Unis brace for ‘catastrophic’ financial impact of coronavirus
Australian universities are set to face an “unprecedented” financial impact from the coronavirus crisis — leaving leading institutions bracing for a billion-dollar impact.
Education
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Universities are preparing for an “unprecedented” financial hit from the coronavirus crisis as their reliance on Chinese students is exposed.
At least two-thirds of the 150,000 Chinese students enrolled in Australia’s universities are locked out because of the travel ban.
Chinese students make up almost two-fifths of international enrolments — putting about $4.5 billion of the $12 billion in revenue from fees in jeopardy.
It’s estimated Chinese students generate more than $740 million in fees a year at Victoria’s two highest ranking universities alone.
University of Sydney Assoc Prof Salvatore Babones — who last August warned universities were taking a multi-billion dollar gamble with their pursuit of Chinese students — said coronavirus had unleashed a financial nightmare for institutions.
“It’s an unprecedented event affecting universities,’’ Assoc Prof Babones said.
“This is going to kill Semester 1 for everyone.
“It’s a risk of catastrophic declines in revenue.
“It would be very worrying and I would be scrambling to do what I could.”
Prof Babones, a Centre for independent Studies adjunct scholar, has completed estimates showing Chinese student fees account for up to a quarter of total revenue for Australia’s eight top universities.
The number of Chinese students estimated to be stuck in China was conservative because it didn’t include new-starters yet to get a visa.
“Australian universities’ exposure to international and Chinese students is off the charts,’’ he said.
“They became vastly overexposed in the pursuit of increased revenue.
“They are extraordinarily reliant on Chinese students more so than any other universities outside of China.
“They should be able to meet the impact out of financial reserves and or borrowing.
“But they certainly will feel a substantial financial impact from the coronavirus epidemic.”
Prof Babones calculates the University of Melbourne, which has an estimated 13,000 Chinese students, receives $479 million in Chinese student fee revenue a year.
He put the figure for Monash University’s 11,000 Chinese students at $263 million.
Universities Australia chief executive Catriona Jackson said it was too early to know the complete financial impact on universities.
They were offering course content online, fee-free deferrals, postponing start dates and delaying exams.
“Universities have proven to be resilient organisations in the face of local and international challenges in the past,’’ Ms Jackson said.
“However, there is no doubt the virus poses a significant challenge to a sector that is hugely culturally and financially important to Australia.”
Student accommodation providers have also been affected.
Scape founder Craig Carracher, whose group manages 14,000 beds nationwide, said: “Losses in Semester 1 will be considerable given the delayed arrival of 40 per cent of our student residents.”
Bookings may increase long-term however with reports homestay families were refusing to take students because of isolation requirements, he said.
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UniLodge chief executive officer Tomas Johnsson, whose firm manages more than 20,000 beds at 70-plus properties, was holding rooms for stranded Chinese students.
“We are working closely with our university partners to safeguard the reputation of Australia as a leading university education destination,’’ he said.