The Competitive Landscape of School Admissions in Dubai
As you drive around Dubai, it’s clear to everyone, that certain schools are investing significant amounts of money on outdoor advertising. Whilst driving around Dubai, listening to the radio, it’s also very clear that schools are spending significant amounts on radio advertising.
The billboard advert has made a dramatic comeback. In some cases, schools are advertising directly outside of their competitor schools in the hope that prospective parents see theirs and consider a move.
Last year, we saw the rise of the lamppost advert. This year, the billboard has bounced back.
So how much are schools spending on outdoor advertising, radio and print?
By the end of 2017, schools in the UAE had spent over $12.9 million on these advertising channels. This was a reduction in spending compared to 2016. However, digital spending is not tracked or recorded by any third-party in the UAE. It is likely the reduction of spending on physical channels can be – at least partially – explained by a shift to digital advertising.
So far, from January to March 2018, schools have spent $5,744,644.6 on outdoor, radio, and print advertising. The leading school spenders so far in this period are:
· GEMS Education – $866,170
· North London Collegiate School -$416,170
· The Dwight School Dubai – $309,608
· The Arbor School – $308,833
· The Global Indian International School – $281,494
The overall figures suggest that schools are still investing in traditional media, in arguably the least efficient areas to do so, which represents an opportunity for the more digitally savvy, new entrants.
New schools entering the market must compete with existing schools to attract parents as the pressure to repay the large capital costs carries a huge burden. Existing schools have to compete with new, and often international brands coming in. Repton, rated as Outstanding by the KHDA, and Dubai English Speaking College, rated as Very Good by the KHDA both spent a significant amount on advertising in 2017, which suggests that their positive reputation alone is no longer enough to attract parents.
The challenge of recruiting children whilst existing schools re-load and re-brand means that new schools entering the market really do have to be different and exceptional.
In 2017, the headlines from the regional press featured a reoccurring theme: affordability.
In October, 2017, Gulf News published the headline “Where school fees are cheapest, costliest in Dubai”. In the same month, Khaleej Times reported “Revealed: Dubai areas where school fees are lowest”.
The current health of the education sector is ambiguous. On one hand, the launch of new schools entering the market suggests growth of the actual sector. New schools are coming, so school building growth is, logically, strong. However, questions must be asked about nature of student population growth, and their entry point into the market.
The need to discount, freeze and in some cases, reduce fees, suggests growth is not even across the different price points, driving both a surplus and a scarcity in specific demographic groups.
Parents have choice across curricular, price point and now, location. Most new schools are nowhere near capacity. In fact, many existing schools now have space because of the increased choice of schools in the market.
The battle of the billboards has coincided with the duel of the discounts.
Historically, established schools have offered sibling discounts ranging from 10% to 20%.
New schools entering the market in 2014 widely offered founders discounts; discounts for parents who either registered as the founding parents, or discounts for parents in the founding year.
The language around discounts is crucial. Some new schools that opened in 2015 offered founding parents ‘life time discounts’. Parents quickly cottoned on to the language around discounts and aligned their thinking to the KHDA school fee framework.
As the market has changed, the language around discounts has evolved. A new premium school that opened in 2016 offered a 30% ‘scholarship’ to parents who were defined as founding, effectively reducing the fees by 30% for those children.
The birth of the scholarship coincided with ‘The Year of Giving’ as scholarships dressed up as discounts were offered across a range of established and new schools.
In 2016, we witnessed the birth of the incidental discount and parents started to use their bargaining power under the table by negotiating one-off deals and special discounts.
This form of discounting is perhaps the biggest known, un-known factor in the market today.
It is obvious that school fees are a sensitive topic especially during a time of uncertainty. It is quite often the timing of communication surrounding fees that causes the biggest upset for parents as they juggle cash flow, and manage uncertainty.
Repton and Horizon International School announced fee reductions for the 2018/19 academic year. An advertised reduction in fees is an intended message to the market.
The history of discounts is an interesting one:
· Sibling discount (Pre-2013)
· Founders discount (2013-)
· Scholarships (2015-)
· Incidental discounts (2016-)
· Fee reduction (2017-)
In June 2017, schools spent over $2,500,000 on traditional advertising, the highest spending month recorded in five years. Historically, parents had already chosen their schools way before then but with greater choice, comes greater flexibility. With more new schools opening in September 2018, will we see another spike in advertising as schools’ struggle to attract parents?
Clearly, there’s only one winner in the battle of the billboards and it is the traditional advertising industry. In the past few weeks, I have been shocked by the choices that certain schools have made in their pursuit to attract parents. With ill-equipped methods, and expertise lacking, traditional media is surviving because of schools in the UAE, as most other industries have moved on.
