StudentMarketing (2016) Higher Education £10,566,739,382 HESA, BIS, NUS (2015/16) Further Education £2,898,597,584 BETA/StudentMarketing (2015) English Language Training £1,190,000,000 Capital Economics (2014) Other* £2,020,000,000 Office for National Statistics 2016( ) TOTAL £22,284,432,958

*‘Other’ represents the following categories measured within IPS: Business travel and Miscellaneous.

20 BETA Unlocking the Value of Youth, Student & Educational Travel 2 The UK as a Youth and Student Travel Destination

Further details about respective market value calculations can be found in the individual sector profiles that follow below.

Note: As a standard part of the assessment, the research gathered input data and calculated expenditure on a comparable level. Notwithstanding, it was not one of the objectives of this research to provide economic impact with all its attributes, such as gross value added (GVA) and taxes generated. Given the sector diversity, varying levels of documentation, the calculation of the full economic impact of youth and student travel to the UK economy would represent a stand-alone exercise. As a result, this study is not a piece of economic research and is not intended to constitute investment advice.

For the purposes of this report, ‘expenditure’ is defined as spending in the UK by overseas residents (excluding the amounts spent on travel to and from the UK). To calculate comparable expenditure by international students, the following items were included in this calculation: • Study-related fees (tuition and other study-related fees – application fees, extra-curricular fees etc.); • Accommodation and meals; • Other living expenses (entertainment, transportation, shopping etc.).

MARKET VALUE COMPARISON

£12.1 bn £14.3 bn £14.5 bn £17.6 bn £22.3 bn Twitter NASA annual Ryanair Top 20 Expenditure of youth and budget Holding football clubs student travellers to the UK

Source: NASA, 2017; Forbes, 2017; Office for National Statistics,2017 ; Independent Schools Council, 2016; HESA, 2017; BIS, 2013; NUS, 2015; BETA/StudentMarketing, 2017; Capital Economics, 2015

Unlocking the Value of Youth, Student & Educational Travel BETA 21 SECTOR PROFILES AND TRENDS

22 BETA 3Unlocking the Value of Youth, Student & Educational Travel 3 Sector Profiles and Trends

Measurement of individual sectors varies. The series of fact sheets below introduce selected youth and student travel sectors; their overviews provide a global context to the UK, demonstrate its historical performance, identify top source markets, and elaborate on key developments and specifics of each sector.

Leisure Travel

Leisure travel to the UK represents the most populous segment of youth and student travel. As much as 43% of all international youth arrivals to the UK were for holidays.

MARKET NUMBER OF YOUTH TRAVELLERS (0-34 YEARS OLD) VISITING THE UK FOR HOLIDAY PURPOSES SIZE

6,120,000 6,140,000 6,110,000 5,310,000 5,330,000

2012 2013 2014 2015 2016

Source: Office for National Statistics,2017

In 2016, approximately 6,110,000 youth travellers visited the UK for holiday purposes, a slight decrease of 0.47% compared to 2015. Leisure travel is the most popular form among youth travellers aged 25-34 – 3,000,000 (49%) of them visited the UK for a holiday in 2016; this compared to 1,140,000 children aged below 15 (19%), and 1,970,000 young adults between the ages of 16 and 24 (32%) in the same period.

Unlocking the Value of Youth, Student & Educational Travel BETA 23 TOP NUMBER OF YOUTH TRAVELLERS (0-34 YEARS OLD) VISITING THE UK FOR HOLIDAY PURPOSES SOURCE MARKETS 2012 2013 2014 2015 2016 1,200,000

1,000,000

800,000

600,000

400,000

200,000

0

Source: Office for National Statistics,2017

Thanks to its proximity, Europe With 591,360 arrivals, North Europe (£395). is the main source region for America constitutes the second the UK leisure travel sector, largest source region, yet the Young holiday-makers from Latin with France and Germany numbers remain below when America decreased in numbers accounting for over 26% of the compared to the pre-2008 levels by 16% since 2015 accounting for traffic. Among other findings, (over 600,000 arrivals annually). 168,156 arrivals in 2016. The main the importance of Italy in this reason behind this was Brazil, particular sector overshadows On the contrary, Asia has been from which the visitor numbers both Ireland and Spain, although exhibiting a consistent growth shrunk by 54% (from 95,912 in Spain is predicted to make it since 2009 and represents a 2015 to 44,188 in 2016). the number four in the coming promising market for the UK. years. Among other markets, the Middle China’s number of youth East showed double-digit growth Regional analysis results travellers skyrocketed by 75% until declining in 2015, and again reveal opposing trends among since 2014 to reach 67,278 in increasing by 14% in 2016. individual markets. Europe as 2016. Despite the surge, their the traditional core region is not share of all youth travel visits Youth travel arrivals from Africa growing as fast as other regions. stood at 1%. At the same time, the dropped by 39% between 2013 Due to population ageing, average length of stay of Chinese and 2016 after a short period of opportunities for growth are in young people was almost twice minor growth (2011-2013). increasing frequency of travel as high as the average across (more trips per person) rather all markets (9.9 nights vs 5.5). The findings suggest that there than increases in the sheer Moreover, their average spend of is untapped potential in Asia and number of travellers. £1,354 far exceeded the levels of the Middle East.

24 BETA Unlocking the Value of Youth, Student & Educational Travel 3 Sector Profiles and Trends

MARKET EXPENDITURE BY YOUTH TRAVELLERS (0-34 YEARS OLD) VISITING THE UK FOR HOLIDAY VALUE PURPOSES (BILLIONS)

2012 £2,820,000,000

2013 £3,070,000,000

2014 £3,300,000,000

2015 £3,320,000,000

2016 £3,230,000,000

Source: Office for National Statistics,2017

The high volume of youth leisure the first year of decline when their shorter stays (4.8 nights vs travel leaves a considerable the amount spent totalled £3.23 5.5 nights on average) and lower economic footprint on the UK billion. spending per trip (£395 vs £529 economy. Revenue generated on average), their significant by young holiday-makers Such performance in expenditure share of the overall number of between 2010 and 2015 has been is a direct effect of the declining leisure travellers (74%) impacts gradually growing from £2.43 number of travellers from Europe the development of spending as billion to £3.32 billion. 2016 was over the past two years. Despite a whole.

Unlocking the Value of Youth, Student & Educational Travel BETA 25 Primary and Secondary Education

Since no comprehensive statistics covering the total market exist, the data in this segment comes from the Independent Schools Council (ISC), an umbrella association aligning independent schools in the UK. Students in ISC schools represent approximately 80% of all students in UK independent schools. According to the organisation’s annual census, its members hosted a total of 27,633 non-British students with parents living overseas – an increase of 2% over 2015.

MARKET It is largely impossible to provide NUMBER OF NON-BRITISH STUDENTS WITH PARENTS LIVING SIZE a like-for-like comparison OVERSEAS amongst major English speaking destinations due to methodological differences in data collection. Nevertheless, if one were to be made, then 24,554 26,376 25,912 24,391 27,211 27,633 the UK would be the third most popular K-12 destination after the USA and Canada (the USA 2011 2012 2013 2014 2015 2016 hosted 73,019 international secondary students in 2013; Source: Independent Schools Council, 2012-2017 Canada 55,970 primary and secondary students in 2015). While, the school sector in NUMBER OF INTERNATIONAL PRIMARY AND SECONDARY STUDENTS Australia and New Zealand IN SELECTED DESTINATIONS enrolled 23,330 (November 2016), and 17,480 (April 2016) international students 73,019 respectively. 55,970

27,633 23,330 17,480

USA Canada UK Australia New Zealand

Source: Institute of International Education, 2014 (figure for secondary students only, 2013); Immigration, Refugees and Citizenship Canada, 2016 (figure for primary and secondary students with a valid study permit, 2015); Independent Schools Council, 2016 (figure for non-British pupils with parents living overseas in ISC member schools, from 2016); Australian Government, Department for Education and Training, 2017 (figure for primary and secondary students, as of November 2016); New Zealand Ministry of Education, 2017 (figure for all fee-paying primary and secondary students, as of April 2016)

26 BETA Unlocking the Value of Youth, Student & Educational Travel 3 Sector Profiles and Trends

TOP NUMBER OF NON-BRITISH STUDENTS WITH PARENTS LIVING OVERSEAS SOURCE MARKETS 2011 2012 2013 2014 2015 2016 7,000

6,000

5,000

4,000

3,000

2,000

1,000

0 China Hong Russia Germany Spain Nigeria Thailand Malaysia France South Kong Korea

Source: Independent Schools Council, 2012– 2017

China is the biggest source constantly growing and in 2015 Kong, and the top 5 markets market for primary and China replaced Hong Kong as accounted for 60% of overall secondary education with 6,280 the top source market. Almost sending power. students enrolled in ISC member two in five international students schools. The market has been were from either China or Hong

MARKET EXPENDITURE OF OVERSEAS million in 2015, when applying impact on UK higher education. VALUE PUPILS AT ISC SCHOOLS the respective increase in According to a 2011 ISC survey, the student numbers to the 77% of international students In its 2014 economic impact expenditure. entered UK higher education study, ISC estimated that the institutions after graduating expenditure by overseas pupils Apart from the direct economic from ISC schools. This equates attending ISC schools amounted benefits, foreign students are to approximately 6,700 new to £799 million, supporting also drivers of multiculturalism students per year entering 17,300 jobs and generating and help broaden perspectives UK universities and further tax revenue of £278 million in of domestic students. contributing to the economy 2012. Since the lack of a proper Furthermore, international by paying for their tuition, update since 2014 it is estimated students at primary and accommodation, and off- that the students spent £846 secondary levels have a direct campus expenses.

