Dynamic pricing: the future of international education?

Edvisor’s Ben Delaney the Director of Educator Success is joined by Hannah Lindsay-Cornish the Deputy CEO of St. Giles International, Juan Camilo Gutierrez the General Manager of Viajes y Viajes, Reka Lenart the Association Manager of ALTO, Victor Hugo Baseggio the CEO of CI Intercâmbio, and Andrew Mangion the Chairman and CEO of EC Language Centres for a discussion about the future of dynamic pricing in the international education industry. Here’s an overview of the discussion in the 'Dynamic Pricing: The Future of International Education?' panel.

What is dynamic pricing? 

Dynamic pricing is a pricing strategy that takes into account the constantly changing demand for a product or service in order to maximize profits. This type of pricing is common in the airline and hotel industries and is now starting to be considered for the international education industry. 

By using dynamic pricing, international education providers are able to charge higher prices when demand is high and lower prices when demand is low. This allows them to better match their prices to the current market conditions, which can lead to increased revenues. In addition, dynamic pricing can help international education providers to fill empty seats or slots that would otherwise go unused. 

Dynamic pricing is a beneficial tool that can help international education providers like agencies and educators optimize their profits and better meet the needs of their students. Although dynamic pricing has been adapted for use in multiple travel industry offerings, this is not something we see often in the international education industry.

Educators tend to keep their core global pricing, which changes once a year, and although they may launch different promotions throughout the year, what we want to look at is discussing the static nature of our industry's pricing system and address current volatile markets like we're seeing now with global inflation. 

Is dynamic pricing desirable for our industry?

The international education industry has been growing rapidly in recent years, with more and more students seeking to study abroad. As a result, the demand for international education services is higher than ever before. To meet this demand, many providers could look to dynamic pricing. 

Andrew Mangion questions the delay for the international education industry in implementing new technologies and pricing methods, “Could the industry benefit from dynamic pricing? I think it could.” Andrew adds that “the travel industry has been using dynamic pricing for decades and decades, so I still can't get my head around what's standing in the way of it being used in the education industry.” 

As the international education industry continues to grow, it is likely that dynamic pricing will become increasingly commonplace. This could have a positive impact on inflation, as it would help to keep prices stable. In addition, dynamic pricing could help improve access to education, making it more affordable for people from all walks of life. Andrew mentions that ”The inflation rate in the UK tops 10.1 percent, this has never been seen in 40 years. How can a school set its prices in May or June for eighteen months down the line all the way into the end of the next year with current events? I mean, we've been saying this when inflation was 1.7 and it's now eight times that.”

While dynamic pricing can be desirable for providers, it can also be problematic for students. For example, students who wait to book their international education services may find that prices have increased significantly. As a result, they may be forced to pay more than they would have if they had booked early. This can create financial hardship for students and may deter them from pursuing international education opportunities. 

Hannah Lindsay-Cornish adds that dynamic pricing, “is almost like rewarding people who decide in advance.” She mentions that international students can benefit from lower pricing, incentives or promotions when booking international education ahead of time.  “This works the same way as if you book a hotel six months ahead of time and you say yes I'm happy to lock this price.“

Andrew Mangion states that in regard to international education, “We've been looking at dynamic pricing as an industry and as a company for many many many years, so this predates inflation. Let's remember one thing, dynamic pricing doesn't just mean raising prices it means making them dynamic: they can go up and there are times when they can go down.”  

It is important to weigh the pros and cons of dynamic pricing before implementing it in the international education industry. Victor Baseggio, adds an agency perspective, “I am a great believer that dynamic pricing can bring a lot of benefits, especially to our suppliers. I'm totally convinced that the agents also are going to benefit from it.”

Hannah Lindsay-Cornish builds on Victor’s point, “It is such a complex issue, isn't it? It would allow us to move with demand and it might allow us to make higher margins, especially at times when there's really a hard time to get rid of empty seats when we can't get enough students in the low season. There are certainly advantages but I think it is a complex thing.”

The agent's perspective does not entirely differ from the educator’s. Juan Camilo Gutierrez says, “We should start using dynamic pricing, I think dynamic options will be much better for the industry. Because of this, we can have a higher occupancy rate in the schools and that's going to be much better for the schools. And, that's going to be much better for agents because we can have more students enrolling at different prices.”

Do we have the right technology? 

It is still too early to say definitively how access to technology will affect dynamic pricing in education, but it is clear that it will play an increasingly important role in how providers set rates for their services.

Andrew Mangion adds to his earlier point about the delay in implementing dynamic pricing for education, “I still can't get my head around what's standing in the way of it, and I sense it's technology. We've been looking at dynamic pricing as an industry and as a company for many, many years so this predates inflation. Let's remember one thing, dynamic pricing doesn't just mean raising prices, it means making them dynamic, where they can go up and there are times when they can go down.”

Reka Lenart adds in regards to technology that “if you have access to a nice platform where it's all clear and sorted, out then it's just a question of educating the clients.”

“The reality is that, if we can get technology into our industry the complication goes out of the window because the technology is doing all this for us. Pricing discrepancies are solved because it's done by the technology, and we can focus our efforts on selling and not worrying about getting the right price.” Andrew Mangion says in regard to access to technology for dynamic pricing. 

Edvisor is already solving many of the issues with pricing discrepancies in the international education industry through different tools for agencies and educators, and real-time pricing updates inside the Edvisor platform. 

Ben Delaney from the Edvisor team adds, “The first thing we mentioned was access to a global education distribution system which has existed for eight plus years through Edvisor. One of the questions is, how can Edvisor and schools work together to implement dynamic pricing within the tech that already works for our agencies while managing pricing across our educators and providers.”

Poll Results

The poll results are in and it looks like agents and educators love the idea of dynamic pricing! The poll was launched at the beginning of the panel. It started with an approval rate for dynamic pricing of 65%, which skyrocketed to 80% by the end of the discussion. 

At Edvisor, we’re already solving many of the issues with pricing discrepancies in the international education industry through different tools for agencies and educators, as well as real-time updates inside our platform. If you’re looking to stay ahead of the curve in this rapidly growing industry, dynamic pricing may be a great option for you. Schedule a demo today to learn more about how Edvisor’s technology can help your business. Thanks for reading!