Cert1967
Contributor
Colorado scuba market as a microcosm of the industry - its not always a race to the lowest price.
IMO boulderjohn has accurately summarized the Colorado dive market - but I believe the left several important factors. The travel market and the high end dive consumer.
Our warm water reservoirs attract few local divers - they are terrible - and their limited visibility makes training divers difficult. A few divers may venture to our high mountain lakes, but I suspect you would look long and hard to find one. An 8 hour plus drive from the central mountains - the home of BeaverDivers - will land you at the Blue Hole of Santa Rosa, NM. The town offers little in the way of accommodations or restaurants. It's 500 miles from Vail and 400 miles from Denver. The site is best dove in a dry suit, although a full 7mm head-to-toe will do for some.
Or 6 hours from Vail and 8 hours from Denver you can dive the Homestead Crater. Add on extra time in the winter for ski traffic and snow and it could be well an overnight trip. Its a favorite destination for final open water cert dives for our lds. Just how "open" it is is debatable, but you can certainly leave the exposure protection at home as it is almost hot tub like - 95-100F. As a stand alone dive destination I doubt it does little non-training business with Colorado divers.
Ever hear of someone coming from Puget Sound or Key Largo to dive these sites?
Does this sound like much fun when you can fly non-stop from DEN-CZM in about three and a half hours?
The successful local dive shops do several things well in Colorado. First they train divers and second they sell them a high end equipment. Third is TRAVEL.
I suspect that travel related commissions and "free" spots for shop's staff provide both a significant revenue stream and a strong incentive for their employees. How high can the net commission go? Perhaps ~30%. Its relatively easy to buy equipment on the web - DRIS, LP, ST and the EdgeHog sellers are great examples - but not as easy to be assured that a 15k+ trip for two on the internet is right for you when you are new to the sport and haven't traveled to dive centric destinations. The greater the distance from home and the higher the cost the more significant this becomes. Selling services requires no inventory, little space, some knowledge and returns good commissions against minimal cost exposure - to say nothing of the opportunity to sell equipment/service to the traveling diver.
Add in the reluctance of live aboards and dive resorts to pass along discounts to direct book divers that they give to aggregators/agents and its very good business for our lds. On a first time trip to Indonesia are you comfortable dropping a sizable amount of money booking directly or would you choose to book via the shop owned by a native-born-raised Indonesian? And most high end shops in CO have done many trips to the best destinations around the world.
When will web price competition begin to significantly dent this market and commission model?
Local lore has it that Colorado has the highest per-capita number of divers in the US. Its possible - we are a young active state with a booming ski industry and high incomes - this would seem an ideal market for new/current/returning divers. However, it's a little hard to believe this claim in a state where its difficult to get a nitrox fill, compressors run mostly to fill tanks for the pool/training and almost no one owns a tank.
Against this backdrop it seems that the most successful shops are not the low price setters in the marketplace. Its more the opposite - new divers seem willing to may a little more for the shop with an on-site training pool, fully stocked showroom and schedules that meet theirs. The most successful shops rent gear for trips, which is an entre to gear sales or return rentals. And just like ski rentals - high end skis rent for $70-90/day in Vail - the demand is for pricey rental gear.
At the start of the www boom a shop in Greenwood Village, CO - Underwater Phantaseas - opened in an upper end strip mall. The location was smack dab in the middle of the Denver Tech Center and the metrics of the local trading area have some of the highest incomes in Colorado. They prospered - moving to their own building complete with pool, showroom, service area and good locker-room facilities. They added swim classes and an active b-day party + scuba party for kids. Their internet presence is minimal - you can look but not buy on-line. They seem to do a big travel business, both group and individual. While they have some good instructors/dms, they have trained many dms and instructors that have the card, but limited experience - perhaps for the revenue stream? UP is right on suggested retail, prices their training at the upper end of the market and seems to prosper.