Unlocking the Value of Youth, Student & Educational Travel BETA 27 Higher Education

Higher education, measured by the Higher Education Statistics Agency (HESA), is one of the best monitored youth and student travel segments. In the 2015/16 academic year, 438,015 international students were enrolled at UK higher education institutions.

Globally, UK is the second most popular higher education destination (after the USA). In fact, one in five students in the UK is an international student, which makes the UK the destination with the highest international student body share in the world (Project Atlas, 2016).

MARKET NUMBER OF INTERNATIONAL HIGHER EDUCATION STUDENTS (EU AND NON-EU) IN UK INSTITUTIONS SIZE

428,230 435,230 425,260 435,495 436,880 438,015

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

Source: HESA, 2011-2016

However, in 2015/16 a minor A more detailed comparison The increased delivery of in- decrease in the number of of selected destinations follows source country education directly first-year non-EU students (-1%) below. impacts the enrolment figures was registered. This negative in the UK (the overall costs of development underscores the fact It is also noteworthy that the UK studying a UK qualification in a that the UK is losing pace with its is much more internationally home country is considerably major competitors in the sector. active through the provision of lower than studying in the UK). Transnational Education (TNE). While the overall enrolment As reported by HESA, there were The UK is generally understood figures remain flat, over the 701,010 transnational students to have the highest volume of last five academic years, studying wholly overseas for a UK higher education TNE activity of international higher education higher education qualification in any country, which is predicted population in the USA has 2015/16. Most of these students to grow more quickly than surged by 44%. Over the same were taking classes in Malaysia international student recruitment period, Canada and Australia (78,850), China (64,560), to the UK (UK HE International have grown by 51% and 27% Singapore (49,970), Pakistan Unit, 2017). respectively (Project Atlas, 2016). (46,640), and Nigeria (35,015).

28 BETA Unlocking the Value of Youth, Student & Educational Travel 3 Sector Profiles and Trends

1,200,000

MARKET NUMBER OF INTERNATIONAL HIGHER EDUCATION STUDENTS IN SELECTED DESTINATIONS SIZE 1,000,000 1,200,000

USA 1,000,000 800,000 UK USA 800,000 China UK

600,000 China France 600,000 France Australia Australia

400,000 400,000 Canada Canada Germany Germany 200,000 Japan 200,000 Japan

0 2011 2012 2013 2014 2015 0

Source:2011 Project Atlas, 20122016; HESA, 2016;2013 IRCC, 2016; DAAD,2014 2017 2015

The pace with which the main students (Brexit, regulations). In contrast to the UK, its closest destinations benefit from the competitors are providing more ever-growing international higher The abolition of the post- post-study work opportunities. education mobility exposes study work scheme proved For instance, the USA increased the lag the UK and Japan are to be serious hit to the UK’s the extension of the 12-month experiencing versus other attractiveness for international Optional Practical Training for destinations. students. The Migration STEM (science, technology, Observatory stated that 11,000 engineering, mathematics) The minor gains for the UK can people, who previously held students by additional 24 be predominantly attributed to study visas, were granted months; and Ireland recently the absence of post-study work extensions to remain in the UK in announced that it will allow opportunities, a strict visa policy a category other than study in international postgraduates to (students are included under net 2015 – a decline from 44,100 in stay two years after finishing their migration), and unwelcoming 2012 (which marked the end of degree. messaging to international the scheme).

Unlocking the Value of Youth, Student & Educational Travel BETA 29 TOP NUMBER OF INTERNATIONAL HIGHER EDUCATION STUDENTS (EU) IN UK INSTITUTIONS SOURCE MARKETS 2011/12 2012/13 2013/14 2014/15 2015/16 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Germany France Italy Ireland Greece Cyprus Spain Romania Bulgaria Poland

Source: HESA, 2012-2017

NUMBER OF INTERNATIONAL HIGHER EDUCATION STUDENTS (NON-EU) IN UK INSTITUTIONS

2011/12 2012/13 2013/14 2014/15 2015/16 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 China Malaysia USA India Hong Nigeria Saudi Singapore Thailand Canada Kong Arabia

Source: HESA, 2012-2017

30 BETA Unlocking the Value of Youth, Student & Educational Travel 3 Sector Profiles and Trends

While many EU countries and globally, China has been in other destinations, has been exhibited a decline, Italy and exhibiting lower growth levels on a continuous decline for Spain were recently joined a by for the UK in terms of student the UK, having recently been an uptick in France. This increase numbers than for the USA or overtaken by Malaysia and the in numbers is largely driven Australia. USA, who now together account by China and Hong Kong. As for the top three source countries the biggest source market for India, which is among the leading for international higher education higher education, both in the UK source countries driving growth in the UK.

MARKET EXPENDITURE OF When calculating total UK points out that on- and VALUE INTERNATIONAL HIGHER expenditure of higher education off-campus spending by EDUCATION STUDENTS students, the following international students and their expenditure categories were visitors generated £25.8 billion in International higher education is taken into account: tuition gross output for the UK economy the highest revenue generator for fees, accommodation costs, in 2015. This activity resulted in the UK economy among all youth and other living costs. Annual £13.8 billion gross value added travel sectors. tuition fees of various levels of (GVA) to UK GDP. higher education students were Based on a number of sources sourced from HESA statistics Furthermore, friends and relatives and references, including, inter 2014/15. Accommodation of international students in the alia, HESA, Department for costs were sourced from the UK generated £520 million in Business, Innovation & Skills, Accommodation Costs Survey spending. National Union of Students 2014-2016 conducted by National surveys, StudentMarketing Union of Students. The average This on- and off-campus evaluated that the expenditure weekly rent was calculated per spending by the UK’s 437,000 EU by higher education students in academic year (10 months). and non-EU students supported the UK reached £10.6 billion in Data for living expenditure per the equivalent of 206,600 full- 2015. year was attained by excluding time jobs across the country. the accommodation costs from The initiative also sought to total personal expenditure (less incorporate the most recent the tuition fee), as published in further education data. Despite The Impact of Universities on the investigating at several UK UK Economy 2011/12 report. institutions, it was not possible to provide a reliable indication All three expenditure types were of the market size. Hence the calculated per total number calculation utilises the latest of students sourced from the known reference point (227,165 newest available HESA statistics international FE students in 2009) (2015/16 tables). and growth rates in the HE sector, to estimate the value of the FE The latest report by Oxford sector at £2.9 billion. Economics for Universities

Unlocking the Value of Youth, Student & Educational Travel BETA 31 English Language Training

For English language travel, this report builds on the data collected by English UK, the umbrella association aligning English language centres across the UK alongside global size calculations by StudentMarketing. English UK represents an estimated 70%-80% of the total UK English language training (ELT) market.

MARKET Approximately 1.4 million students stagnant worldwide compared (StudentMarketing, 2016). It can SIZE visited eight major destinations to a decade ago. Destinations thus be estimated that the total to learn English in 2016. In 2016, compete for a similar pool of market is over 600,000 students according to English UK, 476,920 students each year (global per annum. This makes the UK English language students spent growth rate up to 3% in the last the most popular destination a total of 1,787,380 student five measured years). to study English worldwide, weeks at its member centres. despite the UK’s market share Unlike international higher Overall, there are 1,061 language experiencing rapid decline. education (globally), global centres across the UK teaching ELT growth levels have become English to international students

NUMBER OF ENGLISH LANGUAGE STUDENTS TAUGHT BY ENGLISH UK MEMBER CENTRES

585,504 580,618 535,485 508,176 476,920

2012 2013 2014 2015 2016

Source: English UK, 2013-2017

While the UK still maintains student numbers and 13% in clearly indicated a gradual its top spot among English student weeks. increase in the number of junior language travel destinations, students, until experiencing the 2016 marked its third consecutive The market now hosts more first drop in 2015. Nonetheless, year of decline. English UK juniors (students below 18 years juniors now represent a larger member centres reported a old) than adults (51% and 49% English language student group year-on-year drop of 11% in respectively). English UK data in the UK.

