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From Gearing Up to Going Places: Examining a Sea Change in the Scuba Industry

I attended my first DEMA (Diving Equipment and Marketing) Show in 1981 and it was the first time as an adult I truly experienced the expression “kid in a candy store.” What I witnessed was aisle after aisle of things I wanted — and things I didn’t even know I wanted. It felt like the entire dive industry was laid before me in the Las Vegas Convention Center. However, in addition to all the toys — interspersed between all the equipment displays — were a number of resort destinations and the usual assortment of training agencies. But make no mistake, this was an equipment show, and all else seemed ancillary. It exemplified an industry that had one primary purpose — selling dive gear.

In the intervening years I’ve been fortunate enough to attend most DEMA Shows and, as I walked the show floor, I began to notice subtle changes that had less and less to do with equipment technology. Each year it seemed the DEMA Show was adding a few more dive resorts and tourism organizations from far-flung corners of the world, as well as travel services designed to support them. Today, as anyone who has been to a recent show can attest, DEMA appears to be as much about travel as it is about equipment. In fact, while some may disagree, to me the DEMA Show today appears to be more about travel than equipment.

Yet, the predominance of travel should come as no surprise to anyone who has been paying attention. I entered the diving industry full-time in 1976 and there was no question we were in the business of selling equipment and training folks how to use it. So, most dive centers devoted their time almost exclusively to selling equipment, while most instructors devoted most of their time to training. Of course, there were some exceptions, but most dive professionals who did not work in the resort sector saw travel as a secondary priority — more or less an alternative to their local quarry, lake, beach or wreck diving (which is where most emphasis was placed). In fact, during my early career one of my bosses actually referred to travel as a “necessary nuisance.”

Well, to paraphrase a song about an ol’ gray mare, “The dive industry ain’t what she used to be.” Today, the predominance of travel is also supported by the data. A recent report from the business-to-business research group MarketsandMarkets™ pegged all sources of scuba diving equipment sales at about $2.7 billion in 2016. (This figure, by the way, includes not just recreational but commercial and military sales.) By contrast, a recent study by The Nature Conservancy found that dive travel generates over $17 billion dollars annually. Even the MarketsandMarkets™ source emphasizes the role of dive tourism. While their report predicts a 4.05 percent compound annual growth rate (CAGR) by 2021, it goes on to say, “This growth can be attributed to the rise in the average income of the people, especially in emerging economies, such as India and Vietnam. The dive tourism, particularly in the European region, is also a key factor fueling the growth of the diving equipment market.”

Though again some may disagree, I see the evidence as pretty conclusive: The recreational diving industry today is, at its core, really a specialized sector of the worldwide travel and tourism industry. Equipment sales and training are merely support services required to qualify customers as what the tourism industry terms “specialty travelers.”

THE CHANGING TRAVEL AND TOURISM INDUSTRY

While the focus of this discussion is dive tourism, to really understand what’s going on in our world, we must first have a broader perspective. Often dive industry professionals are surprised to learn just how large and important the international tourism industry is, and what role it plays globally. According to the United Nations World Tourism Organization, in 2012, for the first time in history, the number of international tourist arrivals exceeded one billion. And this trend is expected to continue. International tourists are predicted to reach 1.8 billion by 2030. Furthermore, according the World Travel and Tourism Council (WTTC), tourism accounts for more than nine per cent of global Gross Domestic Product (GDP), employs over 200 million people and accounts for almost a third of all income derived from the services sector. In fact, in terms of global exports, international tourism ranks fourth after fuels, chemicals and automotive products.

Big numbers are impressive, but what about growth? Again, according to the WTTC, tourism is growing at an annual rate of between seven and 10 percent. For example, in 2017 there were 1.323 billion international tourist arrivals worldwide, representing a growth of 6.8 percent as compared to 2016. However, and this is important from a dive industry perspective, not all sectors are growing at the same rate. Many experts consider what’s referred to as “sun-sea-and-sand” travel a mature market and project only an average to flat growth rate in the coming years. But not so in the realm of ecotourism and other forms of nature- and adventure-based tourism (terms we’ll explore more fully in upcoming columns). In these sectors growth is more on the order of 20 to 35 percent per year, or three times that of tourism as a whole.

In terms of dive tourism, according to a research study from The Nature Conservancy, currently around 14 million divers travel each year to overseas destinations, accounting for more than U.S.$ 19 billion in revenue. And make no mistake: dive tourists are high-value tourists, spending on average about twice what a non-diving tourist spends. For example, according the World Resource Institute, in the Caribbean alone, while divers make up only 10 percent of visitors, they contribute 17 percent of all tourism income.

Still, not all news is good — tourism is the classic double-edged sword. It’s no exaggeration to say that it has truly become a juggernaut. As mentioned previously, seven years ago, for the first time, international tourist arrivals (overnight visitors) broke the one billion mark. While that’s an impressive number, the true scale of growth is staggering compared to the 1950s, when international tourist arrivals were in the range of a mere 25 million annually. That’s a whopping 4,000 percent increase over the past 70 years! By 2025, the number of tourism jobs is projected to rise to 356 million and tourism’s contribution to the global economy is forecast to reach U.S.$ 11 trillion.

