Part 1 of 2:
I have been a SCUBA instructor for over 30 years. Ive taught courses for NAUI, PADI, TDI, and the YMCA. I have worked as a commercial diver for Oceaneering and have trained and certified people from all walks of life including: housewives, marine biologists, US Marines, Navy Divers, a Hollywood actor, and even a NASA astronaut.
Diving has been one of the greatest passions of my life since before I was old enough to pronounce scuba, yet, this year, Ive taken the conscious decision to quit teaching diving. Its not because of age (Im only 49), or health (Im in fine shape), or other such reasons. I have decided to quit simply because I dont believe that the dive industry deserves to have dedicated and passionate instructors who are willing to work for free any longer. I dont mean this to sound pompous and cynical, as in fact it is literally a heart-breaking decision for me to take this step. For the past 30 years, I have truly LOVED being a scuba instructor. But this industry has NEVER loved me back. In 30 years of teaching SCUBA diving, it has never earned me a nickel. This article is my last-ditch attempt to talk some sense into this dysfunctional industry.
The recreational scuba diving industry (and in particular the dive training segment of the industry) has suffered from a broken business model practically since its inception in the 1960s. Thirty years ago, in 1981, the year that I first became the worlds youngest NAUI instructor at age 19, dive shops across Florida started offering then discounted $129 Basic Scuba courses in an effort to out-compete one another for students. The going price then was about $150 to $175 for a basic course, so $129 was a bargain.
Today, in 2011, 30 years later, I find entry level on-line scuba courses being offered for that exact same price or even less. Doesnt anyone else in this business see something wrong with this ?
Intuitively, dive shop owners realized a long time ago, that the only market for retail dive equipment is certified divers; so their strategy was (and has always been), to certify as many divers as you can and then sell them equipment and air fills to try and make a profit. Dive training has most often been treated as a loss-leader product, in an effort to create customers to whom to sell equipment, service, air, and exotic trips.
But its the training of divers itself, which is the cornerstone of the recreational dive industry. This, in spite of the fact that dive shops, training agencies, and seemingly everyone running the training agencies treat training as though its an inconvenient nuisance on the way to selling gear or trips to divers.
The first casualty of this defective philosophy over the years has been the independent instructor. The second casualty has been the continually diminishing quality and training standards allowed by all of the recognized training agencies. I personally am deeply disappointed in NAUI, who historically had built their brand-value in terms of being known as the elite training agency, with the highest standards for all levels of certification, particularly for instructors. Over the past 10 to 15 years, they have followed in the footsteps of PADI and diminished their standards to the point that they are indistinguishable from any of the others. This is unforgiveable.
The independent instructors of decades past were the truly experienced and passionate teachers who mostly trained entry level divers through institutions such as the YMCA, or in universities. I counted myself among them, and per NAUIs then motto; safety through education, we were the most devoted to providing complete training at the entry level, with a real academic and practical content. We were committed to training and developing COMPETENT certified divers from the very first course. Courses then were 8 or 10 weeks long, and included at least a dozen classroom hours, and at least 20 hours of practical in-water training, BEFORE conducting check-out dives. That was a basic course.
Unfortunately, providing quality training of that type today is economically impossible unless the instructor is willing to subsidize it. Now, any illiterate moron can spend a few hours going through an on-line picture tutorial, followed by a few more hours in a pool and maybe 2 dives in a lake or quarry with an instructor, and voila, theyre an open-water diver.
Dive shops, in order to stay in business, must by definition minimize their cost-basis. With incessant pressure from the industry to keep lowering their prices for training courses, they have systematically eroded training standards to the bare minimum, and now offer on-line courses where the only time a student sees an instructor is for 2 or 3 pool sessions, and a couple of so-called open-water dives. Students today have little if any opportunity to learn from the experiences of their instructors via the stories we used to tell during the classroom training?
Another dynamic that no one in the retail dive shop business seems to get, is that those same dive shops are competing for retail equipment sales with on-line discounters, while they themselves continue to suffer from high overhead costs, having to maintain expensive capital equipment in order to provide compressed air, gases, or maintaining a swimming pool for training purposes. As such, they are forced to sell their equipment at slimmer and slimmer margins, with inventory turnover increasing to longer and longer periods, further exacerbating their cost-bases. I have seen several shops recently offering to apply the cost of an entry level training course, toward the price of an equipment package sold to the dive student. That shop eventually heavily discounted the price of that package to match an equivalent package from on on-line discounter, and then still applied the open-water course fee to the purchase.
Again, the shop sold the equipment at single-digit margin; while having given the training to the student for free (as a loss-leader). Does that dive shop owner not realize that he has lost a significant amount of money by giving away a perishable commodity to that customer? An intelligent business manager would eventually realize, that selling cheap or even free training as a loss-leader in order to get retail equipment sale business that winds up having little or no margin itself is a recipe for bankruptcy. None of this even considers the hidden cost associated with the RISK OF LIABILITY, an instructor incurs when teaching a scuba course. It is better to walk away from a piece of business that will lose you money, than it is to pay someone for the privilege of providing them with a service , that puts the provider themselves at significant financial risk.