Many posts in this thread have suggested that the economics of the scuba market push prices/business to the low cost providore. This simply isn't true in Colorado. boulderjohn works at/for a high end shop that has a booming travel business - in fact it hosts an annual travel exposition with a number of high end ops attending. I stopped by a few months ago and asked for at least a close price match of LP's price and they demurred. The gears are at the high end of the market.
A1 Scuba is an old dive shop turned new, with on-site pool/training and a large travel department. They have a unique tie-in with the Denver Aquarium. No where else can you scuba/train with sharks in an ocean setting in our state and at a mile above sea level to boot. And they are not cheap, MSRP driven and reluctant to cut prices.
Just as there is a market for high end first/biz-air/hotel/auto/home/clothing - there is also a market for full cost / full service scuba shops. As an example, Aldora's prices are not dragged down by the low cost CZM ops, many divers like CZM's higher end lodging and BxTS/LU seem to be doing just fine in spite of low end ops that offer a double-dip for much less. The Arenui is booked way out at top dollar and its expensive to get to and from, both in dollars and time.
There will always be fierce competition for shops that compete on price. Not everyone - be they an entry or experienced diver is interested in a remote mail order / web purchase, even at a better price than the lds. Another model is to provide high value and superior service, while maximizing ancillary travel/swim/party biz. You might even be able to earn a good living, as it seems the best high end shops in Colorado do. Perhaps even start with a million and end up with two.
***********************************************
From the Homestead Crater Website - does the 35 mins at 35 ft sound exciting?
Scuba Experience
A one-hour scuba diving introduction with equipment included.
Any day of the week: $100
Scuba Dive
Certified divers can explore the warm waters of The Crater for a maximum of 35-minutes and a depth of 35-feet.
Weekdays (Monday - Thursday): $22
Weekends (Friday - Sunday): $27
Rental equipment: $25
Tank only: $7.50
Scuba Tune-Up
Includes academic and in-water review to bring your diving skills up to date.
Any day of the week: $100 per person
Equipment not included.
Scuba Certification
Public certification classes are also offered at The Crater. Classroom study, homework, and in-water pool instruction are included. After passing the certification test, students will receive four crater dives over a two-day period. Starting at $395 per person.
IMO boulderjohn has accurately summarized the Colorado dive market - but I believe the left several important factors. The travel market and the high end dive consumer.
Our warm water reservoirs attract few local divers - they are terrible - and their limited visibility makes training divers difficult. A few divers may venture to our high mountain lakes, but I suspect you would look long and hard to find one. An 8 hour plus drive from the central mountains - the home of BeaverDivers - will land you at the Blue Hole of Santa Rosa, NM. The town offers little in the way of accommodations or restaurants. It's 500 miles from Vail and 400 miles from Denver. The site is best dove in a dry suit, although a full 7mm head-to-toe will do for some.
Or 6 hours from Vail and 8 hours from Denver you can dive the Homestead Crater. Add on extra time in the winter for ski traffic and snow and it could be well an overnight trip. Its a favorite destination for final open water cert dives for our lds. Just how "open" it is is debatable, but you can certainly leave the exposure protection at home as it is almost hot tub like - 95-100F. As a stand alone dive destination I doubt it does little non-training business with Colorado divers.
Ever hear of someone coming from Puget Sound or Key Largo to dive these sites?
Does this sound like much fun when you can fly non-stop from DEN-CZM in about three and a half hours?
The successful local dive shops do several things well in Colorado. First they train divers and second they sell them a high end equipment. Third is TRAVEL.
I suspect that travel related commissions and "free" spots for shop's staff provide both a significant revenue stream and a strong incentive for their employees. How high can the net commission go? Perhaps ~30%. Its relatively easy to buy equipment on the web - DRIS, LP, ST and the EdgeHog sellers are great examples - but not as easy to be assured that a 15k+ trip for two on the internet is right for you when you are new to the sport and haven't traveled to dive centric destinations. The greater the distance from home and the higher the cost the more significant this becomes. Selling services requires no inventory, little space, some knowledge and returns good commissions against minimal cost exposure - to say nothing of the opportunity to sell equipment/service to the traveling diver.
