Dive Industry Analysis
PESTLE Analysis of The Scuba Diving Industry
Political, Economic, Social/Socio-Demographic, Technological, Legal, Environmental Analysis of The Dive Industry
Darcy Kieran is the author of the handbook “Your Career and/or Life as a Scuba Diving Instructor: How to Make a Good Living Out of Your Passion for Scuba Diving” and a unique advanced logbook & checklists for scuba divers, divemasters & instructors.
A Dive Industry PESTLE Analysis is a framework to study external macro-environmental factors impacting our industry.
PESTLE is an acronym that stands for:
- Political
- Economic
- Social / Socio-Demographic
- Technological
- Legal
- Environmental
All six areas of analysis feed the Dive Industry PESTLE Analysis.
Otherwise, since a PESTLE analysis of the dive industry helps us identify external factors impacting our industry, this tool ends up providing us with threats and opportunities for the SWOT analysis.
AN ANALYST’S WORK IS NEVER DONE: Internal and external factors impacting our business frequently change, and we need to update our analysis. Since dive industry analyses lead to scuba diving industry strategies, we also need to regularly review our strategies to see if they remain valid.
1. Political
Political factors that impact the dive industry include several elements. Some factors apply to all businesses in a jurisdiction, like corporate income taxes. Other factors have a unique impact on the dive industry, like implementing laws governing how scuba diving can be taught in a state or country.
This analysis is better done country by country — but let’s still discuss some overall political trending factors we should include in the PESTLE analysis of the dive industry.
Government Intervention
In Quebec, Canada, the government established, a few years back, regulations on scuba diving. It imposes standards for teaching scuba diving and for participating in the activity of scuba diving. All dive instructors must be registered with the FQAS (Quebec Underwater Federation) to be allowed to teach in Quebec. What is the impact of such regulations? It adds paperwork!
And if you do not comply, you could face legal problems, especially in the case of an incident with a student-diver.
You could also have issues with your training agencies. Check your teaching standards. There is probably a clause stating that you must respect all local laws and regulations. Training agencies always write their training standards in a way that they are protected!
Florida and Texas have some regulations as well. Australia, also. And the list goes on.
This trend seems to be ongoing. It is usually the result of what legislators perceive as too many scuba diving accidents. That was the reason in Quebec. Quite frankly, the dive industry called it upon itself. There were numerous dive instructors following no known industry standards for teaching — including an instructor letting a divemaster perform the certification dives, alone, in challenging conditions (very cold water with current) while skipping a bunch of skills to get out of the cold water as fast as possible. This brings us back to our discussion on the lack of quality assurance in the dive industry.
I remember a few years back, the Department of Tourism of the Cayman Islands was looking into scuba diving. They felt the numerous diving deaths were hurting the image of the Cayman Islands. From what I remember, in most cases, these deaths were due to heart attacks — but they are still portrayed in the media as a Cayman Islands diving accident. We see this problem in other places with the aging baby boomers remaining a significant part of the active diving population — and they are not getting any younger!
The dive industry claims to be self-regulated — but we are not sure it is. We believe there’s a severe lack of quality assurance. And until we take this issue seriously, we can expect more government interventions.
Government Support
On the other side of the swing, governments could be helpful.
Why haven’t we asked for regulations and laws that would help the dive industry? An example would be laws limiting liability lawsuits against instructors and dive operators. Do you think it’s not possible? Strangely enough, other outdoor activities did it.
For instance, in Colorado, there’s a ski law helping the ski industry. Here are a few quotes: “Limitations are imposed on damages collectible against ski area operators for downhill skiing accidents.” And “volunteer ski patrol members are granted civil immunity for acts or omissions in the provision of emergency services or assistance, so long as members act in good faith.”
Why don’t we have government support like that in the dive industry — especially in areas where scuba diving contributes a fair amount of value to the economy, like in Florida? If DEMA is too small to pursue projects like that, perhaps it’s time we become part of the Outdoor Industry Association (OIA) to get bigger guns aligned with us.
Government Stability
Another political force at play in our dive industry PESTLE analysis is government stability. This is a factor impacting the dive resorts particularly.
For instance, a few years back, unrest in Egypt created a colossal crash in scuba diving tours to the Red Sea.
