DUBAI: Dubai’s burgeoning private education sector, while welcomed by parents who have greater choice, has also made it difficult, if not impossible, for some schools to remain financially viable in the face of competition and “oversupply”, educationists said.

Dino Varkey, CEO of GEMS Education, the UAE’s biggest private school group, said more is not always better.

“Increased competition should ideally be beneficial to families and students. However, there are also some unhealthy practices whereby new operators with little prior education experience – and typically backed purely by financial investors – have resorted to aggressive discounting practices. While this may seem attractive in the short term, these actions are driven by desperation by these operators to survive,” Varkey added.

“The consequence, unfortunately, is deteriorating quality of education or financial unviability, both of which impact students and families adversely.

“Further, in the face of increasing competition, schools will have to depend on generating financial surplus to fund maintenance and expansion as well as health and safety capital expenditure and to service cost of capital.”

Longer breakeven

In lower grades, there is still a crunch for seats but secondary education has too much empty room, according to Dr Aishah Siddiqua, director of Dubai National School.

“Even five years ago, there was an understanding of what the market looked like but things have changed quite fundamentally. We have to be imaginative about what we offer, as it’s a competitive market,” she said.

“Many schools will be looking at a much longer period before they break-even or make a surplus. If you’re going to open a high-end school you have to staff it. Schools would have brought in a lot of staff but they don’t have enough pupils and will be making losses the first or second year they’re open.”

Limit on schools?

The solution, she said, “is to have a moratorium on new schools; possibly a five-year ban where no new high schools can open”.

Dr Siddiqua added that Dubai should consider “a small school model for the upcoming schools, which would allow people interested to begin schools to have a more specific-target approach”, with a focus on quality rather than quantity.

Making adjustments

Fiona Cottam, principal and chief academic officer at Hartland International School, a new premium school in Dubai, said though older, affordable schools have enjoyed “the greatest success” in the past few years, newer high-end schools can also grow in Dubai.

Hartland has been adding around 200 students per year for the last two cycles.

“Though we have had to adjust to the challenges of the market, we are still seeing growth year on year as we develop our school. I think it is fair to say that the growth is slower than might have been five or 10 years ago for a new school, but we remain incredibly positive about the future,” she added.

“We attract students not by our promises but by our actions and by our behavior, and although the market is highly competitive, our greatest advocate is our parent community and their positive word of mouth.”