32 BETA Unlocking the Value of Youth, Student & Educational Travel 3 Sector Profiles and Trends

MARKET NUMBER OF ENGLISH LANGUAGE WEEKS SPENT IN MAJOR ELT DESTINATIONS SIZE 2011 2012 2013 2014 2015 4,000,000

3,500,000

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

0 USA UK Australia Canada Ireland New Malta South Africa Zealand

Source: StudentMarketing, 2016

The global ELT sector is primarily measured in student weeks. Over the 2011-2015 period, the UK’s global market share dropped from 31% to 22%.

Unlocking the Value of Youth, Student & Educational Travel BETA 33 TOP NUMBER OF STUDENT WEEKS SPENT IN ENGLISH UK PRIVATE SECTOR MEMBER CENTRES SOURCE MARKETS 2012 2013 2014 2015 2016 350,000350,000

300,000300,000

250,000250,000

200,000200,000

150,000150,000

100,000100,000

50,00050,000

0 0 ItalyItaly SaudiSpain SpainSaudi China/France FranceChina TurkeyTurkey SwitzerlandSouth SwitzerlandSouth JapanJapan GermanyGermany Arabia Arabia Hong Kong Korea Korea

Source: English UK, 2013-2017

The development, when looked competition among ELT growth markets were Saudi at in terms of student weeks for destinations were the major Arabia, Kuwait and Argentina. the top source countries, mostly reasons for another decline in mirrors development in student 2016. Eyeing future opportunities, UK numbers: traditionally strong institutions are not currently markets exhibited shrinking English UK private sector member benefiting from the growth levels volumes of student weeks in the centres reported that the most of Vietnam, China, Brazil and last measured year. The lack of student weeks were spent by Mexico. For instance, the market scholarships from governments students from Italy, Saudi Arabia, share of the UK in China stands in sending countries, political and Spain, France, and China. While at 9%. There are also further economic turmoil in some source the biggest decreases came opportunities for growth in Japan markets and strengthening from Italy, Libya and Spain; and Thailand.

MARKET EXPENDITURE OF ENGLISH economy. In 2014, international accommodation, and other living VALUE LANGUAGE STUDENTS IN THE UK English language students costs. Moreover, 26,000 new job contributed £1.19 billion to UK placements were created thanks The ELT sector is an important export revenue by spending to international English learners revenue generator to the UK money on tuition fees, (Capital Economics, 2015).

34 BETA Unlocking the Value of Youth, Student & Educational Travel 3 Sector Profiles and Trends

Youth Mobility Scheme

The Youth Mobility Scheme (under Tier 5) was established in 2008 to cater to young people aged 18-30 wishing to work in the UK for up two years, effectively replacing the previous Working Holidaymaker scheme. Although a certain proportion of this traveller type might be represented in the IPS data, this initiative considered the scheme worth analysis and the subject of a comparison with peer destinations that operate similar schemes.

MARKET 2016 saw 22,342 visas granted between both above mentioned presented above, there were SIZE to youth travellers who desired schemes, cumulative data is 58,423 Working holidaymakers in to work in the UK, a 12% decline featured below. To provide the UK in 2005. from 2015. Due to an overlap historical context to the figures

NUMBER OF YOUTH MOBILITY AND WORKING HOLIDAYMAKERS ENTRY CLEARANCE VISAS GRANTED

25,321 19,629 20,858 23,525 22,342

2012 2013 2014 2015 2016

Source: Home Office,2017

In comparison to other respectively. Eight nationalities Hong Kong, Republic of Korea, destinations, Working Holidays are eligible to participate and Taiwan – while the list schemes in Australia and New in the UK’s Youth Mobility of nationalities accepted in Zealand attract 325,000 and Scheme – Australia, Canada, Australia and New Zealand is 29,000 international travellers Japan, Monaco, New Zealand, considerably longer.

NUMBER OF YOUTH MOBILITY ENTRY CLEARANCE VISAS GRANTED IN 2016 BY COUNTRY

11,265

3,954 3,265 1,191 1,034 954 673 1

Australia New Canada Hong Taiwan South Japan Monaco Zealand Kong Korea

Source: Home Office, 2017

Unlocking the Value of Youth, Student & Educational Travel BETA 35 CONTEMPORARY FEATURES OF YOUTH AND STUDENT TRAVEL TO THE UK

36 BETA 4Unlocking the Value of Youth, Student & Educational Travel 4 Contemporary Features of Youth and Student Travel to the UK

Inbound youth travel to the UK intelligence on customers who of the customer decision- is much more diverse than the did not choose the UK as their making process, including how sector analysis based on the travel, study, or work destination. prospective customers select existing secondary sources. their destination, how resellers Through the application of an all- perceive marketing activities by inclusive approach, this research the UK, and many other areas. also targeted other sectors to In total, 336 gain a better understanding of This aggregated feedback from the current state of UK’s distinct organisations international organisations can youth and student travel industry. participated via an be used to improve the areas in question, making the UK more This chapter introduces the online questionnaire attractive to international youth results of global-scale primary as well as qualitative and student travellers. research on organisations sending youth travellers abroad in-depth interviews. as well as UK organisations Participating institutions receiving them. represented 60 countries The research queried a and a minimum of representative sample of inbound UK providers 1.5 million youth and (predominantly BETA student travellers member organisations), as worldwide. well as international sending organisations (representing a significant proportion of youth and student travellers traveling abroad; the younger the Based on this survey, the customer, and the further away profile of the average youth that he or she comes from, the and student traveller to the UK more likely they are to use a local was developed to assist the sending organisation, or teacher, organisations in visualising their to help arrange the trip). potential customers, and thus better aligning their service to Furthermore, insights from their customers’ preferences. sending organisations, such as outbound tour operators, travel The resulting overview reveals and education agencies, etc., customer preferences, also provide ever-important depicts individual stages

Unlocking the Value of Youth, Student & Educational Travel BETA 37 Age Segments

AGE AGE BREAKDOWN OF CUSTOMERS AT THE RESPONDING INBOUND UK UK is a youth-travel friendly GROUPS PROVIDERS destination, even when it comes to the youngest 4% students. From the responses Over 35 years old acquired through the survey, 15% 51% of youth and student travellers at responding organisations were juniors. 25 - 35 years old 29% As young people tend to go abroad at an earlier age, the UK promotes itself as a great 18 - 24 years old first choice for parents wishing to provide their children with a 43% travel abroad experience.

Furthermore, trend data provided for the past three 8% 13 - 17 years old years suggests that the share of juniors (youth visitors aged Up to 12 years old below 18 years) continues to increase for language school operators. Source: BETA & StudentMarketing survey of inbound UK providers, n=57; Note: Percentages do not add up to 100% due to rounding.

AGE BREAKDOWN OF CUSTOMERS AT THE RESPONDING INBOUND UK PROVIDERS BY SEGMENT

Up to 12 13 - 17 18 - 24 25 - 35 Over 35 years old years old years old years old years old Accommodation 3% 29% 44% 18% 5% Incoming tour operators 3% 41% 31% 18% 7% Higher education 0% 9% 74% 12% 5% Language schools and summer camps 18% 62% 10% 8% 1%

Activity Holiday/ School trips/ 7% 57% 10% 23% 3% Cultural exchange

Source: BETA & StudentMarketing survey of inbound UK providers, n=57 Note: Percentages do not add up to 100% due to rounding.

38 BETA Unlocking the Value of Youth, Student & Educational Travel 4 Contemporary Features of Youth and Student Travel to the UK

Customer Preferences

TOP PREFERRED LOCATIONS SPOTS IN THE UK

Edinburgh 50.0%

York 17.3% Manchester 34.6% Liverpool 21.2%

Cambridge 40.4%

Oxford 57.7% London 96.2% Bath 30.8% Stonehenge 17.3% Brighton 34.6%

Source: BETA & StudentMarketing survey of inbound UK providers, n=52; multiple options possible

Mainstream destinations still the UK as part of the youth viewpoint of travel to UK (London, dominate the preferred list experience. The UK may focus theatre, etc.). of places and London is by on the “day trips” that students far the most popular place can make if they are based in The average length of stay was to visit. Although in-depth London so they see more of the found to be 8.2 weeks (across interviews underlined that there country. Moreover, inbound UK all sectors). Naturally, there are are no signs that London’s organisations continue to build significant variations for each supremacy among student awareness of lower cost cities segment. For instance, in more preferred locations is going to where London could represent short-term segments such as end any time soon, locations a day trip from that particular school trips and junior language outside London were generally destination and students could travel, youth travellers stayed perceived as more safe and take advantage of lower hotel on average 1 and 1.9 weeks affordable (key selling points for costs. By offering young travellers respectively. The highest length organisations operating outside volunteer work or sustainable of stay was found in work and London). tourism components, the UK higher education sectors (over could create an authentic one year). Accommodation The insights further outline experience that is “new” for providers reported an average opportunities to increase students and teachers alike, who of 5.5 nights spent in their promotion of other parts of may otherwise have a traditional establishments across the UK.

