There is a clear trend toward online and hybrid instruction options in colleges across the United States, and this isn't likely to change anytime soon. While this may seem like a negative catalyst for student housing operators like American Campus Communities (ACC), Fool.com contributor Matt Frankel isn't so sure. In this Fool Live video clip, recorded on Dec. 16, Frankel and fellow Fool.com contributor Jason Hall discuss why remote learning isn't nearly as much of a threat as you might think.
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Matt Frankel: A lot of people seem to be concerned about online education and how it could be a disruptor to that business. One says, "The pandemic may have changed online higher education interest." One says, "How much is remote learning a crock in their moat?" which I love that term.
I would say don't underestimate the desire of college students to be on campus and have the college experience. I'd say this because think of Fall 2020, virtually, every college in the U.S. was remote to one extent or another. Some had a few in-person classes, some had some hybrid experiences. But for the most part, all colleges were virtual in one way or another. American Campus' occupancy to start the fall 2020 semester was well over 90%. Their average fall occupancy is 97%. They were about 90.8%, I want to say, in fall 2020.
It's a fall from their historic average, but still with over 90% of their units leased to start to Fall 2020 semester. College students want to be on-campus. There is a big opportunity to grow this business and coexist with online learning. If I were a college student, I would absolutely want to take classes from my laptop. But I wouldn't want to live in my parents house while I was doing it.
Jason Hall: Right.
Frankel: I think that's what people are missing on the distance education. College students certainly want to take classes remotely. Don't get me wrong.
Hall: You know what parents want? Their kids to move out.
Frankel: Right. Especially if they know their kids have a nice and safe place to live. By the way, American Campus Communities properties don't kick kids out over spring break, Thanksgiving break, or winter break.
Hall: Like the dorms do.
Frankel: Like the dorms do.
Frankel: There are other advantages as well. I would have loved to have remote classes in college, but I also would've loved to live in one of American Campus Communities properties while I did it.