Biggest thing killing dive shops?

[Eric Sedletzky]

I think @DevonDiver pretty much has it nailed, probably the best explanations I’ve seen so far.

It’s pretty simple.
LDS’s and maybe the industry as a whole is not seeing some very obvious problems.

Dive shops can’t compete with online gear prices, they just can’t. Online dealers can’t compete with the physical things that dive shops can do, like training, air fills, and personal face to face interaction.
So why are dive shops discounting training down to making nothing then trying to sell gear at top dollar to make up for it? It’s backwards.

The problem is, there would have to be a lot of very painfull changes made to the industry to change this.
First of all, manufacturers would have to abandon the “authorized dealer” model where their network stores are held to minimum pricing schedules. The shops have to buy their stock outright so technically they own it. They should have the right to sell it for whatever they want without any threat of being cut off.
Until manufacturers change this then dive shops sre sitting ducks.

Second, instructors need to somehow unionize and collectively demand higher pay. If these agencies can’t find instrucors willing to work for sub human wages maybe they will have to adjust things to stay in business.

There are many other industries that are going through similar problems. The auto collision industry for one. Wages are frozen for technicians because the entire industry is funded by the insurance companies that refuse to pay shops their door rates.
The insurance companies essentially have the shops by the balls because if they don't take what the insurance offers to pay then too bad. Bottom line the tech gets screwed because the money just isn’t there.

I’ll add that that what goes on in Koh Tao with young indentured slaves is not what goes on in other parts of the world. I was told when I first went into my LDS years ago when we had a discussion about getting certified, that what I get in some warm water wonderland probably will not be sufficient to dive our colder and more challenging waters. But If I certified here then I could dive anywhere in the world. I certified here.

If someone spends the money to fly somewhere just to get certified cheap in warm water, then I have trouble taking those people seriously as people who will dive anywhere but in the conditions they certified in. This is another problem that gets beaten to death here on SB, is diver retention. How long can the average person with bills keep flying half way around the world to do their 12 dives a year in a paradise?

I think there should be a higher value placed on the training we get at home. It’s harder, it takes more time, there’s more gear to deal with, there are harsher conditions to deal with, there’s more logistics and travel to deal with. Plus this is California, we expect things to cost more when it comes to someone’s time in services, but not necessarily in gear, because although we pay more for a lot of stuff we’re not stupid either.

I could also see a future where air fills go up to a price that would actually be worth it for the dive shops. You can’t get fills online.

 

[HantsDiver]

I agree with a lot of what you say. But I just want to clear up a few inaccuracies. We were there at different times so I can only presume something has changed.

The instructors work for peanuts, or less, churning out endless courses of 8 pax every 2.5 days. Most have zero experience beyond Bans and Koh Tao. Most are zero-to-hero backpacker kids just out to get laid and party for a year. Those that don't flog enough continued education courses get sacked.

Most instructors there are not gap year kids. And have been there a long time. Many years. Con-ed or lack of it won't get you sacked at Bans now. People can't book courses if they have already booked a ferry.

None received any medical cover, pension, holiday pay etc... gross exploitation to drive a system based entirely on profit-by-volume.

To the thais working there receive these things? As a contractor in the UK working for multnationals, I don't get any of these benefits either.

Drug use and working whilst hungover or still inebriated was far from uncommon.

I never really saw this. And it would be much more likely to get you sacked at any dive business there than lack of selling con-ed.

Open water courses are the cheapest in the world, with accommodation thrown in... but nobody actually gains any diving competency. Their students can be seen bicycle-kicking, or even walking, around the dive sites, flailing and barely under any semblance of control.

Are you aiming that just at Bans or the whole island? You do know that RAID an agency which you are fond off have some of their management running a business there. A big one by all accounts - with the samish prices as Bans.

But the real money is made in the in-house bars and nightclub. I suspect that's where Bans gets rich. Nightly parties with hundreds of drunken kids until after 2am.. Diving is merely the loss leader that gets the kids to stay there.

Again diving is not a loss leader. At all.