Unlocking the Value of Youth, Student & Educational Travel BETA 39 ACCOM- PERCENTAGE OF CUSTOMERS STAYING IN THE FOLLOWING The majority of young and MODATION ACCOMMODATION TYPES IN THE UK student travellers prefer to stay in organised, controlled areas. Long-term students and juniors 38% 18% 12% (below 18 years old) often choose between a student residence and homestay; while for short-term travellers, hostels are more preferable than hotels and other types of Student Homestay Hostel accommodation offering daily residence/ rates. Halls of residence Rented apartments, or similar premises, are the last noteworthy option for students – all other 8% 7% 2% accommodation types, including sleeping over at a friend’s or relative’s place – were of negligible importance.

Hotel Rented flat/ Guest house/ apartment/ bed and house/chalet/ breakfast villa/bungalow/ cottage

1% 1% 13%

Own home/ Self-catering Other friend’s home/ relative’s home

Source: BETA & StudentMarketing survey of inbound UK providers, n=38

40 BETA Unlocking the Value of Youth, Student & Educational Travel 4 Contemporary Features of Youth and Student Travel to the UK

ACTIVITIES PREFERRED ACTIVITIES WHILE IN THE UK

82% Sightseeing 71% Excursions 57% Visiting museums/ 50% art galleries Visiting historic buildings

43% Eating/drinking local food/drink 29% 29% 29% 29% Attending live Attending the Special Visiting music/other theatre shopping a cathedral/ 25% church festivals/fairs Visiting parks/ gardens 23% 21% 20% Partying/ Visiting Attending nightlife countryside/ live sporting villages events

11% Visiting zoos/ aquariums 9% 9% 7% 7% Visiting 9% Long walks/ Water sports Horseback friends/ Other hikes/ riding family rambles 4% Cycling/ 2% 2% Mountain Wildlife Fishing biking watching

Source: BETA & StudentMarketing survey of inbound UK providers, n=56; multiple options possible

Unlocking the Value of Youth, Student & Educational Travel BETA 41 Given the relatively young to its perception of being a A deeper analysis of the age of travellers, the most distinguished destination, full of various age groups brought important activities were closely history. Activities that primarily to light significant variations in connected to cultural immersion involve leisure (shopping), or terms of activities they preferred. (sightseeing, excursions), and having fun (partying/nightlife), trying the local cuisine. The were not so popular. Adventure- experiential nature of trips to like activities were the last on the the UK is closely connected list.

Younger Older

Horseback riding Cycling/Mountain biking

Visiting zoos/aquariums Long walks/hikes/rambles

Shopping Visiting friends/family

Partying/Nightlife

Attending live music/ other festival/fairs

42 BETA Unlocking the Value of Youth, Student & Educational Travel 43 Factors of Importance in Decision-making

International organisations PERCENTAGE OF UNDECIDED CUSTOMERS also helped create the profile of youth travellers – overall, in 54% 39% 37% 32% terms of decision-making, and UK-specific, when looking at motivational factors.

The results point to the fact that a significant proportion of Programme Destination Accommodation Programme young travellers are undecided provider type type when they initiate contact with a sending organisation or travel supplier. Despite doing their own Source: BETA & StudentMarketing survey of international organisations, n=136; research, as many as one third multiple options possible of young people seek counsel on which programme type to choose. Furthermore, more than The results also draw attention to operate as a local in-country half do not initially know about a the importance of third-party re- point of contact, information specific provider/brand they will sellers in the decision-making of source and oftentimes, the end up travelling with. youth and student travellers, who booking channel.

AVERAGE DECISION-MAKING PERIOD TO SELECT A DESTINATION Since making the initial approach with a sending organisation, it usually takes up to one month 5% to decide on the trip destination. More than 6 months 12% Young people do not tend to over plan their travel – 5% 3 months - 6 months require more than 6 months to 26% make up their minds about their destination.

50% 1 month - 2 months

8% 1 week - 1 month

Less than 1 week

Source: BETA & StudentMarketing survey of international organisations, n=145 Note: Percentages do not add up to 100% due to rounding.

44 BETA Unlocking the Value of Youth, Student & Educational Travel 4 Contemporary Features of Youth and Student Travel to the UK

FACTORS OF IMPORTANCE WHEN SELECTING A DESTINATION Credentials of the destination (reputation, previous participant 17% 17% 55% 12% satisfaction, awards, etc.) as well as the location itself were confirmed to be of secondary importance to youth travellers. Sending organisations reported that a majority of their customers were primarily driven by trip Credentials Location Price Other costs. ‘Other’ responses included safety, programme quality, and agency recommendation. Source: BETA & StudentMarketing survey of international organisations, n=145 Note: Percentages do not add up to 100% due to rounding. Moreover, this study revealed that while 21% of customers intended to choose the UK as REASONS CUSTOMERS DID NOT CHOOSE THE UK AS THEIR their first choice, they actually DESTINATION (IF THEY INTENDED TO DO SO IN THE BEGINNING) opted for a different destination in the end. This means that one in every five youth and student High living costs 52% travellers is potentially lost. 49% High programme price Further investigation led 44% High accommodation prices to insights from sending organisations which pointed 34% Strict visa policies to high costs being the single biggest deterrence for young 32% Economic difficulties in our country (purchasing power) people when choosing the UK 18% Negative impact of Brexit (in part a reflection of their own country’s economic woes). 13% High air and sea fare Safety or unsuitability of the UK as a travel destination was not 13% Insufficient value for money generally perceived as a hurdle. 10% No further study/progression prospects BETA’s report ‘At the Heart of The 5% Unsafe environment Global Youth Travel’, a consumer research project conducted 1% Unsuitable for touring in 2013, revealed that while the UK was expensive, it was Unsuitable for group travel 0% however worth the money. 70% 10% Other of young travellers stated that they planned to return to the UK within the next 5 years, further Source: BETA & StudentMarketing survey of international organisations, n=128; confirming the UK’s status as a multiple options possible multi-visit destination.

Unlocking the Value of Youth, Student & Educational Travel BETA 45 MOTIVATIONAL FACTORS TO VISIT THE UK AS A TOURIST

Attractive cities/towns

Interesting history/culture

Cultural immersion

Plenty of things to see and do

Safe and secure destination

Overall popularity of the UK as a destination

Beautiful scenery

Visiting the UK is a form of prestige in our country

Positive feedback from previous visitors

Suitable for touring

Broadening awareness of the world

Fun

Break from everyday life

Friendliness/hospitality

Environment

Attendance of events (e.g. a concert, sports match)

Competitively priced air and sea fares

Good all round value for money

Value/price

Good range of natural attractions

Natural, unspoilt environment

Easy, relaxed pace of life

Source: BETA & StudentMarketing survey of international organisations, n=49; multiple options possible

46 BETA Unlocking the Value of Youth, Student & Educational Travel 4 Contemporary Features of Youth and Student Travel to the UK

MOTIVATIONAL FACTORS TO STUDY IN THE UK

Native English environment

High quality education

Cultural immersion

Lifetime experience

Positive feedback from previous participants

Extra-curricular activities (sightseeing, excursions, etc.)

Better further study/progression prospects

Better employment prospects upon graduation/course completion

Research opportunities at UK universities

Lack of domestic schools/courses

Source: BETA & StudentMarketing survey of international organisations, n=88; multiple options possible

MOTIVATIONAL FACTORS TO WORK IN THE UK

Professional work experience

Lifetime experience

Better employment prospects in home country

Positive feedback from previous participants

Cultural immersion

Embracing a new skill

To pay for their stay in the UK

Lack of domestic opportunities to work

Higher salary than in home country

Immigration to the UK

Source: BETA & StudentMarketing survey of international organisations, n=26; multiple options possible

Unlocking the Value of Youth, Student & Educational Travel BETA 47 Booking Channels

The research initiative also making a booking through an programme breakdown. The looked at how youth and intermediary) was found to be sample for work programmes student travellers book their 47% and 53%. was insufficient when preparing programmes in the UK. On a similar overview. average, the split between direct Below is an overview of and indirect bookings (a traveller each booking channel and

PERCENTAGE OF CUSTOMERS BOOKING LEISURE PERCENTAGE OF CUSTOMERS BOOKING A STUDY TRAVEL PROGRAMMES IN THE UK THROUGH THE PROGRAMME IN THE UK THROUGH THE FOLLOWING FOLLOWING CHANNELS CHANNELS

Other Online travel agency 4% (e.g. Expedia) Walk-in 5% 4% Indirectly - Tour Directly - Email Partnerships with local operator educational institutions 25% Direct booking 23% 1% Directly - Email 35% GovernmentDirectly - Phone Direct booking Indirectly - scholarshipsDirectly - Walk-in Education agency Government scholarships Third-party Directly - Phone 4%Directly - Website website Indirectly - Local travel agency Partnerships with local educational institutions 8% Indirectly - Third-party website (online portal) Walk-in 2% Other Directly - Walk-in Indirectly - Tour operator Online travel agency (e.g Expedia) 2% Indirectly - Local travel agency Directly - Website Education agency 22% 13% 52%

Source: BETA & StudentMarketing survey of inbound UK Source: BETA & StudentMarketing survey of inbound UK providers, n=13 providers, n=22; the data includes higher education institutions, language schools, and summer school/camp organisers

The international sector in the UK with them). Therefore, students application process. is quite dependant on third-party and their parents often seek distribution partners, with more additional professional advice Government scholarships than half of the bookings coming from a local representative. remain a considerable source from education agencies. of bookings, although many The use of intermediaries is also important schemes have This is due to a complicated important as a large proportion recently been facing drastic cuts visa process and educational of customers, or in the case of (the Italian PON scholarship, programmes often representing these programmes, parents, do KASP for Saudi Arabian students, a one-time purchase (and not have a sufficient command and the Brazilian Science Without thus the high cost associated of English to complete the visa Borders programme).