The industry has become a ridiculous joke to those of us who take the sport seriously. Making a mistake during a scuba dive can kill a person, and yet the training agencies (and compliant dive shops selling free or cut-rate training) have sent the message to the market that any 4th grader whos reached the ripe old age of 10, with a spare weekend, can become a certified scuba diver. After thousands of dives over 35+ years, I can tell you that diving accidents really do happen even to very skilled and experienced divers. I have seen a number of people die doing this sport, even ones who followed the rules and did everything right. I dont know a single 10-year old that has the maturity to deal with an unplanned adverse event underwater that is potentially life-threatening to themselves or another diver.
Today, unknowledgeable consumers who hold an interest in learning to dive, go and research the market only to be provided with unrealistic expectations in terms of what extent of training should actually be required to become competent, as well as what it should cost to obtain that training. As a consequence, people seeking dive training nowadays have come to expect to become certified in a weekend for $100 or less, even if they have no more than a 4th grade understanding of math and physics, are not fit enough to jog more than 5 minutes without collapsing. After all, the industry has bent over backwards to give the market the impression that this is the standard of how dive training can and should be delivered.
The few remaining independent instructors today simply teach cut-rate courses (increasingly over just one or two weekends at most); through a local shop in return for free air, a discount on gear, and perhaps a few bucks for gas. More often than not, they dont even earn enough to cover the cost of their liability insurance, travel costs, and personal equipment requirements. After more than 30 years of teaching diving myself, I have NEVER, earned enough to cover my costs in delivering first-class training to people engaging in what should be considered a high-risk; highly skill-based sport.
In more than 30 years, the so-called professionals in this industry have learned ABSOLUTELY NOTHING. In fact, it is this authors opinion that the recreational SCUBA business has digressed as an industry model. The two most recent changes: 1) lowering the minimum certification age to 10 and 2) offering on-line tutorial type courses. These constitute the two biggest mistakes the industry has made in a decade. These changes have by default, required that the market price of entry level training be driven even lower.
The implications to competency and safety notwithstanding; the economic stupidity of this model is what I take particular exception to. The fallacy is in making the assumption that simply lowering the cost of training (or even providing it for free) will actually increase the number of students and encourage more people to become certified divers, and then continue diving for years after certification.
Year after year this assumption has been proven to be absolutely false, but dive shops, training agencies, and even many instructors themselves have continued to ignore reality; and instead have systematically driven the dive industry toward a business model based on this erroneous assumption (In economic theory, this is known as the principle of price elasticity of demand). In principle, the demand for a product or service is not necessarily always dependent upon its price. It depends upon the nature of the product and its purpose. In fact, for some products or services, lowering the price actually causes the market demand for it to contract.
Historically, people who seek out dive training generally DO NOT do so as an impulse buy. They generally engage in a thoughtful decision-making process and are motivated to learn to dive by some desire that transcends simple need. Most of the time, it is a desire for adventure; some vision they hold of how experiencing the closeness to nature will enhance the quality of their lives in a way that few other experiences could. Scuba diving is something a person really MUST WANT to do; before he or she will invest time, money, energy as well as assume the physical risks and effort of doing so. That in itself is indicative of the fact that people seeking dive training dont initially shop for it based on price.
The cost of training should be the least relevant aspect in terms of whether or not someone will decide to become certified to dive, but the actions and attitudes of the dive training agencies and the industry in general has set the precedent to make training the most trivial, cheapest, and least important aspect of the sport. The consequence is that everyone involved in teaching scuba has to practically give it away just to have someone to teach. Sorry, but that does not constitute a respected profession. Even cheap hookers dont give it away.
Its for that reason that the market price for dive training is not primarily driven by consumer demand, and therefore is not determined by that demand. In other words, a training course that costs $ 99 per person is not any more attractive to those who want to learn to dive, than a course that is $499 per person. The price simply doesnt drive the demand. Furthermore, the price charged for dive training, should clearly (at least in-part), be a function of the cost to deliver it. Unfortunately, this has never been the case.
To support my assertions, I would like to offer here some economic facts for you so-called professionals in the dive industry, but first let me provide a bit about my own background here for context. Aside from having spent the past 30 years as a part-time dive instructor (part-time by necessity
. since this is no way to actually earn a decent living), I have a Master of Science degree in mechanical engineering from Penn State, a Master of Science degree in Finance and Economics from Purdue, an MBA from INSEAD (the number 2 ranked business school in Europe), and I have spent the past 8 years running an aerospace company with over 500 employees and $150 Million revenue. Ive published articles and photographs on diving in Sport Diver Magazine, worked in my younger years as a commercial diver in the Gulf of Mexico, and have published trade articles on economics and industry in various publications such as Harvard Business Review, Wall St. Journal, and The Economist. Also over the course of the past 25 years, I have started and sold a successful company, was a partner in a private equity fund, and had spent my first 3 years out of college working as a flight-test engineer for NASA at the Kennedy Space Center in the late 1980s.
As such, I know a thing or two about technology, economics, and business.
In light of that, here is fact number 1:
Offering CHEAP dive training does NOT increase the number of people who will sign up for that training, nor does it increase the number of certified divers who will CONTINUE TO DIVE AFTER CERTIFICATION.
In fact, offering cut-rate dive training has the exact opposite effect.