DEMA 2021 Annual Report

2021 DEMA Annual Report Bringing Businesses Together to Grow the Diving Industry Worldwide

TABLE OF CONTENTS What is DEMA? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Member Engagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Go Dive Now Consumer Marketing Campaign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 COVID -19 Resources for the Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Finance Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Manufacturers’ Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Public Policy Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 DEMA Show Update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Diving Community Champions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Retailer Resource Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 DEMA Research Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 International Membership Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

WHAT IS DEMA? The Diving Equipment and Marketing Association is a non-profit trade association.

Most of all, DEMA is a community of diving professionals who share a similar goal – to come together to grow the diving industry worldwide.

DEMA provides members and the Industry with tangible benefits that are funded by earnings from the Industry’s participation in the annual DEMA Show, sponsorships, and from DEMA membership dues. Importantly, DEMA channels earnings BACK INTO the Diving Industry, creating market and industry research, guiding legislation and regulatory issues to help the Industry, developing marketing and PR programs, and producing other Industry efforts, all for the benefit of DEMA Members. DEMA doesn’t take money out of the Diving Industry.

As with any year, there are ongoing business challenges, challenges which continue to be made 4 | 2021 DEMA Annual Report

DEMA channels earnings BACK INTO the Diving Industry, creating market and industry research, guiding legislation and regulatory issues to help the Industry, developing marketing and PR programs, and producing other Industry efforts, all for the benefit of DEMA Members.

DEMA doesn’t take money out of the Diving Industry. more difficult by COVID-19. DEMA continues to seek out ways to make it possible for Industry participants to collaborate with the Association and with each other, and to be successful.

DESCRIPTION

DEMA is a worldwide trade association for the recreational diving and snorkeling industries with more than 1,300 members worldwide.

DEMA’S MISSION

Bringing businesses together to Grow the Diving Industry worldwide.

STRATEGIC GOALS

1. Build a community among DEMA Members with a culture and environment that will produce valued relationships.

2. Create worthwhile opportunities for DEMA Members to share and exchange information and knowledge.

3. Provide learning opportunities that are responsive to DEMA Member needs and relevant to the changing dynamics of the Diving Industry.

4. Be at the forefront of addressing the legislative and regulatory initiatives that affect the Recreational Diving Industry.

STRATEGIC OBJECTIVES

Engagement: To provide a community culture in the Diving Industry through personal interaction.

Industry Practices: To model and foster an inclusive culture within the Diving Industry by sharing useful and successful practices originating from DEMA Members and the Industry.

Innovation: To create and deliver new value for DEMA Members.

Education: Through a culture of engagement, provide relevant professional development along the continuum of careers and activities within the diving community.

Resources: To serve as a resource for the Diving Industry, including: • Sharing useful and successful business and management practices • Industry Research • Appropriate Standards • Creating opportunities for the DEMA community to advance personally and professionally through collaboration.

TACTICAL GOALS

1. Produce an annual trade event for the Industry which serves the needs of its stakeholders and produces a successful financial outcome for the association.

2. Engage in marketing programs that promote non-commercial diving of all kinds, create new customers of all ages, drive consumers into retail stores and resorts, and promote customer retention.

3. Dedicate resources to preventing potential legislation which could adversely affect the Industry.

4. Engage in marketing research programs which will: • Define the universe of divers.

• Determine the rate of erosion among existing divers.

• Determine the number of entry-level scuba certifications that take place in the United States and the Caribbean each year.

• Seek opportunities to obtain global data on diver certification and participation.

• Provide retail operational data.

5. Engage in activities that promote the health of aquatic resources while protecting diver access to those resources.

COMMITTEES

Committees are made up of Members and may include Board members or other volunteers from within the Diving Industry.

These committees are advisory to the Board of Directors and DEMA Staff and bring a wealth of experience to the Association. Board Committees are chaired by DEMA board members, while Program Committees can be chaired by members who are not directors.

Committees help to provide input to the DEMA Board of Directors and Staff. Having opinions and insight from the diving community is critical, and the learning curve works both ways; many volunteers learn the inner workings of a nonprofit business and trade association, including the nuances and challenges of providing the best services and promotions that meet the needs of all five stakeholder groups simultaneously.

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THE 2021 DEMA BOARD OF DIRECTORS A1-Manufacturing

A2-Diver Certification and Training Agencies

• Craig Lees, Suunto

• Tom Leaird, Scuba Educators International

• Jenna Meistrell, Body Glove

• Jeff Mondle, PADI A3-Dive Consulting, Media, Non-Retail Service Providers, and Publishing

A4-Retailers • Bill Cole, Sea Experience • Patrick Hammer, Dive Right In Scuba

• William Cline, Cline Group Advertising • Dan Orr, Dan Orr Consulting A5-Travel & Resorts

• Bradley Barnett, Clearly Cayman Dive Resorts • Steve Weaver, Dream Weaver Travel

2021 BOARD/STANDING COMMITTEES (CHAIRED BY MEMBERS SERVING ON THE DEMA BOARD) Executive Committee • Dan Orr, Chair • Patrick Hammer, Senior Vice Chair • William Cline, Vice Chair

Finance Committee

Manufacturing Committee

• Tom Leaird, Treasurer

• Jenna Meistrell, Chair

• Brad Barnett

• Craig Lees

• Tim Webb

• Tom Leaird, Treasurer/Secretary

DEMA’s full committee list appears in this report under Member Engagement. DEMA Member companies with an interest in serving on future committees should contact DEMA’s Membership Coordinator, Alicia Vasquez, at alicia@dema.org. ■

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MEMBER ENGAGEMENT WHY BECOME A DEMA MEMBER?

Why become part of any association? Aside from contributing to the “greater good” of your Industry, businesses and people who join associations do so because it helps them work with others in the same industry to solve a business problem or achieve a goal. Now more than ever, our industry needs to work together during these difficult times to make our industry stronger. Members are at the heart of the Diving Equipment and Marketing Association, and DEMA is uniquely positioned to help address concerns from various industry stakeholders, who sometimes have conflicting priorities.