48 BETA Unlocking the Value of Youth, Student & Educational Travel 4 Contemporary Features of Youth and Student Travel to the UK

PERCENTAGE OF CUSTOMERS BOOKING NUMBER OF RE-SELLERS/PARTNER AGENTS ACCOMMODATION IN THE UK THROUGH THE FOLLOWING CHANNELS None Other Over 200 2% Directly - Email 1% 18% 15% Less than 10 151 - 200 12% Indirectly - Directly - Phone Travel agent 2%Directly - Email None 7% 10 - 20 Less than 10 26% 101 - 150 Directly - Walk-in Directly - Phone 11% 10 - 20 4% 21 - 50 5% Directly - Walk-in 51 - 100 101 - 150 151 - 200 Directly - Website Directly - Website Indirectly - 51 - 100 Over 200 22% 21 - 50 Third-party 25% 28% website Indirectly - Mobile 24% application 1%

Source: BETA & StudentMarketing survey of inbound UK Source: BETA & StudentMarketing survey of inbound UK providers, n=15 providers, n=56 Note: Percentages do not add up to 100% due to rounding. Note: Percentages do not add up to 100% due to rounding.

The accommodation sector overseas partners (2%). In 2015, in making more individual featured the most diverse range the average partner network bookings. As of the time of this and usage of booking platforms was composed of 91 resellers. research (Q4 2016), the ratio for travellers to the UK. The of individual to group bookings existence of rating portals, and Over the last 3 years, there stood at 1:1. a much easier decision-making has been a growing tendency process in comparison to the previous two sectors, means providers are used to a number PROPORTION OF INDIVIDUAL VS GROUP BOOKINGS of different booking platforms. For instance, a significant 100% number of people still rely on booking through email or phone, 80% Group which implies excellent customer Group 60% bookings service (quick response times) bookings in the accommodation sector as 40% Individual well. Individual 20% bookings bookings Correlating with a relatively high 0% usage of overseas partners, 2013 2014 2015 2016 (to date) only a handful of inbound UK providers do not work with Source: BETA & StudentMarketing survey of inbound UK providers, n=44

Unlocking the Value of Youth, Student & Educational Travel BETA 49 Opportunities and Challenges

OPPORTUNITIES FOR INBOUND UK PROVIDERS TO GROW Inbound UK providers see more opportunities Adoption of new marketing techniques/platformsAdoption of new… in the adoption of new marketing platforms Adoption of Adoptionnew technologies of new… and technologies rather NewNew markets markets than expansion through NewNew products products introducing new products, New customer segments (e.g.New more customer… juniors) entering new markets or approaching new customer Increasing perIncreasing capita income per… segments. Furthermore, Increasing the length of stayIncreasing of existing the customers length… upsell techniques, such as Achieving economiesAchieving… of scale increasing the length of MoreMore packaging packaging stay, packaging (including extra services to standard IncreasingIncreasing internal efficiency internal… trip components), and Mergers & acquisitionsMergers &… increasing per capita OtherOther income, were not deemed as effective by the majority 0%0% 20%10% 40% 20%60% 30% of respondents.40% 50% Even less60% importance was placed Source: BETA & StudentMarketing survey of inbound UK providers, n=52; on growth through internal multiple options possible consolidation.

Businesses of all sizes focus on new marketing MOST IMPORTANT OBSTACLES INBOUND UK PROVIDERS FACE techniques/platforms to grow. Organisations with StrictStrict visa visa policies policies more years of experience CurrencyCurrency fluctuation fluctuation in the industry focus on new markets to move NegativeNegative impact impact of Brexit of… to, while younger ones Lower price inLower other price destinations in other… focus on introducing new Parents'Parents' fears fears product and attracting new Lack of support Lackfrom ofthe support government from… customers. Safety-relatedSafety-related… concerns Strict visa policies and Economic difficulties in our countryEconomic (purchasing difficulties… power) currency fluctuations were Lack of customerLack interest of customer… in the UK the most frequently cited DistanceDistance to to the the UK UK obstacles hampering Weak market offering/advertisingWeak market… organisations from further growth. As many as 80% of Increased provision of domestic learningIncreased in our provision… country organisations employ EU Cutbacks in government Cutbacksscholarships in… staff. RegulatoryRegulatory changes changes OtherOther

0%0% 20%10% 40%20% 60% 30% 40% 50% 60%

Source: BETA & StudentMarketing survey of inbound UK providers, n=50; multiple options possible

50 BETA Unlocking the Value of Youth, Student & Educational Travel 4 Contemporary Features of Youth and Student Travel to the UK

The research revealed that the exhibited the lowest ratio. average share of EU employees in the total workforce stood at In fact, Brexit would put in 33%, the highest being employed question 1,404 employees, by incoming tour operators, solely at the institutions that while English language schools participated in the research.

THE IMPACTS OF THE REFERENDUM ON BREXIT ACCORDING TO INBOUND UK PROVIDERS

IncreasedIncreased by overIncreased by10% 6%Increased -10% by 3%No - 5%by change 1% Decreased- 2% Decreased by 1%Decreased - 2% by 3%Decreased - by5% 6% - by10% over 10%

NumberNumber of cancellations of cancellations IncreasedIncreased by over by 10% over 10%

NumberNumber of bookings of bookings IncreasedIncreased by 6% by-10% 6% -10%

IncreasedIncreased by 3% by- 5% 3% - 5% NumberNumber of enquiries of enquiries IncreasedIncreased by 1% -by 2% 1% - 2% 0% 0%10% 10%20% 20%30% 30%40% 50%40% 60%50% 70%60% 80%70% 90%80% 100%90% 100%

Source: BETA & StudentMarketing survey of inbound UK providers, n=50

While organisations continue to Favourable exchange rates bookings, with 12% of providers be vigilant of the uncertainties enabled programme offerings noting 10%+ increases in around Brexit and its possible of UK providers to become bookings. This compares to 20% impacts, the survey showed that more price-competitive, which of organisations facing a decline since the announcement of the in turn generated an uptake of since the Referendum. results of the Referendum, the interest in the UK among young situation has remained largely people and students alike. The Cancellations were the stable, with the immediate invigorated desire to travel to least affected indicator, effect being more positive the UK has translated into 30% of notwithstanding, 14% of inbound than negative. The prevailing providers experiencing a higher UK providers experienced an number of organisations have number of enquiries (in contrast increase. not experienced any change in to 14% reporting a decline). enquiries/bookings/cancellations within this period. The results for An even higher share of the rest, however, have been organisations (32%) reported mixed. an increase in the number of

Unlocking the Value of Youth, Student & Educational Travel BETA 51 BARRIERS THAT PREVENT INTERNATIONAL ORGANISATIONS FROM SENDING The research also evaluated MORE YOUTH AND STUDENT TRAVELLERS TO THE UK factors that hamper international organisations’ ability to send more students Lower price in other… Lower price in other destinations to the UK and looked at CurrencyCurrency fluctuation fluctuation agencies from a business Economic difficulties in our countryEconomic (purchasing difficulties… power) growth perspective. Strict visa policies Strict visa policies Although the negative effect NegativeNegative impact impact of Brexit of… of a possible Brexit scored Parents'Parents' fears fears high, international sending organisations did not panic. Lack of support from theLack UK of as support a destination from… RegulatoryRegulatory changes changes Lack ofLack customer of customer… interest Safety-relatedSafety-related… concerns Cutbacks in government Cutbacksscholarships in… Increased provision of domestic learningIncreased in our provision… country DistanceDistance to to the the UK UK OtherOther

0%0% 20%10% 40%20%60% 30% 40% 50% 60%

Source: BETA & StudentMarketing survey of international organisations, n=95; multiple options possible

DOES YOUR ORGANISATION PLAN TO STOP PROMOTING THE UK AS A DESTINATION AFTER BREXIT?

