The lack of reliable statistics in the dive industry makes it difficult to determine, precisely, the size of the scuba diving industry. We can estimate a few things, though.
We will focus on USA data to determine retail sales in local dive stores and wholesale revenues to dive manufacturers. And we will use the number of annual certifications in the USA and our estimate of revenues per new diver, to determine how much the local dive shop is dependent on training new divers.
We will then estimate some worldwide numbers by extrapolating, from the ratio of active American divers (a reasonably accurate number) vs. the estimated number of active divers worldwide. And we’ll have a quick look at the limited information we have on China, one of the rare steadily growing markets in the dive industry.
Finally, we’ll discuss whether these numbers are likely to be overestimated or underestimated.
But first, let’s discuss the place of dive travel sales in our analysis.
1. Should We include DIVe TRAVEL in calculating the size of the Scuba Diving industry?
Some local dive shops sell dive trips while others do not. If we include dive travel in the local dive shop revenues, it can significantly skew the estimated size of the scuba diving industry. For instance, a $10K dive trip to the Galapagos sold to 30 divers, would boost your sales by $300K that month. It’s a significant figure since we estimate that local dive shops in the USA have annual revenues of about $500K!
However, if we look at a charter boat operator in Key Largo with six dive boats, its revenues will be mainly for “trips” although it will be under the form of “day trip” fees.
Therefore, we should include in dive store revenues the fees collected for local scuba diving activities & day trips, but not include the receipts of fly-away dive travel. A big part of the cost of fly-away dive travel is airfare and lodging. These fly-away travel numbers are useful for evaluating the economic impact of dive operations in a particular geographic region but do little in helping us understand the size of the dive industry for businesses we actually manage. We don’t manage airlines nor local Hilton hotels.
2. Ratio USA vs. The World
To be able to estimate the size of the scuba diving industry in the USA and worldwide, let’s first determine a ratio between the size of the dive industry in the USA vs. Worldwide.
The Participation Rate Angle
From the 2019 SFIA Topline report, we can work with an estimated 2.8M active divers in the USA.
From a 2017 DEMA document titled “Fast Facts: Recreational Scuba Diving and Snorkeling,” we see an estimated 6M active divers worldwide, although we don’t know the source of this estimate. DEMA lists SFIA as the source. However, from what we know, the relevant SFIA reports only cover the US market.
Either way, assuming we trust these SFIA and DEMA numbers, and that we can use them to estimate the size of the dive industry, it means that the American dive market is close to 50% of the worldwide market.
The Estimates in The PADI Business of Diving Book
In a book published in 1995, The Business of Diving, PADI quotes a 1994 DEMA estimate of worldwide dive sales at $3.5B compared to $1B, in the USA. Based on this ratio, American sales would be a bit less than one-third of worldwide sales.
In the same book, PADI estimates there are about 2000 dive centers in the USA and about 4000, worldwide. So… We are back to the US market being about half of the worldwide dive industry.
PADI goes on to states that about 1M new divers are certified annually, of which nearly half are in the USA.
The disproportionally high level of sales worldwide vs. the US is probably related to the fact that scuba divers in places like the USA and Japan travel and spend a fair amount of their dollars in travel costs outside the USA and Japan.
In the same section discussing the size of the dive industry in the book The Business of Diving, PADI estimates the number of snorkelers worldwide between 6 to 7M compared to 3 to 3.5M in the USA. Based on this estimate, the American market is also about 50% of the worldwide market.
These numbers, like most numbers in this fairly old PADI book, are no longer accurate. For instance, SFIA estimated the number of active snorkelers in the USA at 7.8M in 2018. But we’re only using these old PADI numbers to calculate a ratio of sales between the USA and the rest of the world.
Otherwise, PADI now states there are about 6K dive centers around the world affiliated to PADI. But we don’t know how many are in the USA. We also do not know how many of them carry more than one dive training agency logo.
I’ve also heard this 50% rule of thumb from international dive manufacturers, selling around the world. For now, let’s use it.
3. Size of the Scuba Diving Industry At Retail Sales
In The Business of Diving book, PADI estimates that average retail sales by dive centers are between $320K and $460K in 1992-1993. Meanwhile, William Cline, in his 2011 Dive Retailer Financial Study, estimates average retail sales per dive center at approximatively $500K.