No single individual, stakeholder group, or vendor can bring businesses together to grow the diving industry and solve the issues that the industry faces, especially as we all face government-mandated business requirements resulting from COVID-19. As a non-profit trade 8 | 2021 DEMA Annual Report

association, DEMA’s mission is to bring the various business stakeholders together to grow the Diving Industry. DEMA recognizes that the most successful businesses and business professionals: • Become part of the diving community through networking and communication, supporting a culture and environment that produces valued business and personal relationships.

• Share and exchange information and knowledge within the Community.

• Learn more about running a diving business through education and experience programs that are responsive to changing business needs and relevant to the dynamics of the Diving Industry – especially in the age of COVID. • Participate in legislative and regulatory initiatives that work for a better environment while positively affecting their business.

These are among DEMA’s strategic goals—the very strategies and goals that help fuel businesses and personal growth. While a DEMA membership also provides businesses with access to direct benefits in terms of products and services, DEMA most importantly helps businesses and professional members move along the path of success.

DEMA is a unique trade association because membership includes participants from the entire, vertical, Recreational Diving Industry “sales cycle,” including non-diving businesses connected to DEMA Members by selling products and services to dive professionals.

Membership’s stakeholders include:

COMMUNITY BUILDING DEMA, DEMA SHOW, AND DEMA SHOW ONLINE

The recreational diving community includes thousands of professionals working as business owners, employees, contractors, instructors, diving leaders, and more. We all learn from each other through a variety of resources, and while nothing beats face-to-face learning, networking, and idea exchanges with real people in real-time, we have all learned that it is still possible to connect, learn and grow using virtual, online tools when we must.

One key diving community benefit for DEMA Members is the annual DEMA Show, including educational opportunities and various kinds of meetings. Due to COVID-19, in 2020 for the first time since 1977, the annual DEMA Show was canceled. During that time DEMA offered “DEMA Show Online”, which was a good and temporary way for the professional diving community to connect. During 2021 DEMA was happy to announce that the annual DEMA Show is back in person on November 16th-19th

• A-1 Manufacturers and Distributors of Diving Equipment, including Manufacturing Reps • A-2 Diver Certification and Training Agencies • A-3 Diving Publications, Media, Diving Industry Consultants, Associations and Non-retail Service Providers • A-4 Retail Distribution of Diving Goods and Services • A-5 Dive Travel and Resorts • Associate Members—those organizations, firms, partnerships, associations, or individuals who are ineligible for any other classes of Membership and which subscribe to the Objects and Purposes of the Association.

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while also providing additional online education sessions for those who are still not comfortable meeting in person. Whether in-person or online DEMA Show provides one of the richest learning and networking environments available to any professional member of the diving community.

During DEMA Show the DEMA Association sponsors professional development on a variety of topics, but just as important are the chances to learn from other companies in the industry; those who exhibit and provide professional education directly related to their own products and services.

While adapting to the changes COVID-19 has inflicted on our industry, DEMA Show remains most cost-effective educational meeting available.

Networking is more than just meeting at the bar after Show hours. It involves “engagement” with the activities that are beneficial for your business and personal growth. People and organizations (including DEMA) learn by listening to others.

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ADVOCACY ON BEHALF OF THE DIVING COMMUNITY

Participating in DEMA’s advocacy efforts provides ample opportunity to engage with others, listen to and present various sides of an argument (there are rarely only two sides) and achieve a satisfactory outcome for your business, your personal growth, and the industry. Advocacy through DEMA’s Public Policy Committee and the involvement of the DEMA Membership works to keep the diving community informed and involved.

The entire Public Policy effort for 2021 can be readily seen online at www.dema.org and in the pages of this Annual Report. Starting virtually with online meetings and some changing to in person, many divers and diving professional came together again this year to help change laws in premier diving states such as Florida, and to promote the use of Marine Sanctuaries all over the United States. These opportunities for DEMA Member involvement, from personal testimony to message—writing

campaigns direct to lawmakers, tie us together and make individual company efforts far more effective. Importantly, the voice DEMA brings to the legislative table through DEMA Members makes a difference to the environment and the regulatory situation, keeping dive sites open and accessible while protecting them.

MEMBER RESEARCH DRIVES DEMA PROGRAMS—DIVING COMMUNITY CHAMPIONS

and who makes these community efforts known to the general public. Criteria for Diving Community Champions include: Reach of the Activity, Project, or Program • Is the project or program local, national, or international in scope (all qualify)?

• How many were impacted by the nominated activity?

• How did the activity or project positively impact the DEMA Member business’ communities or society?

Listening to the needs of Members is critical • All sizes and scopes of projects and for the success of the industry and for DEMA. activities are eligible, but the program DEMA’s own member-level research helps to should command appropriate resources establish programs and provides more engagement to have the greatest possible reach; the opportunities. In surveys DEMA Members have size of the DEMA Member Company is indicated their desire for DEMA to “Represent considered when reviewing this criterion. the field of recreational diving to the public.” This desired benefit shows up consistently in the top Positively Showcasing Recreational five most desired benefits when members are Diving to the General Public surveyed, even when members are segmented by • Does the program or project utilize time in the industry, experience, and other factors. recreational diving to demonstrate diving’s significant contribution to the general public?

The Diving Community Champions Award recognizes DEMA Member Companies who are utilizing recreational diving to help advance society and their communities

• Does the activity or project benefit recreational diving or depict diving in a positive light?

The Diving Community Champions Award recognizes DEMA Member Companies who are utilizing recreational diving to help advance society and their communities and who makes these community efforts known to the general public.

2019 Diving Community Champion Platinum Winner: ScubaRadio

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Realizing Objectives and Outcomes Results should demonstrate how the program or project made a difference to the general public using recreational diving as a catalyst and achieving the company’s defined and measurable objectives. The volunteer Diving Community Champions Review Committee select the five finalists who are then voted upon by the DEMA membership.

Thank You to Our Volunteers!

This year DEMA has depended on available volunteers to keep essential committees and activities going. DEMA invites all volunteers to attend the DEMA Membership Meeting on Wednesday, November 17 at 8:30 AM Pacific time to be recognized for their hard work during the year. We salute all volunteers and their effort to help grow the diving industry by working together.

