By and large, Australia has done well containing the COVID-19 pandemic.
However, some sectors - most notably tourism and education - have been hit hard due to their exposure to, and reliance on, international markets.
Chinese students make up the largest proportion of international students at Australian universities. So, when the Federal government implemented a travel ban during the 2020 Chinese New Year, many students at home for celebrations caught out, unable to return to Australia to study. Newly commencing students were also blocked from entering.
International students still in Australia found themselves jobless due to major lockdown restrictions. Ineligible for government pandemic support and with parents back home also taking a pandemic financial hit, students found themselves lining up for charity handouts.
By October 2020, international student enrolments had dropped by 13%, with new enrolments between July and October 2020 dropping by 75% from the year before.
Accompanying bad press around the sometimes poor treatment of people of Asian origin in Australia, often related to misinformation about the pandemic, somewhat tarnished our friendly reputation. And the ongoing trade war between China and Australia saw a major nationalism-inspired pushback on Australian exports, including education. According to a March 2021 survey by the Australian Chamber of Commerce [Austcham] in Beijing, 62% of respondents said attitudes towards Australian education in China ‘have deteriorated’ as a consequence.
This combination of factors - and the more recent roadblocks to COVID recovery in Australia due to vaccination issues, border opening delays and disagreements between levels of government about managing pathways back to Australia for international students - have come together to create a perfect storm. Or maybe a ‘financial tornado’ is more apt, with modelling by Universities Australia showing that by 2023, universities stand to lose A$16 billion due to the loss of international students.
To gain some clarity on the outlook for international education in Australia, we spoke to George Hernandez. George is the CEO & Founder of Sofiri, an innovator in the education tech space offering professional support to aspiring students looking for educational opportunities across the globe.
Sinorbis: Thanks for talking to us today, George. To kick off, let’s talk about the big picture. Given the drop in international student numbers to Australia during the COVID pandemic, how would you summarise the impact on Australian international student education as a brand and can you identify an issue that may have been underreported?
George Hernandez: So, it is an ongoing situation that didn’t just begint [from] when the pandemic started and the borders were closed. It's actually, as time passes, something that evolves. And as such, the thoughts that one may have about the impact may change three months down the road.
To that point, I say that as a global brand, there is definitely a short-term effect...and going back to a pre-COVID demand will take three to four years, possibly. That is because if we're just looking at the idea of people potentially being able to enter the country next year, then it still takes time for the student pipeline to develop to where it was. A lot of the students that would like to come to Australia are going to Canada and the UK and places where they can actually travel. Despite everything, [Australian international student education] is still a strong brand and people will still want to study in Australia. So, it'll pick up and people will forget issues like having the prime minister at the very beginning of the pandemic saying to international students to leave the country.
If I think of the most underreported thing, it is probably the people laid off from working in this industry. So, in a sense, starting with, say, education providers, universities, colleges, they have fired hundreds and hundreds of staff because universities did not manage to get access to any sort of assistance from the government.
Sinorbis: That feeds well into the next question, which is how you assess the universities’ response to the drop off in numbers and what complementary education sector businesses such as Sofiri have done operationally during the time to manage it.
George Hernandez: Universities reacted by basically stopping all kinds of investment on anything they could be doing to attract the students…[and the move was to] naturally deliver content online. I saw some started with some basic stuff, some already had a lot of experience doing this, but everyone had to do this rather quickly. Delivering content to China is not so simple...so [it was a] massive technical and operational challenge they managed to actually do quickly.
In terms of student recruitment, a lot of universities had tried to, of course, do things online. But it has definitely put a lot of pressure on student recruitment through the traditional channels...consultants, recruiters, visiting countries and training counsellors and talking to students face-to-face. Now [everyone needs to be] more savvy when it comes to digital marketing, especially recruiters, in an area that has been always taken care of by marketers. They now have to start fully understanding and executing marketing themselves because it's just part of their job with this new strategy that is being implemented.
Another element is definitely an emphasis on trying to create products around online learning delivery. And so that means that there is going to be a bit of a shift when it comes to recruiting students that are going to study online completely and not necessarily coming [to study] face-to-face. And so, an example. I am based here at Macquarie University. Their MBA is a top-ranked MBA worldwide and something that will cost AUD$80,000 a year for international or domestic students. So, they have figured out a fully online MBA that is going to be targeting students, say, for instance, in Africa, and that will only cost AUD$30,000.
Agents all over the world are having to change their business management. They just have had to completely close down what they're doing or focus on other destinations. They terminated contracts or lowered the amount of hours which people were working.
[In terms of Sofiri], being a digital company means we can actually focus our attention to other things. So, for instance, we are shifting our focus to Canada and North America in general. And we also work not only in directly recruiting international students into Australia, but also on providing licencing technology that can be used for recruitment by education providers.