What Bans, and the other sausage factories DO achieve is to provoke the most inane and self-defeating price competition. They can do so because agencies turn a conveniently blind eye to the abuse of standards and the exploitation of naive dive "pros".

It's not self-defeating - as it works. You said you were there over a decade ago. Bans, Buddha View, Cystal, Big Blue, Simple Life - all big big schools. How many of them were there? If the model was flawed most of them would go bust by now.

And I don't agree there are massive abuses of standards. You don't need to abuse standards to teach in that way. And I don't think any dive "pros" are being taken advantage off. Most of them earn a reasonable wage and are happy. Maybe things have changed there.

That's different to what typically happens..whereby dive shops feel obliged to conform to a bare minimum local costing (due to cost competition) and are forced to reduce quality of service to meet some small expectation of profit.

How is the quality of the service reduced? And how does that lead to profits being increased.

That situation is exacerbated in diving because the average consumer is uniquely unable to identify what factors constitute greater or lesser quality training.

Id suggest that if someone can't work out a 5/6 day course is going to offer more training than a 3 days course then they should be ticking yes on the medical form. The reality is that customers know - they just don't care.

It's also one reason why so many dive pros try to rectify training deficiencies by cajoling students to invest AGAIN in more training courses. Not to progress, but to fix the under-training from the previous course/s.

It depends on perspective. We probably both have UK driving licences - were you totally competant in all areas of driving when you got it? I know I wasn't. The same goes for my motoribke and HGC licences. The truth is that there is always going to be some level of self learning after any course. I think we should judge this on safety statitics. Many more people are killed/injured/crash when they are young drivers. Most deaths in diving happen much later in their diving career.So from that perspective the system is working very well.

 

[foresterab]

So this took a bit to get through it all but here's my two cents worth...

I only started diving 4 years ago and at that time there was 6 shops "local" to me which meant that they were all 2 hours away..5 east and 1 west. Within the year there is now 3...all in the major city. Why did they close?
1. Went into the shop and had to wait for 15 minutes upon which time I walked into the back to see the owner watching TV and not paying attention to the shop. Oh yeah...and the course I wanted started at twice the cost of any other shop...
2. Went into the shop and observed two things...the owner sitting at the till ranting about immigrants and that the gear that was way older than anything I recognized from previous training. closed about 3 months later...
3. Tried 3 times over a series of months to finally make contact with the "store"...turns out it was guided trips and rental gear options for a local dive site. However I'm not paying $300 to rent a basic set of gear...yes that's right.

Of the three that are left:
1. PADI shop where scuba is part of the sales. Also big into boogie boards/summer boat add ons etc. But good service when in the shop and they do offer a range of basic gear and support service work. Also a sponsor of the provincial dive organization who has events around the province through out the dive season
2. SSI shop that also does some additional support service work for gear. Has been always friendly to walk into and they are truly passionate about diving...doesn't matter who you're diving with or where but tell them you're going diving and they're enthused. My go to shop for rental gear and random add-ons. Also a major supporter of the provincial dive organization whom they promote in the shop to encourage not just travel diving but also local diving.
3. PADI shop whom I haven't had to the opportunity to rent gear from yet but have always had good service when walking in. Happy to answer questions and talk about what is going on not just now but also throughout the dive season.

The "local" diving from the shops takes place 1.5 -4 hours from the shops for the most part...and yet there is a constant stream of folks going in to do training for vacations. The shops acknowledge most divers are warm water divers and well...Alberta is not warm water diving - in fact damn cold - but they try to show folks that there are options. Most importantly they highlight local diving options especially via the provincial club events, west coast cold water diving, and tropical options. Train for the cold and you can do the rest...

Because the dive season is so short they also promote winter pool days where you can try gear, practice skills, and socialize locally without the need to travel airflights away to sunny locals. Keeping folks engaged year round is the best way to continue promoting the sport and they're all active on the various social media etc...

Now to wait 5 more months for the lakes to thaw and dive season to start again...
foresterab

 

[ljpm]

..... instructors need to somehow unionize and collectively demand higher pay.