EXECUTIVE COMMITTEE

• Dan Orr (Chair of the Board), Dan Orr Consulting • Patrick Hammer, Dive Right In Scuba, Senior Vice Chair • William Cline, Cline Group Advertising, Vice Chair • Tom Leaird, Scuba Educators International (SEI), Secretary/Treasurer

MANUFACTURING

• Craig Lees, Suunto • Jenna Meistrell (Chair), Body Glove

DIVING COMMUNITY CHAMPIONS

• Greg Holt, Scuba Radio • Joe Letts, Letts Scuba

• Rich Thomas, International Scuba • Robin Bostater, Kaizen Scuba • Tim Webb, Caradonna Dive Adventures

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RETAILER ENGAGEMENT

• Bill Cole, Sea Experience

• Jenny Collister, Reef and Rainforest Travel • Merial Currer (Chair), Patriot Scuba • Patrick Hammer, Dive Right In Scuba • Rich Thomas, International Scuba • Robin Bostater, Kaizen Scuba

INTERNATIONAL MEMBERSHIP

• Craig Lees (Chair), Suunto

• Dan Orr, Dan Orr Consulting • Peter Symes, X-Ray Diving Magazine • Steve Weaver, Dream Weaver Travel • Terry Cummins, Terry Cummins International Business Coaching

PUBLIC POLICY

FINANCE

• Al Hornsby, Professional Association of Diving Instructors

• Brad Barnett, Clearly Cayman Dive Resorts

• Carlos Santana, Hawaiian Islands Recreational Scuba Association

• Tom Leaird (Board Treasurer, Chair), Scuba Educators International ■

• Dan Orr (Chair), Dan Orr Consulting

• Tim Webb, Caradonna Dive Adventures

• Jeff Nadler, Professional Association of Diving Instructors • Jim Gunderson, Divers Alert Network • Stuart Cove, Stuart Cove’s Dive Bahamas • Tom Leaird, Scuba Educators International

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GO DIVE NOW CONSUMER MARKETING CAMPAIGN Among DEMA’s goals is to engage in marketing programs that promote non-commercial diving of all kinds, create new customers, drive consumers into retail stores and resorts, and promote customer retention. The Go Dive Now consumer campaign was created in 2016 to help in this effort. Even during the global COVID-19 pandemic, DEMA continued to provide consumer access to the GoDiveNow. com website, including member store and destination listings, and throughout 2021 DEMA has worked to increase access for Members to consumer marketing materials.

WHO IS THE GO DIVE NOW TARGET CUSTOMER?

Critical to the Go Dive Now campaign is the need to determine a target consumer most likely to become a certified diver, buy equipment, buy dive travel and liveaboard boat trips, dive locally, and return to the retailer for continuing diver education.

To understand this very active diver, DEMA collaborated with Member companies (manufacturers, training 14 | 2021 DEMA Annual Report

organizations, travel providers, and others) to obtain geomarketing information about active divers who have purchased certifications, dive equipment such as regulators buoyancy control devices and dive computers, and dive travel for land-based resorts and live aboard dive boats. Using the resulting data set, DEMA determined the most productive target audience for DEMA’s own advertising effort. DEMA recommends that dive businesses, especially retailers target these same households.

DEMA Members and the industry benefit the most from reaching out to consumers who are willing to fully engage in the sport (buying equipment, diving locally, traveling to dive, and purchasing diver certifications). DEMA also understands that there is a need to find a younger audience of potential divers. Targeting entire “households” that are similar to households of currently active divers gives the Industry access to families which include young people (in their teens) and affluent adults with time and money to spend on diving. These households are also willing to get their kids and grandkids involved in the sport. Reaching out through advertising to these so-called “lookalike” households can help

stakeholders grow their own customer base.

The most recent research suggests that there are multiple target household types currently participating in recreational diving. Dive businesses can review this research and select from these potential target households to provide the greatest return on promotional investments.

When DEMA can return to a full Go Dive Now paid ad campaign these “lookalike” households will be the key to selecting where ads are run on social media. Profiles of the three target lookalike households currently recommended by the DEMA Research Committee can be found here.

Targeting these “lookalike” households, businesses can reach a wide audience effectively while helping keep costs down. The geomarketing information system DEMA used to develop these profiles is the same system used by social media sites like Facebook, and when businesses use social media advertising to reach target households, they can also keep their advertising cost-effective.

LOCATING TARGET HOUSEHOLDS

One of the great advantages of DEMA’s methodology is that the most appropriate target

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household concentrations can be located by postal code on advertising sites like Facebook.

Using the Customer Insights function, it is possible to find households by Zip Code or other methods so that advertising is cost-effective.

When members are using this look-alike household information, it is important to remember that DEMA’s latest research indicates that more than 70% of current U.S. dive store customers live within a 45-minute drive time area of the retail store. The drive time range can change when there are more or fewer stores in the area, and when the store is surrounded by neighborhoods with larger populations.

LEADS FROM GODIVENOW.COM TO DEMA MEMBER STORES

Since January of 2019, the GoDiveNow.com website has incorporated a lead retrieval device. When they click on a DEMA Member store or travel provider link, interested consumers see a pop up in which they can provide contact information directly to the Member, making it possible for the store to follow up with the interested potential diver.

DEMA MEMBERS CAN USE GO DIVE NOW MATERIALS FOR FREE

DEMA continues to make advertising images and video templates available for use by DEMA Members. Members can conduct their own advertising campaigns while saving money on professional images and messaging designed to help bring potential consumers to the store.

To obtain access to the FREE Go Dive Now Member Toolkit, Members should log in to DEMA.org.

GO DIVE NOW MARKETING DIGEST NEWSLETTER

DEMA’s Go Dive Now Marketing Digest is an email subscription providing free 16 | 2021 DEMA Annual Report

social media images and graphics to help subscribers reach a targeted audience of affluent, active potential dive consumers!

Distributed twice a month, the Digest provides high-quality suggestions for social media and promotional content designed for the potential new diver.