5% 89% 6% ? Yes No I don’t know

Source: BETA & StudentMarketing survey of international organisations, n=96

52 BETA Unlocking the Value of Youth, Student & Educational Travel 4 Contemporary Features of Youth and Student Travel to the UK

CANCELLATIONS AFTER THE REFERENDUM ON BREXIT

5% 4% 3% Over 10% 6% - 10% 1% - 5% fewer fewer fewer No change 1% - 5% 6% - 10% Over 10% 1% 78% more more more 3% 5%

Source: BETA & StudentMarketing survey of international organisations, n=95 Note: Percentages do not add up to 100% due to rounding.

BOOKINGS AFTER THE REFERENDUM ON BREXIT

7% 6%

4% Decreased by more Decreased Decreased than 10% by 6% - 10% by 1% - 5% No change Increased Increased Increased 58% by 1% - 5% by 6% -10% by more than 10% 4%

6%

14%

Source: BETA & StudentMarketing survey of international organisations, n=96 Note: Percentages do not add up to 100% due to rounding.

Unlocking the Value of Youth, Student & Educational Travel BETA 53 Market Trends

Recent years have seen the EXPECTED DEVELOPMENT IN STUDENT NUMBERS 2015 V 2016 UK’s international youth and student travel market cope with vast changes in its visa policy, economic factors, such as

currency fluctuations, economic IncreaseIncrease by overIncrease by10% 6% -10%Increase by 3% -No 5%by change 1% -Decrease 2% Decrease by 1% -Decrease 2% by 3% Decrease- by5% 6% - by10% over 10% challenges in important source markets, etc.

One of the research’s objectives Increase by more than was to find how these changes 10% influence overall market Increase by 6% - 10% performance, assess UK business sentiment, and analyse the Increase by 3% - 5% trends contributing to the future 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% of the UK as a youth, student and educational travel destination. Source: BETA & StudentMarketing survey of inbound UK providers, n=55 Some of these trends are in line with the overall development observed in the industry, such as EVOLUTION OF DEMAND FOR THE UK AS A YOUTH AND STUDENT young people going abroad at TRAVEL DESTINATION an increasingly earlier age; while others are direct results of the currency rate exchanges, such as decreasing length of stay in the UK. IncreaseIncrease by overIncrease by10% 6% -10%Increase by 3% -No 5%by change 1% -Decrease 2% Decrease by 1% -Decrease 2% by 3% Decrease- by5% 6% - by10% over 10% In general, UK providersOver the were past 3 years quite positive about 2016, with 56% suggesting a growth in the OVER THE PAST THREE YEARS number of youth and student travellers from abroad.Over the next 3 years Over the past 3 years Data collected as part of the comparison suggests that Over the past 3 years 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% businesses expectOver more the dynamic past 3 years development in theOver near the future next 3 years than during the last three years. OVER THE NEXT THREE YEARS Just above 55% of responding organisations experiencedOver the nextan 3 years Over the next 3 years 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% increase over the last three years.

In comparison to that, 70% more 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% organisations trust that the 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% demand for the UK will increase in the next three years. Source: BETA & StudentMarketing survey of inbound UK providers, n=53

54 BETA Unlocking the Value of Youth, Student & Educational Travel 4 Contemporary Features of Youth and Student Travel to the UK

DEMAND DEVELOPMENT FOR THE UK AS REPORTED BY INTERNATIONAL ORGANISATIONS PER SECTOR

IncreasedIncreased by overIncreased by10% 6%Increased -10% by 3%No - 5%by change 1% Decreased- 2% Decreased by 1%Decreased - 2% by 3%Decreased - by5% 6% - by10% over 10%

Leisure Travel Volunteer Programmes Increased by more than 10% Youth Travel Mobility Programme Increased by 6% - 10% Vocational Courses Increased by 3% - 5% Pathway Programmes Language Travel Increased by 1% - 2% Higher Education Stayed the same High School Programmes Au Pair Decreased by 1% - 2% (2013 V 2016) Adventure Travel Decreased by 3% - 5% School Trips Decreased by 6% - 10% Internships Decreased by more than 10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Leisure Travel Volunteer Programmes Increase by over 10% Youth Travel Mobility Programme Increase by 6% -10% Vocational Courses Increase by 3% - 5% Pathway Programmes Language Travel Increase by 1% - 2% Higher Education It will stay the same High School Programmes Au Pair Decrease by 1% - 2% (2016 V 2019) Adventure Travel Decrease by 3% - 5% School Trips Decrease by 6% - 10% Internships Decrease by over 10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Source: BETA & StudentMarketing survey of international organisations, n=103; n=102

Unlocking the Value of Youth, Student & Educational Travel BETA 55 Feedback from organisations higher programme and living increase in product packaging. helped quantify the influence costs meant customers of some of the major trends increasingly opted for shorter Amongst other notable trends shaping the development stays in the UK and travelled to were shorter lead times to of the UK’s attractiveness as the UK in smaller groups than the making travel decisions, a destination. Cost-driven case 3 years ago. and customers believed to customers looking for cheaper be increasingly turning to options was a clear trend seen Age-wise, inbound UK providers technology to seek advice among inbound UK providers. confirmed a rise in the proportion instead of more personal of younger travellers, which is contact. The strong pound and thus closely tied with the reported

COMPARED TO THE PREVIOUS 3 YEARS, DO YOU SEE ANY OF THE FOLLOWING TRENDS WITH REGARD TO THE UK? Yes No I don’t know

MoreMore younger younger customers customers MoreMore older older customers customers LessLess demand demand for for packages packages MoreMore demand demand for for packages packages MoreMore demand demand for for premium premium programmes programmes MoreMore demand demand for for cheaper cheaper programmes programmes Customers turn to Customerstechnology turnless tooften technology than to personalless often advice than… Customers turn to Customerstechnology turnmore to oftentechnology than to more personal often advice than… CustomersCustomers travel travel in in larger larger groups groups CustomersCustomers travel travel in in smaller smaller groups groups CustomersCustomers travel individually travel individually more often more than often in a groupthan… CustomersCustomers travel in a grouptravel inmore a group often more than oftenindividually than… Customers opt for more non-traditionalCustomers opt destinationsfor more non-traditional… within the UK Customers opt for more mainstreamCustomers opt destinations for more mainstream…within the UK CustomersCustomers opt opt for for longer longer programmes/stays programmes/stays CustomersCustomers opt opt for for shorter shorter programmes/stays programmes/stays CustomersCustomers decide decide shorter shorter CustomersCustomers decide decide longer longer Customers are more driven by costscost Customers are less driven by costscost

0%0% 10% 20% 30% 20%40% 50% 60% 70%40%80% 90% 100% 60% 80% 100%

Source: BETA & StudentMarketing survey of inbound UK providers, n=53

56 BETA Unlocking the Value of Youth, Student & Educational Travel 4 Contemporary Features of Youth and Student Travel to the UK

The same question was also posed to sending organisations.

The research yielded almost identical results – the only disharmony between UK and international organisations was that, according to international senders, customers take more time to decide on their travel.

COMPARED TO THE PREVIOUS 3 YEARS, DO YOU SEE ANY OF THE FOLLOWING TRENDS WITH REGARD TO THE UK? Yes No I don’t know

MoreMore younger younger customers customers MoreMore older older customers customers LessLess demand demand for for packages packages MoreMore demand demand for for packages packages MoreMore demand demand for for premium premium programmes programmes MoreMore demand demand for for cheaper cheaper programmes programmes Customers turn to Customerstechnology turnless tooften technology than to personalless often advice than… Customers turn to Customerstechnology turnmore to oftentechnology than to more personal often advice than… CustomersCustomers travel travel in in larger larger groups groups CustomersCustomers travel travel in in smaller smaller groups groups CustomersCustomers travel individually travel individually more often more than often in a groupthan… CustomersCustomers travel in a grouptravel inmore a group often more than oftenindividually than… Customers opt for more non-traditionalCustomers opt destinationsfor more non-traditional… within the UK Customers opt for more mainstreamCustomers opt destinations for more mainstream…within the UK CustomersCustomers opt opt for for longer longer programmes/stays programmes/stays CustomersCustomers opt opt for for shorter shorter programmes/stays programmes/stays CustomersCustomers decide decide shorter shorter CustomersCustomers decide decide longer longer CustomersCustomers are are more more driven driven by by costs costs CustomersCustomers are are less less driven driven by by costs costs

0%0% 10% 20% 30% 20%40% 50% 60% 70%40%80% 90% 100% 60% 80% 100%

Source: BETA & StudentMarketing survey of international organisations, n=102

Unlocking the Value of Youth, Student & Educational Travel BETA 57 UK’S COMPETITIVENESS IN THE GLOBAL CONTEXT

58 BETA 5Unlocking the Value of Youth, Student & Educational Travel 5 UK’s Competitiveness in the Global Context

This chapter elaborates on where the UK sits in comparison to its competitors, and where it can, as a youth and student travel destination, do better. As part of the global scoping, this initiative dived deeper into how the UK is perceived by sourcing promotion levels and perceptions of international sending organisations.