I thought PADI WAS a Professional Association of diving instructors.

 

[Eric Sedletzky]

I thought PADI WAS a Professional Association of diving instructors.

I’m not sure that what it was 50-60 years ago has any resemblance to what it is now.

 

[DevonDiver]

Most instructors there are not gap year kids. And have been there a long time. Many years. Con-ed or lack of it won't get you sacked at Bans now. People can't book courses if they have already booked a ferry.

Things must have magically changed a bunch recently then...

Odd though, how Ban's wins so many trophies and plaques for their con-ed sales..

To the thais working there receive these things? As a contractor in the UK working for multnationals, I don't get any of these benefits either.

So, you're saying that it's fine a multi-billion dollar industry profits from employing people to third world standards and expectations... because that's just how it is locally?

It's fine that an industry thrives from the illegal employment of staff without work permits for off-the-books, cash-in-hand commission payments?

That PADI couldn't simply add a clause to the IRRA membership agreement stipulating that all staff/dive pros had to be legally employed by the affiliated centre, in compliance with local legislation (immigration, taxes and employment laws)?

As a contractor in the UK you earn enough to pay for these things yourself. And you pay taxes on your earnings.

I've lost count of the times I've seen a dive pro on GoFundMe, or similar public fundraising, because some illness or accident has left them impoverished and in huge debt.

I never really saw this. And it would be much more likely to get you sacked at any dive business there than lack of selling con-ed.

I won't say much about this. Drugs were seemingly endemic..especially for those earning enough to afford stuff like cocaine. Who earns enough to afford coke, you may ask... (not someone who's gonna get sacked ever, I'll answer).

I took over management of a shop there and did sack the entire instructor staff the first morning. They were all stoned at 6am before diving. The previous manager had smoked with them, before he'd run out of money, or got bored, or whatever, and left.

Are you aiming that just at Bans or the whole island?

Bans was a notable example. You could identify the groups from Ban's underwater, and not because of the logo on wetsuits..

Again diving is not a loss leader. At all.

You seem unclear of what loss leader actually is..

It's not self-defeating - as it works... if the model was flawed most of them would go bust by now.

You seem unclear as to the purpose of my article. I was addressing the "desperate dive shops".... those failing, going bust... and all the owners who're begging people to "support their local dive shop" etc etc

I'm sure all those business owners around the world would be glad to know that some gross sausage-factories in SE Asia are making a mint by de-valuing the whole scuba training industry through their greedy, exploitative practices.

And I don't agree there are massive abuses of standards. You don't need to abuse standards to teach in that way.

If you think the training outcome produced by those schools is fine, then there's not much left to say.

Yeah, yeah, yeah... it's not "breaching standards" when your student completes one mask remove in a near panic, after 10 failed attempts.... the skill can ve ticked off, right? We all KNOW how the 'standards interpretation game' works.

And I don't think any dive "pros" are being taken advantage off. Most of them earn a reasonable wage and are happy. Maybe things have changed there.

Then why aren't you working there now... living the high life in paradise?

How is the quality of the service reduced? And how does that lead to profits being increased.

Are you asking because you genuinely don't know (?!?), or because you feel an explanation would be beneficial for any non-dive pros reading the thread?

Id suggest that if someone can't work out a 5/6 day course is going to offer more training than a 3 days course then they should be ticking yes on the medical form. The reality is that customers know - they just don't care.

I'll reiterate:

With dive training, the consumer expectation on quality doesn't primarily stem from the individual dive business... it comes from the agency initials printed on the c-card they'll receive.

Same card issued...same "consistent" quality amongst all PADI members (as claimed by PADI).... ergo an expensive 5-day course is a frivolous waste of money, compared to a cheaper 2.5 day course.

It depends on perspective...

Obviously....

Big money-making agencies spend a lot if effort shaping perspectives to their financial benefit.

I'd wager that literally not one shite dive instructor is aware of their gross deficiencies...

 

[HantsDiver]

So, you're saying that it's fine a multi-billion dollar industry profits from employing people to third world standards and expectations... because that's just how it is locally?