Members and non-members like are encouraged to subscribe to the Go Dive Now Marketing Digest. An archive of the suggested social media content and images is available online. ■

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COVID-19 RESOURCES FOR THE INDUSTRY As the global COVID-19 pandemic has continued to present challenges throughout 2021 for the Diving Industry, DEMA continues to provide the Diving Industry with access to operational, financial, and marketing resources to help dive businesses stay engaged with their customers and visible to potential customers.

Since the onset of the pandemic, DEMA has maintained an exclusive web page on dema.org to link resources related to handling COVID-19 issues. That page remains active and available to the industry and offers: • Updates and resources from agencies and news outlets as appropriate • Access to DEMA’s free Retail Reopening Guides series • Free shareable images for dive businesses to use during the pandemic to keep their social media communities engaged 18 | 2021 DEMA Annual Report

DEMA has also kept the industry informed of updates assistance, SBA loan availability and updates, and other resources as they have become available.

MARKETING RESOURCES

In addition to regularly updated information on DEMA’s COVID Resource pages, DEMA also produces the Go Dive Now Marketing Digest newsletter, which is delivered twice a month.

This newsletter provides social media content ideas and shareable images that retailers can use to engage their online communities.

Members and non-members like are encouraged to subscribe to the Go Dive Now Marketing Digest. An archive of the suggested social media content and images is available online.

DEMA SHOW

After over nearly two years of being apart, DEMA is thrilled to be able to reunite the industry at DEMA Show 2021! DEMA Show 2021 will take place at the Las Vegas Convention Center in Las Vegas, NV, November 16-19, 2021. The Show will follow the latest state and local pandemic guidelines and enforce the proper protocols and safety measures deemed appropriate at Show time.

To help DEMA Member exhibitors and buyers struggling as a result of the COVID-19 pandemic, the DEMA Board of Directors activated DEMA’s Disaster Assistance Program and the Manufacturers’ Fund has generously contributed to providing emergency assistance to Exhibitors. The Board has approved assistance for both exhibitors and attendees to emphasize the importance of DEMA Show and in-person business. While the impact of COVID-19 has given rise to helpful technology to allow people to do business remotely, it has also created “video-call fatigue” for those participating online. While face-to-face (or more accurately masked-face-to-masked-face), business will certainly look different at DEMA Show 2021 it is imperative that the industry focus on education and growth as the world continues to change as a result of the COVID-19 pandemic.

More information on DEMA Show 2021 can be found in this Annual Report. ■

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FINANCE COMMITTEE

TOM LEAIRD, CHAIR (BOARD TREASURER)

The Finance Committee provides oversight to all budgetary activities of the Association, approves the budget for the fiscal year, and reviews all Association financial transactions.

DEMA’s financial standards are developed using Generally Accepted Accounting Principles.

In addition to following these high standards, DEMA also retains the services of an outside professional accounting firm to conduct annual audits of all financial activities of the Association, as well as periodic evaluations of financial data. The association’s audited financials are posted on www.dema.org for member review.

GIVING BACK TO THE INDUSTRY

other business-related efforts that were then evaluated for their return on the investment, using standard financial evaluation techniques.

DEMA considers funding many different projects and allocates funds to these projects taking the following into careful consideration:

PROJECTS MANAGED DIRECTLY BY DEMA (BOARD OR STAFF)

This is the most common type of project, usually involving extensive committee and Board discussion, plans and evaluation prior to implementation. Projects of this nature may be proposed internally or by an outside entity, but are managed by DEMA Staff with Board supervision. As such:

One of the most important objectives of the Association is the opportunity to place money back into the diving industry for business • Projects are under direct control purposes. Since January 2003, DEMA has carefully of the DEMA Board placed money into successful promotions and 20 | 2021 DEMA Annual Report

• Project costs can be more easily evaluated and controlled • Project success can be more easily and accurately measured • Compliance with anti-trust regulations can be more easily monitored • Compliance with association objectives and corporate standards can be more easily monitored • Safety risks can be mitigated more easily Projects managed directly by DEMA require evaluation by DEMA staff, recommendations to the Board and Board approval.

PROJECTS NOT DIRECTLY MANAGED

BY DEMA

When projects not managed directly by DEMA staff are considered for DEMA funding, the following should be considered: • Projects are NOT under direct control of DEMA Board or staff. For this reason additional information is required before approval of funding.

• DEMA sets limits on funding to prevent cost overruns and expects periodic reports from the project management team.

• Clear objectives and evaluation measures must be provided by the team managing the project prior to funding.

• Written information must be provided to DEMA regarding the individuals involved, their qualifications to conduct the project, the responsibilities of each, and the terms, limits and conditions of the project.

• Project proposals are reviewed by DEMA counsel prior to approval.

• DEMA must be indemnified against losses, injuries, violations of anti-trust regulations and laws, and other issues appropriate to the project in question.

• Projects must DIRECTLY benefit the diving industry overall.

• Consideration should be given to DEMA member companies when appropriate • Adequate liability insurance naming DEMA, staff and directors is required

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and should be incorporated into any funding agreement as appropriate.

Santo Road, Suite 220, San Diego, CA 92124.

In 2021, DEMA engaged in no transactions which • Approved project funds can only be dispersed involved more than $50,000, or aggregating after a written agreement is executed. more than $50,000, with the same person, and Projects not directly managed by DEMA require in which any director or officer of DEMA or any evaluation by DEMA staff and, in some cases, holder of more than 10% of the voting power of may require evaluation by outside sources.

DEMA had a direct or indirect financial interest.

Such evaluation by outside sources may involve In 2021, DEMA paid no loans, guaranties, additional cost to the team proposing the project indemnifications, or advances to any prior to recommendations being given to the officer or director of DEMA. ■ Board and prior to the necessary Board approval.

Pursuant to the Bylaws of the Diving Equipment and Marketing Association (DEMA), you are hereby notified that you have the right to receive a copy of the DEMA Annual Financial Report upon request.

This Annual Report and the Audited Balance Sheet, Income Statement, and Statement of Changes in Financial Position constitute the DEMA Annual Financial Report. As Treasurer, I hereby certify that those accompanying documents were prepared from the books and records of DEMA. Audited Financial Statements are available to DEMA members via www.dema.org and DEMA’s Annual Report is posted each year on its website, as well.

