For those running tours, which normally need to include accommodation, airport transfer, transport and food, having to take into account what prices might be in the next year is causing possible profit margins to shrink.
“As a general industry, we’re being asked for our prices in August-September and pricing [for the future] is difficult,” Mark Cook, managing director at Trinity International Education, which provides summer schools in the UK for Italian juniors, told The PIE.
“In terms of food, inflation is running at 10% to 11%, and it’s partly our biggest cost.
“You may or may not be able to get the price of rent now from providers but if you go to a coach company and ask how much it is for a student trip to Oxford from London, they’ll say they don’t know.
“The same goes with attractions. The London Eye might well say they don’t know how much it’ll cost next year,” Cook said.
Yeliz Hussein, global sales director at Bayswater Education, said that some ELT providers are inflating prices by 15% or even 20% to try and cover their overheads.
“It’s definitely something that needs to be discussed more,” Hussein told The PIE.
Cook added, “We have to make estimates, and that can be dangerous when you’re talking about big numbers. If you make a mistake or swing the big number the wrong way, then someone’s going to be in trouble.”
Despite the difficulties with inflation, the ELT sector is the UK in generally on its way to recovery. The latest English UK data shows 36% of all ELT students globally are choosing the UK, and 19% of all student weeks are spent in the country as well.
“Things are definitely looking more positive, and lighter,” Hussein noted.
Dynamic pricing has often been discussed in the last year throughout the sector. It was a hot topic at last year’s ALTO London conference.
Hussein said that the system that’s worked before just isn’t going to work in this post-pandemic era.
“I don’t think our sector is quite ready for dynamic pricing. I definitely think we should have the ability to be able to change some of our pricing more frequently.
“Back in the day pre-pandemic, it was very common that you would set your pricing and then launch it.
“Let’s say you can hold these prices for a year – I personally don’t think the world is like that anymore. We have to adapt and so do agents.
“However, I think adapting so much so that you can change your pricing like Booking.com or hotels.com, is too extreme for what we are ready for. But I definitely think we have to be a little bit more dynamic with all our commission pricing,” she said.
Consolidation in the market is “a result of where we’re at in our industry”, Hussein added.
“We’re not going to be the only industry out there doing that,” she noted.
“Whether or not it’s good for the industry is something else because we’re still not quite past that post-pandemic and companies are probably struggling financially.”