DO YOU PROMOTE THE UK AS A YOUTH AND STUDENT TRAVEL The UK is heavily promoted DESTINATION? by international organisations, with 91% of organisations offering youth and student 91%Yes Yes travel programmes to its destinations. This finding is in line with current state of UK No - we used to, but not any longer1% No - we used to, but not any longer market maturity. The reasons for not promoting the UK were currency fluctuations, cutbacks in No - we have never promoted programmes in the 3%UK No - we have never promoted programmes in the UK government scholarships and a No - but we plan to promote programmes in the UK in the lack of support from the UK as a future 5% No - but we plan to promote programmes in the UK in the future destination.

Source: BETA & StudentMarketing survey of international organisations, n=230

PERCENTAGE OF PROGRAMMES PROMOTED – OVERALL AND IN THE UK Diving deeper into the promotion levels of individual programmes, the UK is generally well- Value Overall In the UK promoted across the whole Adventure Travel 25.3% 20.6% spectrum of youth and student travel programmes. The only Au Pair 17.5% 9.1% exceptions to this were found to be some work experience Primary and Secondary Education 57.2% 51.7% programmes – Au Pair and Higher Education 54.6% 50.2% Internships. Internships 34.5% 22.5% Language Travel 79.9% 77.5% Leisure Travel 26.6% 25.8% Pathway Programmes 36.2% 30.1% School Trips 40.2% 38.3% Vocational Courses 31.0% 25.4% Volunteer Programmes 21.0% 7.2% Other 10.5% 7.2%

Source: BETA & StudentMarketing survey of international organisations, n=209

Unlocking the Value of Youth, Student & Educational Travel BETA 59 NUMBER OF INBOUND UK PROVIDERS PROMOTED In terms of peer-to-peer relationships BY INTERNATIONAL ORGANISATIONS with overseas partners, the majority of sending organisations represent Over 200 less than 10 inbound UK providers. 2% While educational travel-focused organisations tend to have more 151 - 200 partners in the UK, niche programmes, 1% such as volunteering, are less 101 - 150 well represented. This is, however, 2% connected to the small supply of volunteering programmes in the UK, Less than 10 51 - 100 rather than a gap in representation. 42% Less than 10 10 - 20 7% 21Sending - 50 organisations51 - 100 also revealed youth and student flows by sharing 21 - 50 101their - 150 customers’ 151destination - 200 preferences. The infographics displays 25% Overthe number200 of organisations having 10 - 20 a respective destination among top 22% 10 most-preferred customer places. The research confirmed that the UK is Source: BETA & StudentMarketing survey of international organisations, n=209 indeed a very popular destination. Note: Percentages do not add up to 100% due to rounding. The results complement the findings of BETA’s ‘At the Heart of Global Youth Travel’ report, which stated that PREFERRED DESTINATIONS (SCORE RATING) other destinations youth travellers considered visiting, as an alternative to the UK, were France (37%), USA (28%), Italy (27%) and Germany (23%).

When comparing the results with the 2011 ‘Britain’s Shining Opportunity’ UK USA Canada Ireland Germany report, the main competitors to the 125 85 56 50 45 UK have remained the same - USA, Canada, France, Australia and Ireland. However, Canada, previously occupying the 5th place in the ranking, has jumped to the 2nd spot.

While the battle with Europe is for Australia Spain France Malta New Zealand culture, the battle with the USA 41 30 28 27 26 is for education. The data from international sending organisations Source: BETA & StudentMarketing survey of international organisations, suggests that Canada has joined the n=134 race in the latter.

60 BETA Unlocking the Value of Youth, Student & Educational Travel 5 UK’s Competitiveness in the Global Context

WHAT WOULD HELP THE UK STAY COMPETITIVE

More friendly visa application process

More UK coverage in foreign media

More government funding

Creation of a specialist partner scheme for organisations promoting youth and student travel to the UK

More synergy between providers and suppliers to create interesting packages for young people

More synergy among UK associations

More destination marketing by government agencies

More joint marketing by youth and student travel organisations (e.g. trade mission to a specific market)

More support from local DMOs

More private investments in the sector

Source: BETA & StudentMarketing survey of inbound UK providers, n=51; the more stars, the more helpful the initiative was deemed among respondents

Inbound UK providers media across source markets as mostly complained about the acknowledge that competitors a means of conveying positive government visa policy, negative can eat into the UK’s market share messaging and portraying the UK image of the UK and uncertainty thanks to a better approach as a welcoming place to travel, related to Brexit. to marketing as a country study or work in. destination. The important Most frequently cited factors message from UK providers The feedback sourced via among sending organisations is that more than investment, in-depth interviews further were lower costs/waiving coordinated efforts from the top showed that the majority of unnecessary fees, unfriendly visa are necessary. They also call for those who believed that the policy and the provision of work more positive coverage in the UK lags behind its competitors, rights to international students.

Unlocking the Value of Youth, Student & Educational Travel BETA 61 COMPARISON OF SELECTED VISA APPLICATION PROCESSES

Average visa Visa Visa type processing Application approval for language learners time (days) fee rate Ability to work while studying

Student visa (Subclass 500) 29 A$550 90% Up to 20 hrs per week Visitor visa (Subclass 600 - Tourist) 20 A$135 93% Not permitted Australia Permitted to students at post-secondary level and to 5 weeks and Study permit CA$150 73% students learning English at public universities prior to 3 days becoming full time student

Canada Visitor visa 17 CA$100 80% Not permitted

Long stay ‘D’ visa single entry 40 € 100 87% Up to 20 hrs per week (study time) up to 40 hrs (holiday) (Student visa)

Ireland Short stay ‘C’ visa (Visitor visa) 40 € 60 - Not permitted

Long stay ‘D’ visa single entry - € 100 - Up to 20 hrs per week (study time) up to 40 hrs (holiday) (Student visa) Malta Short stay ‘C’ visa (Visitor visa) - € 60 - Not permitted

Visitor visa (for the purpose of study 20 - 25 from NZ$130 95% Not permitted for less than 3 months) New

Zealand Student visa 20 - 25 from NZ$195 77% Up to 20 hrs per week (study time) up to 40 hrs (holiday)

depending depending Study visa on source on source - Up to 20 hrs per week country country South Africa depending depending Visitor visa on source on source - Not permitted country country

Standard visitor visa 15 £87 - Not permitted Short-term study visa (6 month adult) 15 £89 - Not permitted

UK Short-term study visa (child) 15 £89 - Not permitted Short-term study visa (11 month adult) 15 £170 - Not permitted Tier 4 visa 15 £328 90% Up to 10 or 20 hrs per week (study time) up to 40 hrs (holiday)

Permitted to work on-campus in the first academic year. F-1 Student visa 1 US$160 72% After the first academic year, students may engage in off- USA USA campus employment via Optional Practical Training.

Source: Australian Department of Immigration and Border Protection, 2017; Immigration, Refugees and Citizenship Canada, 2017; Irish Naturalisation and Immigration Service, 2017; Government of Malta, 2017; Immigration New Zealand, 2017; South African Department of Home Affairs, 2017; UK Home Office, 2017; US Department of State, 2017; The Pie News, 2017

62 BETA Unlocking the Value of Youth, Student & Educational Travel 5 UK’s Competitiveness in the Global Context

DOES YOUR ORGANISATION RECEIVE ANY SUPPORT FROM DMO’S The lack of support from a local IN THE REGIONS WHICH YOU OPERATE? DMO, as stated by a majority of respondents points to the overall observation that while individual No59% No organisations do a lot of outreach and promotion, orchestrated efforts Yes – DMOs promote the UK through digital media33% Yes – DMOs promote the UK through digital media from a DMO level are not wide- spread. Respondents called for Yes – DMOs promote the UK through trade Yes – DMOs promote the UK through trade fairs/workshops/road 33% youth and student travel to have a fairs/workshops/road shows/meetings/incentive … shows/meetings/incentive conferences/seminars louder voice, especially in places Yes – DMOs promote the UK through regular print media (e.g Yes – DMOs promote the UK through regular print media where organisations’ own resources 24% brochures) (e.g brochures) do not stretch.

Yes – DMOs promote the UK throught social media22% Yes – DMOs promote the UK throught social media

Yes – DMOs promote the UK by hosting familiarisation tours for Yes – DMOs promote the UK by hosting familiarisation tours for 17% journalists and travel industry personnel (e.g. agents) journalists and travel industry personnel (e.g. agents)

Yes – DMOs promote the UK by various sponsorships9% Yes – DMOs promote the UK by various sponsorships

Source: BETA & StudentMarketing survey of inbound UK providers, n=46; multiple options possible

DESTINATION MARKETING BY THE UK (2013 V 2016) An assessment of international organisations showed that the majority think that the UK has remained competitive. However, 18% The UK promotes itself better than its 29% felt that other destinations are main competitors increasingly promoting themselves in a more effective manner than the UK.