As a contractor in the UK you earn enough to pay for these things yourself. And you pay taxes on your earnings.

I've lost count of the times I've seen a dive pro on GoFundMe, or similar public fundraising, because some illness or accident has left them impoverished and in huge debt.

I wouldn't call most people working on that island as living in third world conditions. That is grossly misleading. And it's frankly offensive to the many people on the planet who can't afford safe drinking water.

As a contractor in the UK I can afford to pay for those things. As a self-employed person, I'm not legally garanteed the national minimum wage. If I was stupid enough to work for £10 a day then no laws would be broken. However in a free market, I can make those decisions. If I then chose to rack up debts abroad I could create a gofundme... But then I'm not stupidly irresponsible so I'd never do that.

Then why aren't you working there now... living the high life in paradise?

Because I don't want to. I earn a very nice salary in the UK. I am very fortunate to have an amazing Fiance who works in the UK as well. If I were to leave my job and fancied a change I'd go back in an instant. But for now, I'm happy. In a couple of years when Brexit kicks in propper I might do a runner. I might even have a 6/12 month beach break and teach a bit of diving.

You seem unclear of what loss leader actually is..

A product or service sold at a loss. Which doesn't happen in the vast vast majority of cases.

I'm sure all those business owners around the world would be glad to know that some gross sausage-factories in SE Asia are making a mint by de-valuing the whole scuba training industry through their greedy, exploitative practices.

Total protectionist nonsense. I'm sure the guys who worked at Sheffield Steel felt the same when India and Chine produced steal more cheaply. I'm sure the same people who deride everything Chinese will agree. But they don't "de-value" anything. They provide a product at a lower price using economies of scale and good business practice. If others can't compete they should go out of business.

Are you asking because you genuinely don't know (?!?), or because you feel an explanation would be beneficial for any non-dive pros reading the thread?

I'm asking because I think that the idea that unless you pay x amount for something it's not going to be good is wrong.

I'm not saying that a highly skilled person shouldn't be able to receive a decent salary. I think they should. But a free market dictates what you earn. I grew up on a farm and got a class 1 HGV licence to help out. I wouldn't be able to live in the lifestyle I chose if I pursued that line of work. So I don't do it. It's the same for diving. If people really think they are grossly underpaid and deserve more they should retrain into something which is more financially rewarding.

On a side note - as you seem to hate PADI so much why do you chose to teach for them?

 

[DevonDiver]

.. He knows that the vast majority of courses are sold for a profit. As it right and propper. He's managed a shop so knows the costs.

His argument goes that courses are sold as a loss (false) meaning that shops have to sell equipment to stay afloat (also false). He then says the solution to this none problem is to pay more for courses.

You seem confused on loss leader and volume-sales (yes, they're different, but often used in conjunction).

In "home" locations, smaller shops use loss leader on courses to promote equipment sales.

As mentioned in my article, this is untenable in the internet retail age.

Loss leader doesn't necessarily mean a "loss" has to be made on a given product. It's the general concept of significantly discounting one income stream to promote greater profit in another income stream/s.

The goal, obviously, is that the business profits overall. Too frequently, that isn't the case nowadays.

That's exactly why PADI were founded. By a dive equipment salesman who saw a way to promote more equipment sales.

Nowadays PADI don't really give a crap about equipment sales... but they do profit from volume sales of manuals. The same model happens to accomplish their modern goal. They just have to keep "educating" their members to believe in this fiction of equipment sales...

In "vacation" areas, loss leader on courses is used to promote income from accommodation, food and beverages sales.

Break-even, or a minor profit, in the dive training income stream is tolerable because the resort fills its rooms with students. Those students then spend money in the restaurant and bar.

You don't see stand-alone dive centres in places like Thailand. All are dive resorts.

Over the years I've been consulted by many hotels and resorts about setting up a dive business on their location.

The goal is always to increase guest numbers. It's never because they expect a profitable income stream from diving business.

This model only works for such time as there is plentiful tourism. It is very prone to economic and political instability.