While this is encouraging news about the growth of travel, some of the consequences of tourism have been, and will continue to be, less than desirable. Overall, at many destinations around the world, this tidal wave of tourists has resulted in what’s been dubbed overtourism, a term which probably needs no explanation. The scenario leading to overtourism is explained in a well-documented phenomenon known as the Butler Model (named for its originator, Richard Butler) or more commonly the Tourism Area Life Cycle (TALC). The purpose of the TALC Model is to look at the way tourism destinations grow and develop. Like all industries, the tourism industry is dynamic. And the Model is a way of studying destinations by examining how they change over time in relation to the changing demands of consumers and the tourism industry. These changes can then be compared to the predictions as described in the model and breaks down into the five distinct stages of development including:

1. Exploration — A destination is first explored or discovered by a small number of people who later tell others about their experience. In turn, locals seize upon this limited but new economic opportunity by providing services to meet tourists’ needs. At this stage, destination characteristics include small numbers of tourists based on a single primary attraction, with no secondary tourism attractions. And at this stage tourism has no critical economic or social significance to local residents. Think Raja Ampat in the early 1990s.
2. Involvement — At this stage more tourists arrive having heard about the destination by word of mouth and, especially important today, via social media. This increased tourism leads to new infrastructure to support the growing numbers. And at this point locals become involved in tourism, so there’s often emergence of secondary tourism facilities such as guesthouses. Based on local factors a tourism season may develop and pressure develops for governments to improve transportation infrastructure.
3. Development — As still more visitors arrive, facilities are now fully utilized. At this stage mass tourism replaces what was once the original economic function of the destination. This often causes resentment among locals who have not benefited from the new industry or see loss of the destination’s distinct cultural identity. In many cases the local culture is diminished by a more international culture compared to what existed originally. Local involvement and control of tourism declines rapidly and external entities provide extensive secondary tourism attractions. Some call this the Disney Effect characterized by high numbers of tourists that may even exceed the local population during peak periods. By now, a concerted advertising effort has created a well-defined tourist market.
4. Consolidation — At this stage, as carrying capacity is reached, the numbers of tourists exceed the local population during all times of the year. The area’s economy is now tied to tourism and marketing and advertising expands. Major franchises and tourism chains are represented and there’s often a well-defined recreational business district. It’s hardly surprising that at this stage tourism arouses opposition and discontent among locals.
5. Stagnation — Visitor numbers have reached their peak and carrying capacity has been exceeded. (For example, by 2030, the Netherlands could have 42 million tourists, yet its population is barely 800,000.) The initial appeal of the destination has waned as little of the original natural environment is left or has been significantly degraded. The destination may even become completely divorced from its geographic environment. Negative comments lead many tourists to find new destinations to discover. This leads to economic decline and the under-utilization of tourist infrastructure. The eventual closure of some of the businesses lead to a rise in unemployment, resulting in many environmental, social and economic problems. Artificial tourism attractions now supersede the original primary attractions and, while the area still has a well-established image, it’s no longer fashionable.
6. Decline or Rejuvenation — The destination now has one of two options: either continue to decline or rejuvenate and develop more sustainable strategies based upon lower visitor numbers. There are five possible scenarios according to the TALC Model:

A: Successful redevelopment leading to renewed growth.
B: Minor modifications to capacity levels lead to modest growth.
C: Tourism stabilization by cutting capacity levels.
D: Continued overuse of resources and lack of investment leading to decline.
E: Some local natural or human-caused catastrophe results in a collapse in tourism.

As we’ve seen, tourism destinations can be ruined simply by having too many tourists, hence the concept of overtourism. Unfortunately, examples abound including Venice, Italy, Santorini, Greece and Thailand’s famous Maya Bay, where the movie The Beach was filmed. However, at destinations where the primary tourism product is nature itself, decline can occur long before the overabundance of tourists becomes obvious. And the plight of coral reefs — the bread and butter of dive tourism — is a prime example.

PLIGHT OF A DEGRADING RESOURCE

While diving takes place in almost any body of water large enough to make a safe entry, few would dispute that the basis of dive travel are the world’s coral reef destinations. In fact, it’s tough to imagine the dive industry’s survival without coral reefs. But as any seasoned dive traveler knows, coral reefs have declined significantly both in quantity and quality. According to studies by the World Resource Institute and Global Coral Reef Monitoring Network, at present, local human activities threaten an estimated 60 percent of the world’s reefs (75 percent when including thermal stress). By the 2030s 90 percent of coral reefs will be threatened by human activities, warming and acidification, and 60 percent will face high, very high or critical threat levels. Most alarmingly, if we continue on the current business as usual trajectory of carbon dioxide emissions, coral reefs will likely experience annual bleaching events by 2050, essentially spelling their demise.