53% Inbound UK providers agreed that The ‘GREAT’ Britain campaign The UK has remained builds interest as well as loyalty. competitive Organisations appreciate 29% promotional efforts by VisitBritain and English UK. Moreover, there is a wide-spread opinion among Other destinations promote inbound UK providers that these themselves better than the UK activities could be further enhanced by more industry-specific marketing efforts specifically Source: BETA & StudentMarketing survey of international organisations, n=102 targeting the youth demographic.

Unlocking the Value of Youth, Student & Educational Travel BETA 63 Conclusions

The UK is an innate crowd Thus, an infrastructural tours) and outward missions pleaser when it comes to youth comparison of the UK and its (trade missions) alike. To and student travel. Vice versa, major competitors identifies maintain competitiveness, 6-10 the segment is equally important something that could be events should be organised to the UK for a variety of reasons: described as a ‘responsibility per annum. These need to direct and indirect economic vacuum’. The UK does not target youth and student travel benefits, supply of skilled labour employ a central organisation agencies and student tour and a source of talent, social that would drive forward operators, who, as revealed in interactions benefiting local its development as the this research, encompass 53% communities, and an important premiere youth and student of all youth and student travel soft power tool. travel destination, spearhead bookings to the UK. promotional activities, and Despite all the challenges it pursue a dialogue with the Sector associations have been has faced in the past years government on behalf of the partially successful in delivering (Brexit, stricter visa policy whole industry. awareness campaigns and than competitors, currency organising trade events in fluctuations), youth and student Furthermore, the research also overseas markets. Nonetheless, travel to the UK has maintained indicates that the UK would without government support, its momentum and constitutes a not only benefit from a youth- it will be increasingly difficult £22.3 billion a year industry. specific nationwide body to offer a value proposition or strategy targeting youth (which inherently includes entry Nevertheless, inbound youth travellers in particular, but also conditions) comparable to and student visitor statistics are increased presence in key source that of the above-mentioned increasingly suggesting that countries and regions, especially destinations. the UK is falling behind other Asia and Latin America. There destinations. Reporting by ONS, is a need for more campaigns, Excluding international students sector associations, and other like ‘English is Great’ in Brazil, to from net migration and the stakeholders implies that the UK be strategically deployed to provision of work experience is losing its hard-won market counter the effects of greater opportunities is not going to share to its competitors. competition, and level the give the UK a competitive edge playing field for British institutions – it will mean that the UK, yet In fact, the UK is already unable to compete in overseas markets. again, just meets the industry to compete with the USA, The shift in marketing focus is standard and is reactive in its Canada, Australia, or Ireland, and becoming more of a necessity policies. However, marketing in there is sound reasoning for the since Europe, presently the the right source countries with popularity of these destinations. main source region for the UK, growing young populations is gradually reaching saturation and conveying a consistent Over the past years, they have – both in terms of number of positive messaging will ensure equipped themselves with an travellers going abroad as well competitiveness for the future. attractive value proposition, as frequency of travel (number secured government support of tr per person). This long-term outlook towards to develop youth travel-friendly attracting youth travellers and policies, and prepped up their The UK needs more youth and having a coherent and strong marketing efforts to lure more student-specific events – both youth travel policy will benefit the young visitors. inward missions (familiarisation UK in the years to come.

64 BETA Unlocking the Value of Youth, Student & Educational Travel Unlocking the Value of Youth, Student & Educational Travel BETA 65 Appendix 1 Respondent Profile: Inbound UK Providers

The research reached out to a diverse pool of inbound UK providers in order to generate a relevant analysis of customer preferences, market trends and business performance indicators. Organisations featured in this research represented a total pool of 1,125,000 youth and student travellers, and which generated an average revenue of £6.8 million in 2015.

RESPONDING ORGANISATIONS BY PRIMARY BUSINESS FOCUS (INDUSTRY SECTOR)

0%

10% Language School

20%

Accommodation – Hostels 30%

40% Summer School / Camps

50% Incoming Tour Operator

60% Accommodation – Provider

70% Attraction / Venue / Restaurant Higher Education Institution School Travel Organisation 80% Homestay / Local Organiser Transport Provider Activity Holiday Provider 90% Cultural Exchange Organiser Youth & Student Travel Retailer Work Placement Provider (Internship, Tier 5) Other 100%

Source: BETA & StudentMarketing survey of inbound UK providers, n=106

66 BETA Unlocking the Value of Youth, Student & Educational Travel NUMBER OF CUSTOMERS SERVED IN 2015 Less than 100 8% More than 25,000 Less than 100 101 - 500 25% 101 - 500 7% 501 - 1,000 501 - 1,000 1,001 - 5,000 11% 10,001 - 25,000 5,001 - 10,000 13% 10,001 - 25,000 More than 25,000 5,001 - 10,000 1,001 - 5,000 14% 22%

Source: BETA & StudentMarketing survey of inbound UK providers, n=106

NUMBER OF OFFICES

More than 10 1 23% 30% 1 2-3 4-5 6 - 10 6-10 15% More than 10 4 - 5 2 - 3 11% 21%

Source: BETA & StudentMarketing survey of inbound UK providers, n=106

NUMBER OF YEARS IN BUSINESS Less than 3 years 5% 3 - 5 years Over 20 years 8% 50% Less than 3 years 6 - 10 years 3 - 5 years 14% 6 - 10 years 11 - 20 years Over 20 years 11 - 20 years 23%

Source: BETA & StudentMarketing survey of inbound UK providers, n=106

Unlocking the Value of Youth, Student & Educational Travel BETA 67 Appendix 2 Respondent Profile: International Organisations

Organisations responding to the quantitative survey catered to a total of 302,250 youth and student travellers in 2015. Among the survey participants were outbound tour operators, travel agencies, and education agencies (both off-shore and on-shore).

TOP SOURCE COUNTRIES OF RESPONDENTS

Over 5% 3.1% - 5% 2.1% - 3% 1.1% - 2%

Russia 9.1% China 4.8% Mexico 2.9% Canada 1.9% Italy 7.2% UK 4.8% Ukraine 2.9% Argentina 1.4% Turkey 7.2% Brazil 3.4% Germany 2.4% Ecuador 1.4% Spain 6.7% USA 3.4% India 2.4% Kazakhstan 1.4% France 5.3% Pakistan 2.4% Morocco 1.4% Vietnam 2.4%

1% and less

Armenia 1.0% Saudi Arabia 1.0% Egypt 0.5% Nigeria 0.5% Colombia 1.0% Switzerland 1.0% Georgia 0.5% Norway 0.5% Czech Republic 1.0% Thailand 1.0% Ghana 0.5% Oman 0.5% Ireland 1.0% Algeria 0.5% Greece 0.5% Paraguay 0.5% Latvia 1.0% Australia 0.5% Iran 0.5% Peru 0.5% Lebanon 1.0% Belgium 0.5% Jamaica 0.5% Portugal 0.5% Nepal 1.0% Bosnia and Japan 0.5% Slovakia 0.5% Netherlands 1.0% Herzegovina 0.5% Malta 0.5% South Korea 0.5% Philippines 1.0% Chile 0.5% Mauritius 0.5% Sri Lanka 0.5% Poland 1.0% Denmark 0.5% Mongolia 0.5% Uruguay 0.5%

Source: BETA & StudentMarketing survey of international organisations, n=208

68 BETA Unlocking the Value of Youth, Student & Educational Travel NUMBER OF OFFICES

More than 10 6%

6 - 10 2% 1 4 - 5 48% 9% 1.00 2-3 4-5 6-10

2 - 3 35%

Source: BETA & StudentMarketing survey of international organisations, n=231

NUMBER OF CUSTOMERS SERVED IN 2015

More than 10,000 5%

5,001 - 10,000 5%

2,001 - 5,000 2%

1,001 - 2,000 Less than 50 4% 26% Less than 50 501 - 1,000 51 - 100 101 - 250 4% 251 - 500 501 - 1,000 251 - 500 1,001 - 2,000 2,001 - 5,000 51 - 100 18% 5,001 - 10,000 21% 101 - 250 16%

Source: BETA & StudentMarketing survey of international organisations, n=230 Note: Percentages do not add up to 100% due to rounding.

Unlocking the Value of Youth, Student & Educational Travel BETA 69 BETA would like to thank our members and industry stakeholders that came together to support and sponsor this report and to StudentMarketing for their work in bringing this important data together.

70 BETA Unlocking the Value of Youth, Student & Educational Travel Copyright © 2017 British Educational Travel Association (BETA)

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Unlocking the value of yoUth, stUdent & edUcational traVel

Published and printed by the: British Educational Travel Association (BETA), London, UK

First printing 2017. All rights reserved

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