The changing Scuba Industry

[Wookie]

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A ScubaBoard Staff Message...

This post was in another thread and starts a new and interesting topic of its own about the changing nature of the scuba industry.

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This statement requires further clarification.

The industry is changing. Divers are getting older, and the younger divers tend to spend their money on experiences instead of investing in a past time. The dive industry is starting to figure that out, and DRIS is moving as quickly as they can to embrace the changing market and diving demographic, but many just sit around and bemoan the fact that it isn't what it used to be.

I am one of those. I don't think it's my age, I think it's that I really enjoyed catering to the old style rough tough dive anything person who learned to dive and "became a diver". Those folks are out there too, but we see far more folks who want to do a 2 tank resort course, see the reef, and go sailboarding (is that a thing anymore?) paddleboarding in the afternoon.

I chose not to cater to those divers, had the opportunity to sell my business and jumped at it. DRIS is still working out how to cater to both demographics, but to be sure, the folks who invested $3500 in a full set of gear before taking OW class (raises hand) are dying out. Literally, they are getting older and getting out of the scuba game. There are a lot of charter boats out there that still run full. They just don't have the customers on them that I want to cater to.

Manufacturers are the same way. Their business model is based on a person taking lessons, buying gear, and replacing it every 5-10 years. That isn't the current business model, so the manufacturers don't know which way to jump. You want to buy a certification agency? I know of 2 for sale, including PADI. You want to buy a manufacturer? ScubaPro is up (or was up) for grabs. 2 biggest names in diving AFAIC. You got the cash you can have one or both. But beware.... They don't work like they used to.

 

[cruisekingkris]

Times are a changing. It's adapt or be left behind. DRIS is adapting and they seem (from the outside) to be doing a good job. I have ordered from them on a few occasions and I have had great experiences with them. As a customer you should always do your homework and if that includes calling them to make sure they have a part before ordering it online, well then do it. It doesn't take anytime at all. You never know, you might get some useful information from the kind people on the phone. Great job guys,gals and K9. Keep it up. If I lived closer you would get all of my buisiness and service.

 

[diver0008]

...the younger divers tend to spend their money on experiences instead of investing in a past time.

...we see far more folks who want to do a 2 tank resort course, see the reef, and go sailboarding (is that a thing anymore?) paddleboarding in the afternoon.

Their business model is based on a person taking lessons, buying gear, and replacing it every 5-10 years. That isn't the current business model, so the manufacturers don't know which way to jump.

This is new and interesting information to me - thank-you for it.

As I try to wrap my head around this, a few questions come to mind.

1. Is SCUBA diving losing popularity in general? Are there less people booking packages with dive ops? Less people going on liveaboards? Less people seeking certification? Are the dive ops sufferring too? Is this simply a problem of decreasing sales volume affecting everyone?

2. Has the rent vs. buy ratio changed significantly?

3. How does the Asian market figure into this? From what I have heard, the activity is growing among the Chinese, for example, with the changes in their economy. Are their puchasing behaviors different to those in more established areas, age demographic notwithstanding?

4. There does not seem to be stresses in the market from increased volume of competition among manufacturers, but the large movement to on-line purchasing has certainly forced retailers to tighten margins to compete in a more transparent sales environment. Are the manufacturers simply feeling the trickle-up effects of consumers now having the ability to quickly find the lowest price?

5. I understand the risks of holding inventory for a retailer. I have seen this risk managed in other industries in different ways, and with varying degrees of success. Sometimes with independant regional or national stocking distributors. Sometimes with direct sales from the manufacturer to the end-user. Sometimes with a retailer acting solely as a non-stocking sales agent for a group of manufacturers. In other industries, a large volume of small sales channels have been replaced with a smaller volume of larger ones. Are there too many retailers in the SCUBA industry?

6. Are exclusivity contracts part of the problem? Are retailer consignment contracts an issue?

7. Is this consumer behaviour of the young/new divers expected to be transitional? Is this presently a problem of more people with less money, or less people with enough money?

I am very curious about all this.

A healthy industry is a good thing.

 

[boulderjohn]

This has turned into a very interesting discussion that has nothing to do with the original purpose of the thread or its location. I know that I for one an very interested in seeing it continue. May I suggest that someone start it anew in a different forum?

EDIT: I split it off myself.

 

[Wookie]

This is new and interesting information to me - thank-you for it.

As I try to wrap my head around this, a few questions come to mind.

1. Is SCUBA diving losing popularity in general? Are there less people booking packages with dive ops? Less people going on liveaboards? Less people seeking certification? Are the dive ops sufferring too? Is this simply a problem of decreasing sales volume affecting everyone?

2. Has the rent vs. buy ratio changed significantly?

3. How does the Asian market figure into this? From what I have heard, the activity is growing among the Chinese, for example, with the changes in their economy. Are their puchasing behaviors different to those in more established areas, age demographic notwithstanding?

4. There does not seem to be stresses in the market from increased volume of competition among manufacturers, but the large movement to on-line purchasing has certainly forced retailers to tighten margins to compete in a more transparent sales environment. Are the manufacturers simply feeling the trickle-up effects of consumers now having the ability to quickly find the lowest price?

