This thought has been going on in my mind for since June last year; the trigger was sudden change in school transportation charges by one of the prominent education providers in Dubai. The services were outsourced by school to another company specifically created by the group management to bypass the local laws regulating hike in total fee for schools.
When I started wondering why a prominent education provider who longs to have 5000 schools world over is doing this; the thoughts which came up were
1. education is recession proof business
2. there is no competition
3. group has good connections at higher places and due to this laws are immaterial
4. people are earning so what is the issue, pay it
Now this same group has been arm twisting the parents in various schools owned by them in UAE. The tactics include last minute change in school tuition fee, abrupt shifting of necessary services to another group company to increase charges, stopping activities in schools and asking parents to cough up money for that, threatening parents to close schools if fee hike is not accepted, turning aways kids from schools when parents fail to pay the fees due to loss of job.
Question still remains in my mind, is education recession proof in Dubai? Probably not, the consumption in Dubai is largely by expat population (about 80% are expats here).
Recession is causing job losses on every day basis;
if you are lucky to be in job; don’t expect to get any salary hike in near future;
rentals are falling, property is becoming cheap but still without buyers;
consumption for consumer durables is falling and stores are on promotion spree for last 4 months now to woo customers;
As soon one loses job, he and family has to leave this country in less than a month. There are unconfirmed reports indicating plane loads of people going back home. How the school classes would be filled in such conditions? Doesn’t this make education business also prone to recession in expat populated countries (most of the GCC countries are like that)? I know many schools which are to start their new academic year in Septemer 2009 have advanced their selection program by a month and asking to to pay fees till November/December in advance in Feb/March. This is just to ensure that they have confirmed admissions, which never used to happen here earlier. If education business is recession proof then why all this by schools and their management?