Sinorbis: Will this shift see universities pivot more towards online learning as part of the different educational offerings in Australia?
George Hernandez: It will be there. It will not replace the interest of students to come to Australia and study face- to-face. There are three important components to this: the university or college where they’re going to be studying the course, the other people they will be studying with and the destination. And so, being a third of the equation, Australia as a destination is still important. Having a face-to-face experience is about living in a different country... immersing themselves possibly in a different language...and 100% of the time is about, of course, meeting people from multiple cultures.
Sinorbis: Let's jump to the side issue, which is this trade war that China and Australia have been in. Have you seen an impact similar to that of COVID or is there a different kind of impact?
George Hernandez: No it hasn't impacted education yet. Out of all the different industries that are actually targeting China - from wine to timber to wool to all different kinds of products - education and iron ore are actually still going. As much as the government of China has tried to persuade people to go to different destinations, they still want to come to Australia. And [China] is a country where people are happy to study online. Having said this, turning the tap off through policy is something the Chinese could do, and if that was to happen it would have the biggest impact on the Australian international student education market...with specific effects on highly ranking universities...and the ELICOS sector. Hopefully we will never get to a point like that, but who knows?
Sinorbis: What other countries do you think might Australia look to if there is an ongoing fall in Chinese student numbers? Are there other countries that have also pulled back as potential markets? Can you see opportunities around other markets?
George Hernandez: Currently, the second biggest market is India and...the third is Nepal, the fourth is Vietnam and the fifth is Brazil. These are all already established. There is a strategy that is being laid out as we speak when it comes to international education for the next decade around the diversification of prospective students. And, of course, with the online world, technically that opens it up to anyone in the world. Time-zones do have an effect, so that places us in the Asia Pacific as the main region. But there are some interesting markets out there that can actually grow as well, including the US, some European countries...classic ones like Bangladesh. And Indonesia, for instance, a country Australia has struggled to actually have an impact on.
Sinorbis: Are we at risk of alienating those big markets like India and China if we keep looking towards other markets?
George Hernandez: I think they may stay flat when it comes to numbers, maybe reduced a little, but that sort of interest will just be organic.
Sinorbis: What is going to have the biggest impact on the market recovering now? Clearly, vaccination rollouts are one of them. Borders opening also. Is there anything on top of these that you can think that might speed up the recovery?
George Hernandez: Yes. For instance, Australia policy is potentially changing so that they can start letting people in who have been vaccinated. Maybe not to do hotel quarantine but to do home quarantine. It is my understanding that's actually what the Federal government is trying to do. It's a shame, of course, the way that we are dealing with [vaccinations]. I know it is not directly an effect of incompetence, it's also the issue we have with the vaccines making it all the way to Australia, the problems with AstraZeneca, and so on and so forth, but also the lack of vision definitely about how they concentrate on those four pools of vaccines.
Sinorbis: And there has been some press this week about the state and federal governments clashing over how to get international students back.
George Hernandez: The unfortunate thing here is that they're throwing the ball to each other. And so because of that, it's like nothing is happening. What no one understands is that many of the students that are to come back...will be students who were already studying here in Australia before this whole thing happened. They just got trapped outside the country during the semester break. So, when you're looking at about one hundred thousand of those students, we're going to let maybe 10,000 come in, we'll just that's just 10% of the people that already have a visa to actually stay. The reality is that numbers will only be noticeably higher if and when the borders are open.
Sinorbis: Jumping forward and looking to the future, what kind of scenarios can you see playing out, particularly in terms of China?
George Hernandez: Geopolitics do affect Australia. As much as the Biden administration has a completely different stance to the Trump administration, they did just declare China “enemy number one”. China actually had a change in its approach to geopolitics as well...trying to come across as a stronger country. And they also just stated recently that they are at the same level of the US. And we do know and everyone anticipated that the Chinese economy by 2050 is actually going to take over. That definitely will have an impact all over the world in terms of Chinese students going there.
If we look at other countries that used to be big sources of international students like Japan or Korea, there have been decreases in the number of students that they're sending overseas over time. Why is that? Because their universities are getting better. China may actually find themselves at a point in time where they say, “We have really good universities here and people can stay in the country and study here.” China is already in the top-five destinations in the world for international education. When China, for instance, gets to a point where they have programmes that are completely in English, which they do already, but more mainstream, they will say “We're going to compete against Australia, we're going to compete against the UK because we have the knowledge, the experience, the universities, the campuses, the facilities.”
[When this happens], the numbers will start changing. So that is the medium to long-term vision, based on my experience, of what I think may happen.