The names and addresses of current members of DEMA are located at the DEMA Office at 6050

22 | 2021 DEMA Annual Report

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MANUFACTURERS’ COMMITTEE

JENNA MEISTRELL, CHAIR

The Manufacturers’ Committee represents all member manufacturers. Representatives on the Manufacturers’ Committee come from the DEMA Board and can also include non-Board members.

In 2021, in addition to helping fund DEMA Show Exhibitor COVID Emergency Assistance, the Manufacturers’ Fund also allocated $99,200 in assistance for the industry which included:

The Manufacturers’ Committee monitors and allocates monies from the Manufacturers’ Fund, which was established in 1994 when DEMA was re-organized to include all stakeholders in the Diving Industry. The Fund is composed of 5% of the gross receipts from DEMA Show each year and from DEMA Show 2020 Online and is used at the discretion of the manufacturers to promote recreational diving. The allocation of the funds follows a Board-approved process, and the Manufacturers’ Committee has been supportive of many different initiatives over the years.

• $ 64,200 DEMA Show 2021 assistance for additional COVID protocol related costs (pertaining to social distancing, additional facility cleaning & sanitizing, masks, hand sanitizing stations, additional security, etc.)

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• $ 35,000 Legislative Services ■

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PUBLIC POLICY COMMITTEE

DAN ORR, CHAIR

Each year, DEMA establishes a Public Policy Committee which includes DEMA Board members, DEMA Member volunteers and DEMA staff. The Committee works directly with the DEMA Office to review U.S. federal and state issues, and international issues when needed. The Committee gathers input on various issues from Members of the diving community and provides commentary and data to government officials and organizations through the DEMA staff.

• Carlos Santana (Hawaiian Islands Recreational Scuba Association)

• Stuart Cove (Stuart Cove’s Dive Bahamas)

The Committee advocates for protection of the underwater environment, and actively monitors legislation and government administrative activities in the U.S. and globally to prevent adverse legislation which may impact diving businesses, may adversely impact the diving environment, or may restrict access to dive sites.

• Tom Ingram (DEMA) • Bob Harris, DEMA’s Legislative Advocate.

The Public Policy Committee engages in legislative and regulatory activities which promote the health of aquatic resources while protecting diver access to those resources; the goals include keeping dive sites accessible to divers, managing or reducing government regulation, The 2021 Public Policy Committee is composed of: and keeping dive locations clean and healthy.

• Jim Gunderson (Divers Alert Network) • Al Hornsby (PADI) • Tom Leaird (Scuba Educators International) • Jeff Nadler (PADI) • Dan Orr, Chair (Dan Orr Consulting) 26 | 2021 DEMA Annual Report

A key element of DEMA’s Public Policy work is to review advocacy issues with a global perspective; for example, if an issue in Florida could have an impact on the diving industry in another country, or another U.S. state or territory, DEMA will likely pursue action recommended by the Committee. Legislative advocacy often requires substantial association resources (time and money), but advocacy through DEMA’s Public Policy Committee is critical in that it provides all DEMA Members worldwide with a direct voice in the legislative and regulatory process.

During 2020 and 2021 when COVID-19 continued to affect DEMA’s resources, DEMA continued monitoring legislation that could impact the industry, and allocated resources to help prevent the passage of unfavorable regulations. DEMA also connected with DEMA Members to advocate for new laws that would help grow the Diving Industry.

THE INDUSTRY NEEDS DEMA MEMBERS TO PARTICIPATE!

Public Policy is an area where Members can have a direct impact while engaging with DEMA. When DEMA acts or publicly comments on potential legislation DEMA Members receive advance notifications regarding changes to legislation or regulation – whether internationally, or in the U.S. While DEMA acts a voice in legislation, the better strategy is to have Members comment directly to their government officials on issues important to them – numbers make a difference. One of the aims of this effort is to provide such notification far enough in advance of legislative action for Members to act alongside DEMA, multiplying the impact of DEMA’s advocacy activities.

It is also important to note that attempts to influence legislation may be unsuccessful; some favored legislation may not pass out of the legislative body or committee, or an unfavorable bill or regulation may become law despite objections from DEMA or Industry

participants. In the U.S. especially, this is an expected part of the process. But bringing forth the voices of DEMA Members is still the best way to participate in the regulatory and legislative process; sitting on the sidelines most certainly won’t change things for the better.

To the extent possible, the Public Policy Committee reports legislative activity to the DEMA Membership so that they stay informed of issues that relate to the Industry, including business-related activities.

DEMA PUBLIC POLICY POSITION STATEMENTS FOR 2021

DEMA has adopted the following Public Policy Position Statements representing the legislative platform for the association. The Public Policy Committee is responsible for making recommendations on Position Statements to the Board of Directors and advocating specific bills that address approved Position Statements.

Business Management.

DEMA supports legislation that eases expenses and regulatory burdens on the management of diving businesses of all sizes.

Communications.

DEMA supports legislation to protect the right of all businesses to continue to communicate with their customers and to the public at large in furtherance of their purposes. Forms of communications that are considered within this Position Statement include fax, email, telephone, regular mail, mobile and text, all forms of social media, and Internet.

Employment Practices.

DEMA supports flexibility in employment practices for all diving businesses. Legislation will be reviewed if it would increase flexibility or restrict employment practices for our members.

Employment practices on which DEMA supports increased flexibility include: number of work hours, minimum wages, non-exempt vs 2021 DEMA Annual Report | 27

exempt employees, rules regarding independent contractor vs employees, remote employment procedures, and other labor practices.

Environmental Issues.

DEMA supports reforms that promote the health of aquatic resources while protecting diver access to those resources, so that we all have a clean and healthy place to dive.

Health Care.

The diving business community encourages legislation that will allow businesses to offer cost effective insurance programs to their employees without undue regulation or penalty.

Safety Regulations.

DEMA supports reforms that help keep divers safe both at the surface and underwater, but which protect diver access to the aquatic realm.

Workers Compensation Insurance.

DEMA supports reforms that simplify the system, make workers compensation insurance more affordable while maintaining high quality services to the injured, and support our members’ need to access affordable workers compensation insurance programs.