A recent estimate of dive centers in the USA by a dive magazine pegs the number of dive centers in the USA at 1500. If we use an average of $500K in retail sales, we get an overall market of $750M. It would mean about $1.5B in sales, worldwide.
An executive at a dive gear manufacturer told me they validated the number of dive centers in the USA by working with their sales representatives. They had each one of their reps counting all dive centers listed on the various certification agencies. Then, they removed all the dive centers that were questionable (e.g., operating out of a garage at home) and all duplicates. They ended up with approximately 950 local dive shops in the USA. For our exercise, here, we’ll continue with the 1500 numbers. Even “semi-dive centers” operating out of questionable locations sell dive training and dive gear. And they are most likely included in the William Cline and PADI studies.
The split in dive center revenues
From the two documents above (from PADI and William Cline), we get the estimated following split in revenues – we mixed both and rounded the numbers:
- Equipment Sales: 55%
- Training: 25%
- Other: 20%
4. What is the size of the scuba diving gear market?
If equipment sales represent about 55% of the $500K in revenues collected by dive centers on average, with 1500 dive centers, we get gear sales of about $275K per dive center and $412M overall in the USA – that’s at retail price.
It means that dive gear manufacturer sales, at wholesale, are approximately $206M annually in the USA.
With the USA representing about 50% of the dive gear sales market, we have scuba diving equipment sales, worldwide, at wholesale, of approximatively $412M, annually.
We believe this is a little bit on the low side. The number often mentioned by dive manufacturers is $500M in sales, wholesale, worldwide – with half of it being in the USA.
The exact number is hard to pinpoint. For instance, sales of inexpensive snorkeling kits at mass retailers like Costco are superior to the sales of scuba diving gear per se. Yet, dive gear manufacturers sell both.
We could also try to estimate this number by looking at public records for these companies. But many of them are private. In fact, Scubapro and Beuchat are the only dive gear manufacturer for which it’s easy to get annual revenues. The following numbers represent worldwide figures, at wholesale.
- The diving division of Johnson Outdoors, Scubapro, reported sales of $76.7M for the year 2017.
- Mares’ numbers are no longer public, but last we checked, their annual revenues were also around $70M although that figure included the SSI certifying agency revenues.
- Aqua Lung’s numbers have always been hard to get as they were hidden inside the vast revenues of the parent’s company, Air Liquide. And now, Aqua Lung is owned by a private equity fund. However, the generally quoted figure is around $100M.
- Beuchat’s sales are publicly available in France. For 2018, Beuchat’s revenues were at 16.7M Euros (approx. $18.8M).
These four companies add up to about $250M in wholesale revenues annually. It makes sense to estimate that all other and smaller gear brands, together, could represent another $250M, for a total of $ 500M.
5. Determining The Size of the Dive Industry From The DEMA Certification Census
In DEMA‘s US Certification Census, we see 152K open water diver certifications, annually, in the USA. You must be a DEMA Member to gain access to these quarterly reports.
If we estimate that a new diver spends around $1500, we get retail sales of about $228M for these new divers.
However, it is not the actual number of new diver certifications in the USA. The DEMA certification census gives us an idea of trends. But we cannot take the raw number of new diver certifications as is, because only three certifying agency reports their numbers: PADI, SDI, and NAUI. A big one that is missing is SSI, as we discussed in The Lack of Data in the Dive Industry.
But let’s keep on estimating. Let’s assume that with SSI and the missing small training agencies, we would get approximately 200K new diver certifications per year. It would represent about $300M in retail sales at the dive center level. With overall dive retail sales estimated at $750M annually in the USA, it means that new divers are crucial to the current dive industry business model.
With these sales numbers, new divers generate 40% to 50% of a local dive shop retail sales. We can see why the steady decline in new diver certifications over the last few years is a severe threat to the origin dive center and, by extension, to dive gear manufacturers.
Our financial dependance on new diver certifications is problematic. We need a new scuba diving industry business model based on diving, not on training.
Decline in New Diver Certifications in 2018
In the 2018 DEMA certification census, we continue to see a significant decline in the number of entry-level certifications in the USA. Between 2017 and 2018:
- Jan-Mar: -12.1%
- Apr-June: -12.1%
- July-Sept: -2.8%
- Oct-Dec: -7.5%
- Annual: -8.2%
These are dramatic numbers! Sorry to say so. You can see the same trend in the DEMA certification census over the last few years. Whatever the size of the scuba diving industry, we are steadily going down.