When tourism declines, diving focused businesses can fail.

The model... because of cheap prices and a reliance on volume turnover.. has incredibly weak foundations.

 

[HantsDiver]

You don't see stand-alone dive centres in places like Thailand. All are dive resorts.

"We don’t have our own resort, but we work with those around us. We have selected the best value in each price range and can book these directly for you; hostels, budget fan accommodation, aircon rooms, mid-range resorts, and also luxury villas and resorts for those who would like a little more luxury."

Accommodation on Koh Tao, Thailand | Scuba Diving and PADI courses in Koh Tao Thailand

They also don't own a bar. Although they have a nice coffee shop which is totally separate from the diving business.

Loss leader doesn't necessarily mean a "loss" has to be made on a given product. It's the general concept of significantly discounting one income stream to promote greater profit in another income stream/s.

I'd suggest it does. The name "loss leader" implies a "loss". If there is no loss why would you call it that?

A dictionary defines it as: "A loss leader is an item that is sold at such a low price that it makes a loss in the hope that customers will be attracted by it and buy other goods at the same shop." COBUILD Advanced English Dictionary.

 

[DevonDiver]

I wouldn't call most people working on that island as living in third world conditions. That is grossly misleading. And it's frankly offensive to the many people on the planet who can't afford safe drinking water.

I think you're being facetious, or just trolling.

Read what I actually wrote and come back with a sensible reply, if any.

If I was stupid enough to work for £10 a day then no laws would be broken.

So you're saying that the dive pros on KT are stupid to accept such salaries?

Most instructors on KT work freelance.. and get paid tiny commission per pax.

Many work for free... having been sold a lie about having a "career"... paid $$$$ for an IDC... only to be told they "obviously" dont have experience and aren't competitive.

A few... with multiple languages, a great sales patter or a particularly attractive 'demeanour' might become 'regular' instructors at one dive center. They're still oaid ****** commissions though.. the only difference is that they're in a queue for courses (providing they're willing to sit... unpaid... at the dive center until 10pm every night to do sales).

My comment on legality was clearly in respect to work permits and compliance with local employment regulations.

But then I'm not stupidly irresponsible so I'd never do that.

You seem to champion how things work on Koh Tao, but that's the second time you've called dive pros "stupid" for tolerating the employment and pay conditions there... LOL

I earn a very nice salary in the UK.

But you're saying you would earn a nice salary on Koh Tao...?

A product or service sold at a loss. Which doesn't happen in the vast vast majority of cases.

See my last post, or spend a few minutes on Google.

Total protectionist nonsense... they don't "de-value" anything. They provide a product at a lower price using economies of scale and good business practice. If others can't compete they should go out of business.

I kinda mentioned in my article that it's insane how people can't break away from any agency promoted view of how the industry should function.

I expect that there's people in some agencies, probably the business planning and finance departments, that share exactly your sentiments...

Basically you've said "if you won't compete by price cutting/matching, then you deserve to go bust".

Nothing could have illustrated my article better... thank you.

I'm asking because I think that the idea that...

What you "think" is irrelevant, because it's not what I said.

You either don't understand what a price-quality dynamic is... or you just don't understand what quality diving is.

You do champion Koh Tao... which gives a clue which though... but most likely, it's both.

as you seem to hate PADI so much why do you chose to teach for them?

It's a contemporary trend nowadays to dismiss facts or alternative opinions as "hate speak".

I've always viewed that recourse as a type of intellectual surrender.

I've taught for 5 different agencies. It's allowed me a certain intellectual freedom to examine issues on their merits, without any of the emotional bias (aka butthurt) and ego-posturing that "loyal" single-agency indoctrinated pros tend to succumb to.

Do you disagree with my primary tenet that 'big agencies' profit primarily from manual/certification sales; and thus have a deep and vested financial interest in shaping the industry to promote higher volume sales of those specific products?

Do you also disagree that more people learn to dive, and buy more manuals/certifications, when the price is cheaper, the courses are quicker and the training demands less effort or commitment?