In the years to come, changes in the way consumers purchase scuba diving training and dive gear will play in favor of dive resorts and against local dive shops. However, dive resorts are much more dependent on government stability, which can flip quite quickly with barely any advanced warnings.
Accessibility to Dive Sites
If government representatives perceive that scuba divers are endangering a dive site, they may “close” the place to scuba diving. Another reason for closing a dive site is the infrastructure used by tourists. We’ve seen the Philippines Government close one of their most visited islands, Boracay, for six months in 2018.
This is another area where dive resorts are more vulnerable to government intervention than local dive shops.
2. Economic
Economic factors tend to be the same for all businesses within a geopolitical location. But not all companies are being impacted the same way. For instance, during a recession, the dollar store performs better than the local dive shop. Scuba diving is not a necessity. It’s not like milk. Therefore, it quickly gets cut in tough economic times.
Even if your target clients still have plenty of disposable income, low consumer confidence may push them to spend less while they ‘wait & see.’
Another economic factor that can have a profound impact on your dive business is interest rates. This impacts your ability at financing your assets and inventory.
And economic factors do not all pull in the same direction. For instance, during a period of rapid economic growth, you may get more clients, but the interest rates may also be higher, as the government tries to cool down the inflation.
Most economic factors are interrelated. For instance, economic growth may also come with a low unemployment rate, which may increase your labor costs.
Since economic factors may change rapidly, you must monitor them closely to update your business situation and your cash flow forecasts regularly.
And watch the news! After 9/11, sales in my dive shop crashed to near zero, for a few weeks. Scuba diving is typically associated with traveling.
3. Social / Socio-Demographic
We’ve already discussed this factor when we were looking at the socio-demographic profile of a scuba diver. There are trends to monitor, here, too. However, they tend to change less rapidly than economic factors.
The most significant social factor currently affecting the dive industry is the shrinking of scuba diving in what remains our core market, the baby boomers. It shrinks because this crowd is getting old — or dead. Meanwhile, the wants and needs of the younger generations are different than what was satisfying the baby boomers. The dive industry was well-adapted to baby boomers in the 80s and 90s. This old dive industry business model no longer fits in 2020.
Just like political factors vary around the world, you will encounter different cultural norms in different parts of the world. For instance, there are races in which we find very few scuba divers. Meanwhile, some people are a lot more into scuba diving — like the Americans. Under certain angles, we estimate that about one-third of the market for scuba diving is in the USA.
4. Technological
There are two parts to the Dive Industry PESTLE Analysis’ technological factors:
- What new technology becomes available.
- What impact these new technologies have on your customers’ expectations and shopping attitudes.
For instance, your customers probably expect to book rental gear online, and they expect to be able to get the exact same models and sizes they used last time, with only a couple of clicks. Do you have that? Probably not.
Generally speaking, the dive industry is exceptionally behind in using technology — and even more in using it properly.
Dive Tables & Dive Computers
Are you still teaching the dive tables? If so, I bet your student-divers are yawning. Why not teach scuba diving with a dive computer? In engineering courses, they no longer teach how to use the slide ruler. We design bridges with computers.
Dive Gear Shopping
Otherwise, your clients probably expect you to sell every model of the brands you carry, in any size and any color. And they want to know precisely on which day they will get it. Does your inventory management system allow you to meet their expectations? Probably not, because it would require dive centers to know what the dive gear supplier has in stock. We are so far behind.
A giant technological leap forward is a requirement for the Octopus Strategy.
The more we drag our feet on using technology to meet today’s consumers’ expectations, the more we will remain an old industry designed by baby boomers for baby boomers — but that is a dead-end.
5. Legal
There’s a bit of overlap between the Legal and Political factors of a Dive Industry PESTLE Analysis. If it’s too confusing, you can analyze both together. Legislative issues will depend on the country you are operating in.
It includes factors such as consumer protection laws. For instance, in many countries, you have to be very careful about how you collect deposits for courses. I know of at least one jurisdiction where you are not allowed to receive any money for a class, until the first day of the course. Dive centers in this region do not respect the law — but that is not the way to operate professionally. You’ll eventually get caught, and the whole industry will get a black eye.
