EC, the Maltese-owned language school chain, expects to open its fourth US centre in San Francisco early next March to take it to a total of nine worldwide, executive chairman Andrew Mangion told The Times Business.
The chain, headquartered in Malta, is currently in final negotiations over "sizeable" premises in a central downtown location on the outskirts of San Francisco's financial district. A widely experienced centre director who came on board in the summer and has completed training in Malta and in the US, is now working to set up the school.
Ranked among the top 10 global EFL brands, the group, which has taught English to close to 200,000 people since its inception in 1991, has just opened the doors of its New York school at 1450 Broadway, one of the most desirable addresses in the world.
EC New York was inaugurated a fortnight ago by Prime Minister Lawrence Gonzi who was in town to address the UN General Assembly. Mr Mangion, who also attended a business forum off Wall Street the day after the opening, said Dr Gonzi spoke highly of EC and seemed to share in the pride of unveiling the fruit of Maltese investment in the world's foremost business centre.
No expense has been spared on EC New York. Mr Mangion said the 12,000-square-foot premises comprised the entire, glass-encased 14th floor of a building on Times Square overlooking a newly pedestrianised area.
New York City-based firm TPG Architecture was entrusted with the decor. The company, which specialises in corporate interiors and retail design, boasts an extensive client list featuring major fashion labels and global brands like MTV, Barnes and Noble, and British Airways. The $1.1 million outlay resulted in stunning premises decked out in EC's corporate white and orange colours and a crisp, cosmopolitan look.
Setting up shop in New York, with 25 full- and part-timers on its staff, presented EC with a challenge to do things differently.
"We have always acquired companies and expanded them by injecting our brand, our own systems and our own human resources from time to time," Mr Mangion explained. "However, it was very evident to us that it was going to be very difficult to get into New York organically, so it made more sense to acquire an organisation for licensing purposes than set up our own centre. The school will accommodate over 200 students in morning classes. With afternoon classes, which should start soon, we can double that number."
The US ranks among the top three most expensive EFL destinations with the UK and Ireland, and Mr Mangion conceded that the relatively weak dollar had impacted the cost of the destination. Establishing an operation in "ruthless" New York, where a square foot costs a fortune to lease, has involved considerable capital, but Mr Mangion is confident about the return on the investment.
The executive chairman said the New York EFL market was evolving and he anticipated an influx of Asian students from key destinations like South Korea, Taiwan and Japan, besides interest from major European markets, South America and the Middle East over the next 24 months.
The school now has residential accommodation on offer within Manhattan, and is currently studying the potential of some other more accessible accommodation options in fashionable Harlem. Host families in Brooklyn, Queens and nearby New Jersey have been attached to the school; Grand Central Station and major subway stations are just a few minutes' walk away.
EC started its adventure in the US much like the Pioneers - in New England. In 2007, EC acquired the Olin Center in Boston which brought with it key human resources. One of the owners of the school is today EC's head of operations for North America.
Early last year, EC acquired a school in La Jolla, the very affluent district in San Diego, an acquisition that Mr Mangion described as having given the group added value.
"The US is highly legislated," Mr Mangion pointed out. "If you go by the book, it is fairly straightforward - but there are many books. Of course, there is federal law, but each state has its own legislation. We are present in three states. New York State is particularly onerous when it comes to education and language schools, and to a certain extent that has kept out fly-by-night operations.
"We consider any language school in the world to be our competitor. It would be naïve to think that any small to medium-sized stand-alone school in New York City is not a competitor, and that the only competitors are other chain schools like EC. If we were to look at competitors in our category, which would be medium to large international chains, there are a number out there."
Mr Mangion is confident about the holistic prospects for the US market. After the market nose-dived briefly after September 11, it was hit even harder by tighter security measures imposed by the newly-set-up Department of Homeland Security. The 'Sevis' tracking system monitored students' movements and created a web of bureaucracy that made it difficult for some nationalities to obtain US visas.
The industry began to resurge in 2005-2006 and the past three years have been promising. The change in administration augurs well.
"We have seen business continue to improve and it will certainly get better on the basis of the Obama Administration being far more open to students coming to the US," Mr Mangion explained. "The President believes in the advancement of diplomacy by creating friends not enemies of the US. Ultimately, the US is a great destination and offers so many different things. People want to travel there. The dollar has remained relatively weak and that will continue to benefit us. Post-September 11, we estimate that as many as 35 per cent of language schools ceased operations so there is actually far less competition in the US these days, which makes it really attractive for us."
The group has seen over 25,000 students come through the door this year, but EC's star performer has been the UK where it operates schools in London, Cambridge and Brighton. Mr Mangion is also particularly satisfied with the success of the operation in Cape Town, which has raised its profile to become one of the top schools in the city in just three years.
The executive chairman described the EFL industry's long-term potential as "very good". Studies by organisations like the British Council point to seven to eight per cent growth sustained year on year for the next 10 years.
"We will see a glitch," Mr Mangion warned. "In 2009, there is a possibility that we might see a slight contraction in the EFL market, but it will be temporary. There will be a hit for one or two years, and then the business will come back with double the force.
"English is firmly positioned as the lingua franca. There are two billion people who are actively learning English or seeking to improve their English - it is a huge market. It is not just teaching people who do not speak English today. It is helping people keep up the standard of their English. Remember, language is a perishable. The reality is that, year in year out, as you start to lose contact with the language, you need to go back for more for work, study or travel purposes."
EC now has over 350 people and 22 nationalities on its international payroll, including numerous Maltese. The staff number doubles in high season. Mr Mangion admits that as the organisation grows, it will need to consistently beef up its headquarters staff as EC's international success generates more employment locally.
The group has its own Malta-based sales and marketing team which is constantly travelling, and EC is also marketed through a network of 1,000 agents based in 80 countries. With an agent retention rate "well above" 90 per cent, EC enjoys high levels of repeat business.
Constantly monitored student feedback reveals an impressive 97 per cent of course participants who rank EC as "good", "very good" and "excellent" around the world.
Asked about EC's key differentiator, Mr Mangion replied that the group had identified a good formula that worked well based on six core values, proudly displayed at all EC schools around the world. Those core values revolve around a love for the job and superior service delivery levels. Significantly, specifically designed in-house training programmes had allowed EC to transform its key people into leaders.
"Our core values allow us to attract the type of people who have the right DNA for what we want our service to be," Mr Mangion emphasised.
With the group's US arm firmly gaining a foothold in this major market, Mr Mangion and his team will eventually turn to the next step on the way to take EC to the industry's podium.
"There is still a long way to go, but we will get there," he said. "We are currently operating in four countries. The plan is to operate in all major English-speaking countries in the world so there are four others that we will target at the right time: Canada, Ireland, Australia and New Zealand."