5. I understand the risks of holding inventory for a retailer. I have seen this risk managed in other industries in different ways, and with varying degrees of success. Sometimes with independant regional or national stocking distributors. Sometimes with direct sales from the manufacturer to the end-user. Sometimes with a retailer acting solely as a non-stocking sales agent for a group of manufacturers. In other industries, a large volume of small sales channels have been replaced with a smaller volume of larger ones. Are there too many retailers in the SCUBA industry?

6. Are exclusivity contracts part of the problem? Are retailer consignment contracts an issue?

7. Is this consumer behaviour of the young/new divers expected to be transitional? Is this presently a problem of more people with less money, or less people with enough money?

I am very curious about all this.

A healthy industry is a good thing.

My wife and I operated a US based liveaboard for many years. A US based liveaboard is a very different animal than a non-US liveaboard. She now is a DM on a day boat, and does equipment service in a dive shop. I am a ship's engineer for a day job, and am heavily considering getting back into teaching. I will take a stab at your questions, but I am just one guy (industry insider) and my opinions vary considerably from main stream dive shops/operators. I have chosen not to get back into the industry at this time, although we are ruling nothing out for the future. We were known as being rigid in our rules (read:buttholes) but anyone who dove with us, whether they likes us or not, never complained that they felt unsafe.

So, is scuba diving losing popularity in general? No. I wouldn't say so. But the way that people who are entering the sport is changing. As I said before, and my wife and I discussed this at dinner, divers would always come to the shop to take training, and would often (maybe 50% of the time) leave with a full package. And by the end of class, everyone had something aside from basic equipment. Now, they go to a destination, sign up for a resort course or a short course, and buy nothing, not even basic equipment. The old paradigm was that dive shops in home towns sell equipment. The new paradigm is that divers show up at their destination and dive in the morning and fish in the afternoon. They don't buy gear. I can tell you that as a destination who offers gear sales and training, we love it when folks show up with their e-learning finished, we run them through a course review and slap them in the pool.

I can't tell you if folks are booking fewer diving packages. I live in Key West, and our hotels are $329 a night. That's a lot of dough for young folks to come hang out and learn to dive. If you are interested in Caribbean liveaboards, look in this very forum. Many are offering a $500 a week discount, and some more or less. Are fewer people seeking certification? I don't know, but there are too many instructors for anyone to make a living doing it. Are dive ops suffering? In the keys they are sucking it. Is decreasing sales volume effecting everyone? I would say not everyone. DRIS and DGX seem to be growing. I can't say if it's good service or having stock or something else. I know 50 dive shops that went under in the past 10 years. A small handful of manufacturers, and the consolidation is rampant. Mares bought SSI and rEvo. SSI and PADI barely have any training department left. I'm told by SSI instructors that if you call SSI that you get a call center in Boca that is not manned by training professionals. I know the ex-head of PADI training. Her entire department was laid off, 2 of the 6 went to sales. The rest contract to PADI on an as needed basis. You make your own call.

Has the rent vs buy ratio changed? I have never rented. I can tell you with some authority that sales are plummeting in traditional dive shops.

Asia? I have tunnel vision. If it isn't the US or Caribbean, I can't talk intelligently at all. We get lots of Indians here in Key West who can't swim, they still want to learn scuba.

 

[Bubblesong]

This stock analysis link talks about how action adventure equipment providers are doing badly, while golf, trucking, bowling, and just cardio exercise equipment, apparel and sneakers are doing great.
I wonder if there is an inverse relationship with western population getting more obese and out of shape, and whether people today simply know they can't do the sustained, hard work that hardcore SCUBA can be.

https://www.google.com/amp/s/www.th...ies-to-consider-for-your-stock-portfolio.html

 

[Marie13]

I'm surprised at the number of people getting certified at "older" ages. I got certified at 47 back in October. I know a couple of other people who got certified last summer, early 50s guy and a woman in her early 60s. I was the oldest person in my OW class, but I saw several people who appeared older than I am who took Advanced specialties at our local quarry last fall.

Wookie, I was one of the apparently dying breed that bought all my own equipment (including a dry suit) in the midst of my OW class, but before my checkout dives. The others may have had their own wetsuit.

 

[KeithG]

My impression is that scuba diving is becoming more popular with the millenials. But only as a check list "done that" item.

But they do not view it as a life long passion, or even a short term hobby. It is all viewed in a 1 week (or less) minimal efforrt horizon.

This means they will do a Discover Scuba Diving encounter or maybe they may max out at getting referral or resort certified. And then do a few dives on an upcoming vacation.

End of story. Been there done that. What's next?

I have no idea how to adapt to this view. I am a member of several clubs who have spent years trying to figure out how to attract younger members since the current members are dying off.

 

[TMHeimer]

I too bought (almost) all my stuff (most used) during OW course. Didn't pay any $3,500 though (even in C$). Maybe old tightwads like me are one cause for what some say is a declining industry.

 

[KeithG]

and... for all of us old farts, we are now smarter than we used to be. There is a ton of information out there. We are not chained to our LDS. We can learn stuff through many different internet channels. We can also buy stuff through many different channels. We can be more informed and can make better purchasing decisions.

My LDS seems to be the last place I would go to get something...