In the Caribbean, the heart of North American dive tourism, coral reefs have declined to once unimaginable levels. In the past 40 years the region has lost more than 80 percent of its coral cover. And while not as severe, the problem is becoming widespread in the Indo-Pacific region. Studies there document a decline in hard coral cover from a region-wide 42 percent to 22 percent since 1984, with an annual rate of loss of two percent per year.

While tourism is certainly not a major cause of global coral reef decline, it’s not entirely blameless, either. But regardless of blame the situation should herald dedicated response from divers and dive professionals alike. However, an effective response to any problem requires that one first understand the cause. And the reason for the sorry state of coral reefs is no mystery. It’s exemplified by the concept of death by a thousand cuts — a synergy of many stressors combining to spell catastrophe. The reasons for coral reef decline can be categorized into three areas: 1) Global Threats; 2) Direct Human Pressures; and 3) Human Dimensions. Based on these categories, according to the Global Coral Reef Monitoring Network, there’s a litany of factors explaining why coral reefs are currently circling the bowl.

Threats from global climate change are well documented and are probably already familiar to most dive professionals. The one in the media most recently has been coral bleaching caused by elevated sea temperatures. According to data from NASA, the top 2,300 feet (701 m) of the ocean has warmed more than 0.40 degrees Fahrenheit since 1969. That may not sound like much, but given the amount of energy required to raise the temperate of water compared to that needed to raise the temperature of air, it represents an enormous quantity of heat. But there’s a double whammy for the ocean (and coral reefs, specifically) in that not only is it getting warmer, rising levels of carbon dioxide entering the sea causes the ocean to become more acidic (lower the pH). The net effect is dissolving existing reefs and retarding the calcification (growth) of both of future coral reefs and other reef organisms. In fact, this is no longer conjecture. Significant dissolution of the coral reefs off the northern Florida Keys due to ocean acidification has been well documented in recent studies by researchers from the University of Miami — and similar results have been found for the Great Barrier Reef. Evidence is also convincing that the warming water has brought with it more the two-dozen diseases of coral reefs and reef organisms, most recently the Stony Coral Tissue Loss Disease currently infecting Florida and the Caribbean. Then, add into the mixture an increasing plague of coral predators, such as crown-of-thorns sea star and invasive species such as the lionfish invasion of the Caribbean, and there’s little mystery as to why coral reefs are in serious trouble. All of these stressors are linked to human origins.

In the realm of direct human pressures, unrelated to climate change, stressors include seafood harvesting, at both the local and global level, beyond sustainable yields. And on coral reefs destructive fish practices such as bomb and cyanide fishing wreak havoc. On land, sedimentation from poor land use, deforestation and dredging are major causes of reef decline almost everywhere. Add to that what’s carried with the sediments and run-off. Of late, strong evidence has been published showing that, in the Florida Keys, nutrient pollution (eutrophication) has been a bigger factor than even climate change. Along with nutrients, run-off from land contains heavy metals, both organic and inorganic chemicals and untreated or partially-treated sewage. A very recent study has shown reef damage from sewage pollution even on the isolated and sparsely populated islands of Palau. Finally, adding more straws to the camel’s back is the urbanization of coasts near coral reefs and poorly-planned coastal development, often to build tourism infrastructure.

Finally, there are factors related to what the Global Coral Reef Monitoring Network describes as “human dimensions.” These include rising poverty and increasing human population pressure pushing coral reef resources beyond sustainable limits. In developing countries, where many coral reefs exist, there’s a lack of trained personnel and resources for effective coral reef management. This leads to poor rule enforcement and the necessary environmental monitoring required to identify and respond when reefs show signs of ill health. But even in so-called developed countries there’s the general lack of awareness of the role and value of coral reefs. This leads to a lack of political will to take the steps necessary to bring coral reefs back to a healthier, most stable state. Perhaps the saddest consequence of the entire situation is that, for many years now, we have clearly understood why coral reefs are in decline. We just haven’t done enough to turn the tide.

THE BUSINESS CASE FOR CONSERVATION

There are few businesses as dependent on a healthy natural environment as scuba diving. As was mentioned, the industry would almost certainly not exist without coral reefs. So, ultimately the most vital inventory of any dive business, regardless of location, is not the hardware you sell but the coral reefs that sustain it. Turning this realization into action is what I call becoming more reef-aware. But by reef-aware I mean more than just caring about the plight of coral reefs and educating your clients accordingly. From a business perspective reef-awareness must be a bottom-up process of managing your operation in a way that recognizes that the health of the environment is inextricably tied to the health of your livelihood. There are many aspects to accomplishing this restructuring, which will be the subject of future articles. But success, at its core, will involve developing innovative strategies and creative programs that capture the competing interests of today’s dive traveler because, when all’s said and done, whether you’re a resort operator, retailer or a scuba instructor — we are all ultimately in the travel and tourism business.

(This article first appeared in Dive Center Business, https://divecenterbusiness.com/from-gearing-up-to-going-places-examining-a-sea-change-in-the-scuba-industry/)