Insurance and Liability Protection.

DEMA supports reforms that generally improve the defensibility of dive product and service providers and support the long-term viability and availability of diving-related business and professional insurance.

Scuba Diving and Snorkeling DEMA supports efforts to grow and expand recreational diving and snorkeling.

Fair Government Practices DEMA supports government programs that help grow the diving industry, reduce regulatory burdens, or provide business or consumer incentives for participation. DEMA seeks to include recreational diving in government-based programs when beneficial programs that assist non-diving activities are proposed or already exist.

28 | 2021 DEMA Annual Report

ADVOCACY DURING 2021

Advocacy During 2021 DEMA devoted resources to numerous diving-related Public Policy issues. Among them are: 1. Opposing the shark feeding (diving) ban in federal waters – Florida Fish and Wildlife Commission and Florida Keys National Marine Sanctuary 2. Port Everglades – Dredging Process 3. Protecting the Florida Springs: Nestle Water Bottling Plant 4. Prop 65 in California 5. Occupational Licensing and Certifications 6. 529 Savings Plan 7. 30 by 30 federal legislation 8. Manatee deaths in Florida 9. Goliath Grouper (opening the harvest): https://www.tcpalm.com/story/sports/ fishing-boating/2021/09/16/floridafishing-goliath-grouper-protected-maysoon-come-home-dinner/8336662002/ 10. Florida lobster mini-season task force 11. Dutch Springs

OPPOSING A FEDERAL SHARK FEEDING BAN

In 2019, NOAA issued a Draft Environmental Impact Statement for Florida Keys National Marine Sanctuary (FKNMS)1 which included a new prohibition on feeding fish in federal waters that are part of the Sanctuary. Section 3.2.6 Fish feeding regulation, Alternative 2, 3 and 4 would prohibit divers from engaging in the practice of fish feeding, and (2) anyone from operating any vessel for hire for the purpose of carrying passengers to any site in the sanctuary to engage in fish feeding or to allow such passengers to observe fish feeding. The prohibition would NOT extend to fishing, where fish feeding, including chumming to harvest sharks (the same activity sometimes used by divers to observe and photograph sharks) would be permitted.

DEMA has noted that this prohibition currently exists in Florida state waters, supported by the Florida Fish and Wildlife Commission (FWC), and that FWC personnel serve on the FKNMS Advisory Council. Given that FWC prohibited fish and shark feeding in Florida state waters more than 20 years ago (over DEMA’s and the diving industry’s objections) and has been vocal about its opposition to fish (shark) feeding FOR DIVERS while permitting it for fishers, it is logical to conclude that this push for a ban on shark feeding in federal waters is coming from FWC personnel.

Further, because FWC appears to support harvesting of sharks by fishers, prohibiting shark feeding (and therefore most shark diving) reduces the value of live sharks, while simultaneously increasing the relative dollar value of harvest.

Data does NOT indicate the need to prohibit shark feeding. In fact, multiple peer-reviewed studies indicate that “provisioning ecotourism” – using small amounts of food to attract sharks for the purpose of observing and photographing them – is responsible for creating more shark advocates seeking to protect these animals than any other activity or law. Of concern is that,

once prohibited in federal waters in FKNMS, a prohibition on shark feeding in all federal waters is the next step. This will effectively end using provisioning ecotourism to photograph or observe sharks anywhere in the U.S., and destroy the businesses built around this activity. Instead of dispelling the myths about sharks, this prohibition is more likely to allow them to perpetuate.

In 2019, DEMA commented on the FKNMS Restoration Blueprint, including obtaining industry-wide support for many of the sections in the DEIS but expressing opposition to any changes proposed in Section 3.2.6 on fish and shark feeding.

In late 2020 during its quarterly meeting, the Florida Fish and Wildlife Commission (FWC) staff again recommended new rules to Commissioners that, if enacted, would allow fishers to use food (chum) to attract sharks in order to harvest (kill) them in the federal waters of Florida Keys National Marine Sanctuary (FKNMS) in South Florida, but which would prohibit divers or boaters from using natural food (such as fish) to attract sharks to observe or photograph them.

Office of National Marine Sanctuaries. 2019. Draft environmental impact statement for Florida Keys National Marine Sanctuary: A Restoration Blueprint. U.S. Department of Commerce, National Oceanic and Atmospheric Administration, Office of National Marine Sanctuaries, Silver Spring, MD.

1

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DEMA expressed concerns to the Florida Fish and Wildlife Commission again in both written and verbal comments. During 2021 FWC has continued to recommend to federal managers that fish (shark) feeding should be prohibited.

SHARK DIVING OPERATORS

Using anecdotal information FWC contends that sharks are in such abundance in Florida and are interacting with fishers in such numbers that more animals and more species should be open to harvest. DEMA contends that this action is contrary to actions advocated by scientists. FWC scientists expressed the opinion that sharks are learning behaviors such as reacting to the sounds of boats or spearfishing, an opinion dispelled by earlier research conducted by Dr. Neil Hammerschlag, noted shark researcher.

FWC indicates this is an issue causing: • Loss of catch and mortality of released fish • Lost revenues and gear damage • Reduction in fishing efficiency • Creation of negative attitudes towards sharks Shortly following the FWC meeting DEMA was contacted by several Shark Dive operators, running operations in Florida and Hawaii.

These operators expressed concern about FWC’s direction, and the possibility that any restrictions in federal waters in Florida would also be applied in all federal waters, effectively destroying their businesses. DEMA has provided these operators with access to guidelines that currently exist for managing marine encounters. DEMA met periodically with these operators throughout 2021 to help guide the next steps in preventing enaction of the feeding prohibition. The operators have now formed a 501 (c) 3 organization to formulate their own marine encounter guidelines.

