With a growing body of education technology available, along with the recent proliferation of online courses in response to the COVID-19 outbreak, many are suggesting face-to-face education delivery models will soon be a thing of the past.
Many universities will likely be reluctant, however, to make the switch from face-to-face study to less lucrative online offerings as they come under pressure to address student revenue shortfalls.
How can universities position themselves against these headwinds while also delivering on their value proposition for students? Will a cohort preference for in-person learning continue to influence longer-term demand for education infrastructure?
The temporary transition to online teaching
Universities responded quickly to the onset of COVID-19, moving the bulk of their courses online to address immediate student needs. Around 71% of higher education institutions1
have already offered alternative online courses to prospective students in the absence of face-to-face teaching (see Chart 1). Further, recent QS survey research2
shows that most prospects have some level of interest in online study as a replacement for on-campus teaching, noting the limited possibility of returning to campus in the short term.
Before the pandemic, there was already high growth and adoption of digital education, with the global education technology market set to reach $US340 billion by 20253. Many have suggested that this growing shift, along with the recent proliferation of online courses post the COVID-19 outbreak, will eventually replace established face-to-face education delivery models.
Chart 1 - COVID-19 related actions taken by institutions for prospective students
Source: StudyPortals COVID-19 Dashboard
Most students still prefer an on-campus experience over online teaching
There does, however, appear to be limited genuine enthusiasm over the online teaching model, with 57% of respondents registering ‘slight’ or no interest in studying their full degree online4. Chart 2 also shows the recent increase in global internet searches for on-campus teaching, despite the initial dip post the COVID-19 outbreak in early March.
Chart 2 - International student search volume by study method – 2020 vs 2019
Note: Chart recreated by CBRE
Source: StudyPortals COVID-19 Dashboard
QS survey data also shows that 66% of respondents are willing to defer or delay their education plans as a result of COVID-19, if this meant face-to-face learning would be possible5
. While online study may be an effective stop gap to traditional face-to-face learning, most students still prefer an on-campus experience.
We must note that universities are only likely to offer the option of transitioning to face-to-face study when it is safe to do so. Most would anticipate a degree of normalcy to on-campus teaching so long as a successful global roll-out of the COVID-19 vaccine has been achieved.
Longer-term PBSA demand will be supported by preference for on-campus learning
Concerns around travel restrictions, a financially impacted middle class, and health and safety issues around a return to university will no doubt present some immediate challenges to the Purpose-Built Student Accommodation (PBSA) sector.
We believe, however, that the recent transition towards online education is not expected to result in any significant longer-term structural changes to PBSA demand. The average age of online learners is 346
, whereas PBSA traditionally serves a younger undergraduate market. These students require an on-campus presence in order to facilitate their broader personal and social development, and it may well eventuate that this crisis actually reinforces the value of an on-campus higher education experience over studying online.
1 Sample of over 1,500 institutions taken across the world
2 Sourced from QS International Student Survey 2020
3 Sourced from Business Insider (2020)
4 Sourced from QS International Student Survey 2020
5 Sourced from QS International Student Survey 2020
6 Sourced from Education Today (2020)