Add in the reluctance of live aboards and dive resorts to pass along discounts to direct book divers that they give to aggregators/agents and its very good business for our lds. On a first time trip to Indonesia are you comfortable dropping a sizable amount of money booking directly or would you choose to book via the shop owned by a native-born-raised Indonesian? And most high end shops in CO have done many trips to the best destinations around the world.
When will web price competition begin to significantly dent this market and commission model?
Local lore has it that Colorado has the highest per-capita number of divers in the US. Its possible - we are a young active state with a booming ski industry and high incomes - this would seem an ideal market for new/current/returning divers. However, it's a little hard to believe this claim in a state where its difficult to get a nitrox fill, compressors run mostly to fill tanks for the pool/training and almost no one owns a tank.
Against this backdrop it seems that the most successful shops are not the low price setters in the marketplace. Its more the opposite - new divers seem willing to may a little more for the shop with an on-site training pool, fully stocked showroom and schedules that meet theirs. The most successful shops rent gear for trips, which is an entre to gear sales or return rentals. And just like ski rentals - high end skis rent for $70-90/day in Vail - the demand is for pricey rental gear.
At the start of the www boom a shop in Greenwood Village, CO - Underwater Phantaseas - opened in an upper end strip mall. The location was smack dab in the middle of the Denver Tech Center and the metrics of the local trading area have some of the highest incomes in Colorado. They prospered - moving to their own building complete with pool, showroom, service area and good locker-room facilities. They added swim classes and an active b-day party + scuba party for kids. Their internet presence is minimal - you can look but not buy on-line. They seem to do a big travel business, both group and individual. While they have some good instructors/dms, they have trained many dms and instructors that have the card, but limited experience - perhaps for the revenue stream? UP is right on suggested retail, prices their training at the upper end of the market and seems to prosper.
Many posts in this thread have suggested that the economics of the scuba market push prices/business to the low cost providore. This simply isn't true in Colorado. boulderjohn works at/for a high end shop that has a booming travel business - in fact it hosts an annual travel exposition with a number of high end ops attending. I stopped by a few months ago and asked for at least a close price match of LP's price and they demurred. The gears are at the high end of the market.
A1 Scuba is an old dive shop turned new, with on-site pool/training and a large travel department. They have a unique tie-in with the Denver Aquarium. No where else can you scuba/train with sharks in an ocean setting in our state and at a mile above sea level to boot. And they are not cheap, MSRP driven and reluctant to cut prices.
Just as there is a market for high end first/biz-air/hotel/auto/home/clothing - there is also a market for full cost / full service scuba shops. As an example, Aldora's prices are not dragged down by the low cost CZM ops, many divers like CZM's higher end lodging and BxTS/LU seem to be doing just fine in spite of low end ops that offer a double-dip for much less. The Arenui is booked way out at top dollar and its expensive to get to and from, both in dollars and time.
There will always be fierce competition for shops that compete on price. Not everyone - be they an entry or experienced diver is interested in a remote mail order / web purchase, even at a better price than the lds. Another model is to provide high value and superior service, while maximizing ancillary travel/swim/party biz. You might even be able to earn a good living, as it seems the best high end shops in Colorado do. Perhaps even start with a million and end up with two.
***********************************************
From the Homestead Crater Website - does the 35 mins at 35 ft sound exciting?
Scuba Experience
A one-hour scuba diving introduction with equipment included.
Any day of the week: $100
Scuba Dive
Certified divers can explore the warm waters of The Crater for a maximum of 35-minutes and a depth of 35-feet.
Weekdays (Monday - Thursday): $22
Weekends (Friday - Sunday): $27
Rental equipment: $25
Tank only: $7.50
Scuba Tune-Up
Includes academic and in-water review to bring your diving skills up to date.
Any day of the week: $100 per person
Equipment not included.
Scuba Certification
Public certification classes are also offered at The Crater. Classroom study, homework, and in-water pool instruction are included. After passing the certification test, students will receive four crater dives over a two-day period. Starting at $395 per person.