GEMS’ most expensive school in Dubai to merge amid competition

GEMS Education, one of the biggest private school operators, is merging two of its Dubai campuses amid increased competition.

GEMS Nations Academy, touted to be Dubai’s most exclusive school with state-of-the-art facilities and run by Tom Farquhar, the former head of the school attended by President Barack Obama’s daughters in Washington DC, will be merged with another institution one year after opening. Students at the 20-year-old Dubai American Academy will be moved to GEMS Nations’ campus and Farquhar will retire, the company said Thursday.

GEMS Education, which operates more than 80 schools in over 10 countries, has been expanding after selling stakes to private equity firms, including Blackstone Group, sovereign wealth fund Bahrain Mumtalakat Holding, and Dubai-based Fajr Capital. The company raised $500 million at the end of last year to refinance debt.

In Dubai, where public schools are largely limited to nationals, education is a major cost for expatriate families. While some companies used to pay tuition for their employees’ children, that’s changing with firms covering only part of the cost or none as lower oil prices trimmed spending. Parents are also weighing their options after about 15 new schools opened last year.

“The entire premium school sector is coming under pressure and it comes down to the price and what parents can afford,’’ said James Mullen, co-founder of WhichSchoolAdvisor.com. “Five years ago, you would be lucky to get your kid into a school, but now there is a lot more choice for parents.’’

GEMS Nations yearly tuition ranged from about 84,000 dirhams ($22,870 ) to 124,000 dirhams when it first opened. That compares with as much as about 80,000 dirhams at Dubai American Academy.

“We recognise that DAA families have asked for upgrades to infrastructure and facilities, while families at GNA have asked for a more extensive offering,” GEMS Education Chief Executive Officer  Dino Varkey said in the statement.

Mid-range schools, with fees between 30,000 and 50,000 dirhams, fared best in Dubai, a city of 2.8 million people, Mullen said. He pointed to one of the group’s new schools: GEMS Founders School, which managed to enroll almost 2,000 students since it opened last year, he said.