jbd:I agree completely with Ricks post above.
For a little perspective on fee to learn something. Close to 10 years a go I learned to fly.
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Figure skating and ice dance lessons-
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Learning to ride and jump horses(not me but my daughter did) at the very lowest most basic level $35/hour plus a ton of associated costs that I shudder to think of.
So why should scuba lessons and the resulting OW certification be charged at rates that make the federal minimum wage look like Fortune 500 CEO's pay scale. After all isn't your instructor teaching you to go into an environment that you don't belong in? Do you want a professional or just someone that merits the pay of a 16 year old part time burger flipper/floor mopper?
I know piloting lessons are one-on-one, as my dad is a pilot. I'm not sure about figure staking, ice dancing and horse riding lessons, but I'm going to assum ethose are 1-on-1 as well.
That is where the difference lies. The OP said he had 8 people in the class. 8 people x $550= a big number. I'm sure most places you pay to rent the pool, per hour, not per student. So even with one student, you've paid for the pool, and you don't pay any more for the other 7 students. Some of the other stuff is not the same way....but the books and all are paid for by the student, I'm assuming they atleast break even on that sale. Gear is rented, by the student (some shops lump it into class cost.) Atleast where I got certified, you paid your entrance to the spring, and gas out there, etc. If you wanted to go to someplace nifty to get certified, it cost more.
If scuba was one on one training, I could undrestand the high cost. And if you hvae to do boat dives, I understand the cost. I think we had four air fills in my class? Pool two days, one fill per day, and then we used half the tank for each of the four dives, on two days. Anyways, I think with the fact that the instructor can teach so many people, the cost should go down. If it's a 3 student class, having one price makes sense, but if you have a 10 student class, give everyone a discount!
That said, I think there are probably rules on how many people one instructor can handle. I know on our hceck out dives we had a DM in training along to help out. He did it for free because he was working on his DM training. So the shop got help for free. I'm sure most shops can get help for free. When in college, I'd like to try to strike a deal with a shop to get training in exchange for working for them, with the goal of becoming a divemaster. That will be free work for them