OPENING THE SHARK HARVEST

In May 2021, FWC convened a panel of fishers, alongside distinguished scientists to discuss 30 | 2021 DEMA Annual Report

the issue of shark interactions with fishers, and to propose new regulations. Dr. Guy Harvey, noted conservationist and artist, as part of the panel, indicated that more shark encounters were actually a “shifting baseline,” and that fishers today interacting with sharks are unaccustomed to having these interactions as the shark population recovers. Dr. Harvey contends that recovery is not complete, and that these shark encounters are still not where they should be, and that species like hammerheads, black tips, lemons and bulls should not be harvested. Other sources also agree with Dr. Harvey, refuting the claim that shark populations are recovering. FWC’s presentation from October 2021, proposing a relaxation of shark harvesting regulations, can be seen here.

PORT EVERGLADES DREDGING

In 2016, DEMA, along with several other organizations brought suit against the U.S. Army Corps of Engineers (USACE) to stop the plans for dredging Port Everglades, in Fort Lauderdale Florida. The action was taken as the plans submitted by the USACE would have followed a failed dredging procedure used in the Port of Miami which killed many of the living reefs near

Miami, and likely would have the same effect in Fort Lauderdale. Since then, the USACE has submitted a Supplemental Environmental Impact Statement with the intent of moving forward the Port Everglades Navigation Improvements Project.

In this project USACE will dredge and deepen the channels in and around Port Everglades, directly adjacent to or on top of the Florida reef tract and its thriving population of coral colonies.

DEMA and others objected to this new supplemental plan due to the risks the project presents to nearby coral reefs, the fragile status of Florida’s corals, and the events that transpired during the Miami Harbor expansion project. The expansion of Port Everglades has the potential for widespread and significant impacts on the ecological and economic resources of Fort Lauderdale and nearby coral reef ecosystems. The letter found here was submitted as part of the public comments on this Supplemental Environmental Impact Statement.

Unfortunately, we believe the Army Corps will proceed with this supplemental plan as written.

DEMA continues to partner with these other organizations and monitor the situation.

FLORIDA SPRINGS AND NESTLE WATER BOTTLING

The Nestle company has been bottling water from Florida’s springs in Suwannee County for several years, operating through the owners of the land through which Ginnie Springs can be found.

In 2020, through a permit with Seven Springs Corp (the owners of Ginnie Springs) the Nestle company proposed to increase the amount of water being pumped from the springs. In March 2020, the Suwannee River Water Management District staff recommended that the board deny the Nestle permit. Seven Springs filed a suit to overturn this denial, and in 2021 a judge recommended that the district approve the permit.

However, the decision to approve this issue fell to the Suwanee River Water Management District.

DEMA became aware that the Management District planned to approve the application and contacted the Management District Board, offering public comment and requesting that the Board deny the application. Unfortunately, the Board unanimously approved the application, even though most comments were in opposition.

DEMA’s comments can be found here.

CA PROP 65 RULEMAKING MODIFICATION

The state of California proposed an update to Proposition 65 regulations, which require labeling products that contain potentially harmful chemicals. Some manufacturers in the diving industry are required to label their products. The revision would require the use of long form labels, which would be problematic to some products (on physical size alone) and the state did not follow its own rules with regard to allowing for public comment. More information is available here:

• https://oehha.ca.gov/proposition-65/crnr/ notice-public-hearing-and-extension-publiccomment-period-amendments-article-6 • https://www.jdsupra.com/legalnews/thelong-and-short-of-it-changes-7737721/ 2021 DEMA Annual Report | 31

In March 2021, DEMA commented to the Office of Environmental Health Hazard Assessment (OEHHA) on its Proposed Rulemaking: Amendments to Article 6, Clear and Reasonable Warnings Short Form Warnings (January 8, 2021). DEMA opposed the proposal since it is in direct conflict with the Proposition 65 regulations that took full effect on August 30, 2018, following years of development through public discussion and collaboration.

DEMA’s comments can be found here.

OCCUPATIONAL LICENSING AND CERTIFICATIONS

DEMA is continuing to monitor federal and state occupational licensing bills which could have an impact on certifications in the diving industry. These bills are based on model legislation originating from the Institute for Justice (IJ) and American Legislative Exchange Council (ALEC) and it is clear that there is a “movement” to create similar bills in many states beyond those currently outlined herein.

ALEC is considered the Republican conservative group that meets annually and provides drafts “model legislation” for state legislators to use.

The Democratic Party version is the National Conference of State Legislatures (NCSL), which for many more years been suggesting “model legislation.” ALEC was funded for many years by big companies such as McDonald’s, Coca-Cola, AT&T, and others, but these organizations stopped funding ALEC a few years ago. Now ALEC is funded by groups such as the Koch brothers, explaining why model legislation has recently taken a Libertarian direction, such as removing barriers to jobs by eliminating certifications.

Some state legislation being considered (or recently passed) has been written in such a way as to negatively impact the diving industry, and in a way that could pose risks to the public for some professions (including recreational diving instruction). In some cases, language contained in these bills may not 32 | 2021 DEMA Annual Report

effectively separate private and state-mandated certifications and licensure, potentially creating additional confusion for the diving industry.

As an active member of the Professional Certification Coalition (PCC), DEMA is monitoring these state bills as well as federal bills that may impact professional certifications in our industry.

FEDERAL 529 SAVINGS PLANS

DEMA supported 2020 legislation to utilize federal 529 savings plans—originally designed as tax savings plan for college and trade school—to also be used for certification and training purposes.

While the original 529 bill did not proceed in the federal legislature, in 2021 DEMA is following a new version of the Freedom to Invest in Tomorrow’s Workforce Act which was introduced

by Rep. Abigail Spanberger (D-VA), joined by Reps. Fred Upton (R-MI), Dean Phillips (DMN), and Rob Wittman (R-VA) (HR 2171). An identical bill was also introduced in the Senate

by Senators Amy Klobuchar (D-MN) and Mike Braun (R-IN) (S 905). The text can be found here.

This bipartisan legislation, with new language that includes suggestions from DEMA, would permit beneficiaries of 529 savings plans to use funds in those accounts to cover costs associated with workforce training and obtaining or maintaining postsecondary credentials, including professional certifications such as divemasters/dive controllers, assistant instructors, and instructors. DEMA will continue to follow this important legislation which could help fund training and certification for those wishing to enter the diving industry.

