English language schools may be in for a tough summer as the weak sterling and favourable tax rates continue to place the UK, Malta’s main competitor, at an advantage.
The possible departure of the United Kingdom from the European Union would only exacerbate matters, according to the Federation of Language Teaching Organisations of Malta.
A spokesman for the federation – an umbrella organisation bringing together language schools teaching English as a foreign language – said the weak sterling when compared to the euro “will encourage agents to send students to the UK as opposed to Malta”.
This, he added, was despite the unique characteristics that Malta offered, including the weather and proximity to entertainment destinations and cultural sites.
The spokesman said that schools had not yet seen a trend that could predict a shift away from Malta in favour of the UK.
“At the moment this shift is not yet being felt for the simple reason that sterling started taking a downward turn only recently. However, we are sure that if this pattern persists, especially if a Brexit occurs, tour operators and agents will be even more inclined to opt to send students to the UK as they have always done every time sterling weakened.”
He explained that apart from a weak sterling, there were other factors and local decisions that were already giving the UK a competitive advantage as a primary English language teaching destination.
Malta already had a competitive disadvantage due to VAT applied on language travel services offered in Malta, where students must pay seven per cent VAT and 18 per cent VAT on all other services.
“In the UK, no VAT is levied and this already makes it more competitive. And now, the looming 50c per person per bed night tax that the government is so adamant on introducing will only serve to increase the competitive disadvantage of Malta as an ELT destination,” the spokesman said.
According to the latest statistics covering 2014, student arrivals increased by 3.4 per cent over 2013, from 74,992 to 77,550. The average length of stay also increased by 1.8 per cent, with a five per cent increase in student weeks.
In 2014, the ELT sector accounted for almost 13 per cent of total tourist bed nights, with a significant contribution recorded during February and March as well as the peak summer period.
The sector reported significant numbers from some of Malta’s top tourist markets such as Italy, Germany and France, but also attracted students from non-traditional markets such as Colombia, South Korea, Brazil, and Poland.