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SOURCE: IBISWorld 3
Language schools were hit hard when the recession forced companies and households alike to scale back their plans to go abroad. Less travel to foreign countries meant less demand for foreign-language courses. The industry benefited from steady immigration levels and the influx of international students into the United States, both of which contribute to demand for English instruction. However, even as the economy recovers and demand picks up in the next five years, language schools face increased competition from educational institutions' in-house language programs and language instruction software. For these reasons, industry research firm IBISWorld has updated a report on the Language Instruction industry in its growing industry report collection.
Los Angeles, CA (PRWEB) November 18, 2012
The Language Instruction industry is one of the smallest in the education sector. During the recession, consumers reduced spending on international travel and businesses delayed plans for overseas expansion. With fewer individuals and businesses going abroad, demand for foreign-language training fell. “While international travel picked up as the economy recovered, overall industry growth has been slow,” says IBISWorld industry analyst David Yang. Consequently, IBISWorld expects revenue to increase slowly in the five years to 2012, growing an average of 0.6% per year to $955.9 million.
Language Instruction industry schools are also facing strong competition from language instruction software publishers. This industry has fought back by developing online courses and focusing on the corporate market. Unfortunately, may smaller operators lack the capital to develop online education platforms and the capacity to provide customized services for corporate clients. Despite the difficulties surrounding online development and the intricacies of offering services to corporations, IBISWorld expects the number of industry firms to increase an average 2.5% per year to 12,622 in the five years to 2012, mostly due to very low start-up costs for small operators. “The industry has a low level of market concentration,” adds Yang. “As is the case with many industries in the education sector, there are a large number of local players and nonemploying establishments. One the other hand, large operators have the capacity to serve multinational corporations and the resources to develop additional programs and provide services online.” Over the past five years, market share concentration has increased as major companies like Berlitz and Rosetta Stone expanded online education, which increased their customer base.
In the next five years, industry operators will also face increased competition from educational institutions that offer in-house intensive English programs (IEP) for international students, a major market for this industry. As a result, industry firms are anticipated to expand online language programs that allow greater flexibility than traditional schools. Wages are projected to decline as a share of revenue due to the shift online, as fewer instructors are needed to teach students. Overall, demand is forecast to rise steadily in the next five years as consumers and businesses resume international travel. The number of international trips taken by US residents is projected to grow from 2012 to 2017, boosting industry revenue up by the end of the period. For more information, visit IBISWorld’s Language Instruction in the US industry report page.
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IBISWorld industry Report Key Topics
Language schools offer language instruction ranging from conversational skills for personal enrichment to intensive training courses for career or educational opportunities. Schools teach foreign languages, sign language and English as a second language. This industry does not include language instruction software.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
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