12
INTERVIEWS VIEWS
Asia’s international
school boom cools
by James Pomfret
ASIA’S breakneck growth was a
boon for international schools as
expatriates moved to the region
in droves bringing their school-
age children with them. But as
the economy cools so too has this
lucrative niche industry.
Turning over hundreds of
millions of dollars, in its heyday
Asia’s international schools
couldn’t keep up with demand
for places for the progeny of
business people relocated by
companies expanding their
interests in the region.
Fees that ranged from
US$20,000-US$50,000 (RM71,839
-RM179,598) per child per year
meant the private companies
that ran these schools were pull-
ing in handsome profits. Some
schools in Singapore charged
US$200,000 (RM718,463) just to
put names on waiting lists.
Now, as expatriates leave
China, Hongkong, Singapore
and other countries across the
region due to the financial crisis,
waiting lists for international
Under a cloud: Greece frets for tourist season
by Valentina Za and
Renee Maltezou
BELOW Athens’ lofty Acropolis,
taverna-owners chase after po-
tential customers strolling along
the stone-paved alleys of Plaka
past empty handicraft shops.
The season hasn’t started, but
the tourist industry is worried.
Holiday bookings – mainly
from Britain, Germany and,
lately, also eastern Europe – are
already down about 15% to 20%
from 2008, according to the Pan-
Hellenic Federation of Tourism
Enterprises (POET).
If recession-hit Europeans
continue to stay away from
Greece’s sun-bleached islands, it
would threaten a vital source of
income in a country where un-
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schools are getting shorter or
disappearing altogether as en-
rolments drop.
“In comparison with 12
months ago, we’ve seen a big
change,” said Lee Quane, the
Asia director for ECA Interna-
tional, which advises companies
on international assignments.
“Back then there was a lack
of availability (of school places)
or relatively long waiting lists,
and this was having a negative
impact on the attractiveness
of Hongkong for expatriates,”
Quane added.
Experts say the lull may be
just what the industry needs
to consolidate and prepare for
future growth once Asia is back
on its feet, led by the economic
powerhouses of China and India
and with growth increasingly
fuelled not only by expats but by
burgeoning middle-class Asians
seeking an English education for
their children.
“I think you’re going to see
an increasing demand for school
space,” said Richard Vuylsteke,
the head of the American Cham-
employment, anger at political
scandals and the government’s
weakness in the face of the
global crisis already fuel almost
daily street demonstrations.
Greece relies on tourism
for about one in five jobs. Its
conservative government is
clinging to a one-seat majority
and under pressure to do more
to help even though its credit
rating, recently cut by Standard
and Poor’s, put Greece one notch
below Estonia.
“I’ve worked here for 15
years and never seen anything
like this before,” said Labros Pit,
busy attracting passers-by to the
tables of the popular Vizantino
restaurant in Plaka.
Any visitors to Athens
ber of Commerce in Hongkong.
Many top international
schools in Hongkong, such as
the German Swiss International
School, have had trouble ex-
panding given red-tape and land
shortages in the tiny city.
Following calls to address “a
critical squeeze” on school places
by a broad coalition of business
chambers, Hongkong plans to
expand its pool of international
school places from 35,000 to
40,000 in the next five years.
“In terms of land (allocations),
our priority is on international
schools in the next five years,”
said Raymond Sy, a principal
in early 2009 risked being turned
away at the gates of the Acropo-
lis, an ancient symbol of the
classical spirit and civilisation,
as culture ministry employees
blockaded it to protest against
job cuts and pay delays.
It’s a stark contrast for Greece,
which since it was discovered
by the international jet set in the
1950s, has evolved into a Euro-
pean magnet for mass-market
tourism, attracting 15 million or
so visitors each year.
With US$15.5 billion (RM55.7
billion) in tourist receipts in 2007,
the Mediterranean country was
the 12th most popular interna-
tional destination in the world,
immediately fol-
theSun
Elite field ... assistant secretary at Hong-
Expatriate kong’s Education Bureau. “We
students playing can’t afford another shortfall of
at the Hong Kong educational places ... which has
International a deterrent effect on the expatri-
ate community planning to come
to Hongkong.”
There are about 1,200
international schools in the
Asia-Pacific compared to 937 in
2007, according to ISC Research,
which tracks the international
school market.
ISC says Asia was the world’s
fastest expanding region for in-
ternational schools, with average
growth of around 11% in recent
years, but the rate could ease to
lowing Turkey and Thailand,
according to the World Tourism
Organisation (UNWTO).
“Business is down, with the
riots in Athens and the financial
crisis,” said Nikos Kalyvas, 55,
smoking a cigarette in his rustic
taverna, nested among Plaka’s
Greek specialty shops and
elegant 19th-century houses
painted in soft cream colours.
Dog Days ... “We are at least 30-40% down
Employees sitting from last year.”
behind a stand The first test will be the
with souvenirs Easter season, when coastal
at a shop for resorts traditionally reopen after
tourists in Plaka the winter.
neighbourhood in Hotels have slashed prices to
Athens counter the drop in arrivals, hop-
ing wary consumers may be just
deferring spending decisions.
“Our hopes are now pinned
on last-minute
bookings,” said
Nikos Papalexis, The strength of the euro
head of hoteliers
in Peloponnese’s further darkens the
Achaia, a south-
ern region still
picture, hampering Greece’s
recovering from competitiveness compared
ruinous wildfires
in 2007. with neighbouring Turkey.
Tourism and
related services
are the economy’s main driver,
worth about 44 billion euros
(RM209.6 billion) per year or
18% of gross domestic product
(GDP), according to the Greek
tourism ministry.
The strength of the euro fur-
ther darkens the picture, ham-
pering Greece’s competitiveness
compared with neighbouring
Turkey. Bookings from Britain,
Greece’s top feeder market, were
down 18% at mid-March, said
UK-based Ascent-MI, mirroring
a similar drop in the pound’s
value against the single cur-
rency.
“We are seeing a 40% drop
from last year,” said Apostolos
| THURSDAY APRIL 9 2009
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5-7% this year. China was one of
the fastest markets, leapfrogging
from 123 schools in 2006 to 210
this year.
There are no figures for
the industry, but conservative
calculations suggest it generates
revenue worth hundreds of mil-
lions of dollars a year across the
region, drawing interest from
private equity funds.
Before the crisis deepened
last year, private equity group
Barings Asia paid US$360 mil-
lion (RM1.3 billion) for Nord
Anglia, a British-listed education
provider that runs nine interna-
tional schools including four in
Karvelas, 50, sitting in his shop
among the tiny lidded pots that
he paints in the terracotta tones
of ancient Greek pottery.
“This summer will be tough.
Some shops may close down in
the fall, because owners won’t
have money to pay rent.”
Conservative estimates see
a 5% fall in arrivals this year
– which think-tank ITEP said
would mean the loss of 25,000
jobs from Greece’s five million
workforce and cut tourism’s
input to GDP by nearly one
percentage point.
Others double those figures
– spelling further unemploy-
ment, which the European Com-
mission sees at 9% in 2009 from
a late 2008 level around 8%.
“The worst-case scenario
would be a 10% drop in ar-
rivals,” said Gerasimos Fokas,
chairman of the Greek Chamber
of Hotels, pointing to a potential
loss of 50,000 jobs.
Tourism is also being dented
by near-daily outbreaks of ex-
tremist violence in the capital
since riots shook the country in
December, after the fatal police
shooting of a teenager ignited
discontent amid high youth un-
employment.
With a budget deficit run-
ning at about 4% of GDP and a
large current account gap due
to poor competitiveness, the
government has very little fiscal
wiggle-room.