Word of caution: Question every number presented to you. For instance, when you hear PADI saying they are issuing close to 1M certifications per year, it includes all levels of certification. A diver doing Open Water, Advanced Open Water, and five dive specialty courses is counted seven times. He is unlikely to buy seven regulators!
6. What about the Size of the Dive Industry In China?
You probably keep on hearing certifying agencies saying that their business is growing because scuba diving in China is booming with the growth of the Chinese middle-class. It makes sense. However, we must be careful when believing these statements.
For instance, in “The Startup Business Plan for LeQian,” a university researcher states that from 2009 to 2013, the Chinese certification market grew by 457% for PADI, for an average annual growth rate of 55%. Impressive numbers! But it merely means that the number of entry-level scuba diving certifications increased from 3150 to 18225, as you can see below.
Source: The Startup Business Plan for LeQian.
China is a different beast. For instance, it’s unlikely that American and European dive gear brands sell a lot of basic scuba and snorkeling gear in China. These dive manufacturers purchase their inexpensive equipment in China, like fins, masks, and snorkels. China doesn’t need international brands to sell them back these products! And we’ve heard China is the king of counterfeits, to start with.
Eventually, we can also expect China to produce regulators and BCDs. They already do, although the quality is questionable. It’s all inexpensive gear. For now, what we hear from dive gear manufacturers and wholesalers is that they only sell their high-end equipment to China. It makes sense. China already produces most of the low-end dive and snorkeling gear. And inside China, the middle-class is interested in high-end (prestigious) brands.
Therefore, the growth in new diver certifications in China will undoubtedly have a relatively small impact on revenues for the Aqua Lung, Mares, Beuchat and Scubapro of this world – and it will be even harder to get sales data.
Case in point: In a study of the Chinese market a few years back, William Cline provided the following observations:
- The largest dive resort in the world is in Hainan Island, China. They conduct about 1M scuba tryouts annually, on their own.
- Under all accounts, the market is booming. Yet, the size of the Chinese scuba diving market was estimated at only $12.5M.
There are two things happening behind the scene to produce these numbers, as we’ve stated above:
- Getting accurate market data from China is extremely difficult and, therefore, we don’t know if that $12.5M is even close to being correct.
- Sales of dive gear by Chinese suppliers within China are unlikely to be included in this figure.
The growth and size of the scuba diving industry in China definitively warrant to be monitored closely and it may provide good opportunities for certifying agencies, but it’s unlikely to be a great opportunity for American and European scuba diving gear manufacturers.
7. Are These Estimates Overstated or Understated?
Let’s forget China for now and get back to our American and Worldwide figures. Are they overstated? Or understated? Let’s think about it.
Surveys are generally targeted at standard ‘dive shops’. Therefore, it may not correctly include large sales of gear by unique retailers like Leisure Pro, Divers Direct, Scuba.com and, up to recently, Sports Chalet. If this is true, the total size of the dive industry would be understated.
Yet, surveys may be primarily answered by larger dive shops as they are more business-minded. This would skew the figures for average sales per dive center. If this is true, the average revenues per dive store would be overstated.
When we evaluate sales in the dive industry based on dive shop retail sales, we are missing the independent instructors’ revenues. Their gear sales may be marginal, but they sell scuba diving courses. Therefore, training sales may be understated.
And we could go on like this for a long time. There are many reasons why the figures above may be overstated and as many reasons why they may be understated. Therefore, we must take all of these estimates for what they are: Estimates. Proceed with caution.
8. The Size of the Scuba Diving Industry – Summary
Here’s a quick summary of the estimates discussed above:
- Average annual revenues per dive shop in the USA: $500K.
- Active divers: 2.8M in the USA; 6M worldwide.
- Number of dive centers: Between 950 and 1500 in the USA; unknown, worldwide.
- Total dive revenues at the retail level (all categories, excluding fly-away travel): $750M in the USA.
- Dive gear sales at wholesale: $250M in the USA; $500M worldwide.
- New diver certifications annually: 200K in the USA.
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