In many states or countries, you cannot sell trips unless you are a fully licensed travel agent, with a security deposit paid to the government. You must also keep in a separate bank account all the deposits you receive for future travel. That’s another series of legislation that dive shops often ignore. We’re playing with fire.
Health & Safety and Workers Compensation is another dangerous area if you don’t follow the rules.
Do you pay for workers' compensation? Do you follow health & safety standards in your jurisdiction? What about your volunteers? In certain jurisdictions, you are supposed to pay workers comp for them too. Imagine a top-notch lawyer making a fortune in his daytime job. He gets hurt while divemastering “for fun” during your certification dives. He gets hurt. He can’t work for a month. Are you ready to cover his loss of income?
Even regulations and standards on how to fill scuba cylinders are often ignored. I know of one large American dive shop still putting bottles in water tubs to fill them. Most jurisdictions also have regulations on the transport of compressed gases. And once again, many dive professionals operate with a disregard for these regulations.
Our general disregard of laws, regulations, and standards is a ticking bomb for the dive industry.
6. Environmental
The environmental factors should be close to our hearts. If coral reefs die, we will end up with a big chunk of clients no longer interested in scuba diving. Climate change is a factor to consider when buying or building a dive resort. For instance, the Maldives are forecasted to be underwater pretty soon.
But beyond that, we are talking, here, about environmental regulations or standards impacting the dive industry.
For instance, there are clear regulations in Florida, preventing us from feeding wildlife. So, why are we still organizing shark feeding dives? Even if you go outside the legal boundaries of Florida, you have to be ready for customers' expectations and the media to be aligned with “no feeding of wildlife.”
An even bigger looming environmental issue is the amount of single-use plastic we use in the dive industry. Look inside any dive shop. Neoprene wetsuits arrive inside plastic bags. What for? Why are we still using clunky plastic packaging for fins-mask-snorkel kits?
To start with, many products we sell are not suitable for the environment, like lead weights and neoprene wetsuits. But at least, we can jump into the fight against single-use plastic and do our share.
I expect to see no straws or single-use water bottles inside your dive center!
What’s Next?
Once we’ve completed our analysis of the scuba diving industry, we will summarize key trends and strategic analysis findings before moving on to the next section, where we’ll work on drafting strategies for the dive industry.
Meanwhile, please contribute to the development of this analysis by providing feedback. Let us know changes, additions, and retractions you deem valid and valuable. Together, we can put the dive industry back on a path to growth.
A “PESTLE Analysis” is just one of 5 methods we use for studying the dive industry.
Porter’s Five Forces provide us with a snapshot of the current competitive forces in the dive industry. It helps predict profitability. A SWOT Analysis helps us identify if any of our weaknesses should be fixed to prevent going heads up with one of the external threats and what opportunities match our strengths. The 4Ps and the 4Cs are focused on the marketing of our scuba diving products and services. And finally, the PESTLE Analysis looks into the external macro-environmental factors impacting our industry. It is a tool to identify threats and weaknesses for the SWOT analysis.
Also from Darcy Kieran:
- Handbook: Your Career and/or Life as a Scuba Diving Instructor: How to Make a Good Living Out of Your Passion for Scuba Diving.
- Logbook: Advanced Scuba Diving Logbook with Checklists for certified scuba divers, divemasters & dive instructors.
- Handbook: Advanced Guide to SPF Scuba Diving for Scuba Divers, Divemasters & Dive Instructors: Develop Better Scuba Diving Skills, Dive Safer, Save Money & Have More Fun!
- Handbook: The Ultimate Beginner’s Guide To Scuba Diving: How to Increase Safety, Save Money & Have More Fun!
- Logbook: STARTER Scuba Diving Logbook with Checklists while getting your open water diver certification!
- Reference book: Scuba Diving Industry Market Reports, Data & Statistics.
Side note: During your surface intervals, have a look at my novels with a scuba diving twist, starting with “Mystery of The Blue Dragon” and “Shadows on Ocean Drive.”
You could help the dive industry by taking part in ongoing dive industry surveys. You will also find results from our past scuba diving market studies here.
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What now? Have a look at the complete Scubanomics Table of Contents.
