Updated on April 12, 2021.
“The pandemic led to an unprecedented consumption shock across countries that upended long-standing consumer habits. But what happens once the pandemic is over?” McKinsey & Company
While we still face COVID-19 surges across the globe with some countries re-imposing lockdowns, vaccines are rolling out, and we perceive signs of the economy trying to get back on track. Eventually, we will be out of this ordeal. Then what?
What is in store for the scuba diving industry after COVID-19?
We’ve already estimated that about 20% of North American local dive shops will have closed their doors by the end of the pandemic. We believe that travel will grow in 2021 (over 2020) but only reach its pre-pandemic level in 2024. The global economy is projected to grow at 5.5% in 2021 and 4.2% in 2022.
This is all interesting. Good stuff to know! But an overall picture of the economy may not be relevant to the dive industry.
We believe the scuba diving industry should outperform the economy if we play our cards right.
To understand why that is, let’s have a look at what happened during the pandemic.
Who suffered the most during the pandemic?
Employees in jobs that could be done from home simply had to cut their daily commute. They didn’t experience a decline in income. At the same time, their expenses were reduced — mainly in travel, entertainment, and dining. They stayed at home. They didn’t take their annual vacation in Fiji. That category of consumers piled up cash reserves during the pandemic and will be ready to spend once the gates open.
There’s another category of people for which the pandemic was disastrous. They lost their job, to start with. They used their savings to stay afloat, and they will come out of the pandemic on the verge of bankruptcy — or worse.
In other words, income inequalities have increased during the COVID-19 pandemic. “Higher-paid workers are working from home while lower-paid blue-collar workers typically do not have this option.” ~World Economic Forum. It’s a serious social (and moral) issue, but it’s actually good news for the dive industry.
What happened to scuba divers during the COVID-19 pandemic?
Once lockdowns have been lifted, vaccines have been widely administered, and travel is on a growing track, scuba divers should be among the crowd ready to spend because, to this day, the dive industry primarily serves an aging baby boomer population with deep pockets.
The current socio-demographic profile of a dive industry client is an aging male consumer with above-average income — precisely the kind of consumers that got hit the least during the pandemic. In fact, many of these consumers have accumulated more savings during the pandemic than they normally do.
“We expect spending by mid- and high-income cohorts to bounce back to pre-COVID-19 levels between 2021 and 2022, while spending by low-income cohorts could drop below pre-COVID levels once stimulus measures expire.” ~McKinsey & Company.
We’ve known all along that “the poor stay poor, the rich get rich” (Leonard Cohen). Big surprise! But this split also applies to age groups.
“Consumption is expected to shift toward older and richer segments, because of both a growing share of the population over 65 and a slower post-pandemic recovery for low-income cohorts.” ~McKinsey & Company.
What happened to dive industry staff during the pandemic?
Unfortunately, employees working in dive resorts and local dive shops are part of the crowd of badly hit people: a younger demographic operating in a field of work that couldn’t be done remotely from home.
The dive industry was already notorious for cheap labor bordering slavery using schemes like “I’ll give you a $1,500 free instructor course if you do $10,000 of work for me for free”. The COVID-19 pandemic didn’t help.
We do not have survey data on what happened to these people while resorts and dive shops were closed. However, we have indications that many of them went back home to weather the storm and try to find a real job.
As a result, while we slowly get out of the pandemic economic crisis, we may be faced with a labor shortage.
Postponing Our Hope for a Change in Target Market
The dive industry is currently too dependent on aging male baby boomers. This target market will not be around forever!
We need to redesign our dive industry business processes and marketing strategies to serve younger generations with aspirations and expectations significantly different from our current clients. But this can wait! Because in 2021 and 2022, the aging male baby boomer crowd is the one that will keep us afloat!
Just keep an eye out for underwater heart failures and start planning to pay your staff more decent wages.
You may be interested in more scuba diving industry news & editorials.