“30 BY 30” FEDERAL LEGISLATION

In May the Biden Administration issued a report called Conserving and Restoring America the Beautiful. The report, also called the “30 x 30” plan because it proposes to conserve 30% of lands and waters by 2030, discusses various

strategies to impact conservation in the U.S. This effort presents a challenge to having access to some outdoor spaces because government’s first steps to conserve often involve “restricting access” to the areas to be conserved.

DEMA joined with a group of trade associations representing various outdoor and recreation activities to comment on the report, advocating for continued public access to the lands and waters. This is a sweeping Executive Order, and bears watching over the next year as more regulation is proposed, and potentially, access to land and water sites is restricted.

MANATEE DEATHS IN FLORIDA

During the past 12 months more than 900 manatees have died in Florida waters. It appears that these deaths may be tied to water quality issues that have killed vital sea grasses on which the manatees feed. When the animals retreat to warmer waters in Florida, they can no longer find the food sources to which they are accustomed, and they starve to death.

DEMA contacted the Save the Manatee Club with which DEMA had previously partnered to create a public service announcement to help educate divers on the best way to see manatees in the wild. Save the Manatees, along with several other environmental organizations joined to file

suit against the U.S. Fish and Wildlife Service for failing to revise outdated critical habitat for Florida manatees, putting the population at risk.

DEMA offered to join the suit and the groups involved ultimately determined that they would move the legal issues forward on their own. DEMA continues to monitor this More information is available on the manatee mortality event from the Florida Fish and Wildlife Commission.

GOLIATH GROUPER: FLORIDA PROPOSES OPENING THE HARVEST

For more than 10 years DEMA has successfully fought the fishing community in Florida, which has advocated for opening the Goliath Grouper fishery, which would discontinue a moratorium that was put in place in 1990 to stop the decimation of goliaths, due to extreme overfishing. DEMA has fought this re-opening of the harvest for numerous environmental and business reasons. Now, even in the face of having no data to do so, the Florida Fish and Wildlife Commission (FWC) is planning to reopen the fishery to a “limited harvest” of some 200 animals. Doing so will run counter to FWC’s own assessment tools, and will serve no useful scientific purpose. According to FWC’s own data: • FWC attempted to assess the Goliath Grouper population through traditional stock assessments three times (2004, 2010, and 2016), and each assessment was rejected by independent expert reviewers. The Commission’s most recent stock assessment in 2016 was rejected by a group of independent scientists for use in Goliath Grouper stock management in federal waters, who stated that, “the results were not deemed suitable primarily because of missing information needed to generate an accurate ‘model’ of the fishery.” Neither the Commission nor fisheries scientists have sufficient data about the life history of these fish, and lack basic information about such data points as the maximum 2021 DEMA Annual Report | 33

age of Goliaths, and information about the stock of Goliaths outside the southeastern U.S. FWC’s own information indicates a continuing need for further study prior to opening this species to harvest of any kind.

• In 2018 FWC adopted “alternative” methods and metrics of assessing the stocks of Goliaths. These alternative metrics included: • Long-term stability or increase for juveniles and adults by measuring the relative indices of abundance.

• Increased adult density on natural reefs.

• Increases in genetic diversity, indicating a low level of inbreeding—An increase in genetic “effective population size” for Atlantic and Gulf stocks.

• An expanded presence of fish in older age classes, tied to older, larger females which produce more eggs of higher quality and, thus, are particularly important to stock productivity and resilience.

Unfortunately, FWC’s own selfimposed metrics for recovery indicate that no significant, measurable Goliath Grouper recovery has taken place.

34 | 2021 DEMA Annual Report

Mercury Content of Goliath Flesh: In addition to the fact that these FWC-adopted alternative stock assessment tools point to little or no recovery of Goliath Grouper stocks, the fact that the flesh of these fish cannot reasonably be consumed due to high levels of mercury, adds to the contention that harvesting them for food or other reasons is inappropriate.

Dive Attractions: Since the prohibition of harvesting Goliath Grouper began in 1990, these animals have become extremely popular hosts to underwater habitats and are mentioned frequently by visiting/tourist divers who greatly enjoy watching these remarkable creatures roam the ocean floor. The Goliath Grouper’s size, visibility, low birth rate and slow movement seem to trace another of Florida’s truly majestic waterborne creatures, the Manatee, a protected species that also has considerable ecotourism value. If harvesting of Goliaths is allowed without verified stock assessments and measurable recovery, we believe Goliath Grouper could easily be thrown back to species extinction.

In addition to concern regarding the stocks of these fish, DEMA also relies on the opinions

of divers and dive-related businesses regarding the current harvesting status of Goliath Grouper. In DEMA’s survey of divers and dive professionals, more than 85% indicated their desire to maintain the current moratorium on harvesting the Goliath Grouper.

DEMA and the diving industry have indicated to FWC that we continue to favor the following: 1. Maintaining the current harvesting status of the Goliath Grouper in Florida; that is, harvest and possession should be prohibited.

2. In addition to the current harvest moratorium, a prohibition on possession should be enacted, because, as FWC acknowledged in their April 2018 presentation, presently Goliath Grouper are uncommon-to-absent in much of their historical range outside of South Florida. Care should be taken to allow for Goliath Grouper to return to their historical habitats before any harvest – even a limited one—is considered.

3. FWC or NOAA (or another appropriate agency or scientific organization) should continue monitoring the stocks of Goliath Grouper through the traditional or alternate methods for a long enough time to obtain a genuine stock assessment of these animals. More time is needed.

4. The FWC should reject any recommendations to collect data while using a “limited harvest” of these fish. In fact, the FWC has noted in the past that such a “limited harvest” will serve no valid data collection purpose, stating; “It is important to note that any data gathered from a limited harvest will not result in accepted stock assessment” and warn that such a limited harvest raises “concerns about consumption…because of high levels of mercury in large Goliath.” A limited harvest seems to serve no useful or valid purpose, except, perhaps the possible ‘opportunity’ of harvest for a small group of fishers.

5. FWC or NOAA (or another appropriate agency or scientific organization) should conduct additional research on the age of these creatures, such that any future assessment would have more validity.

6. FWC should review its current regulations to determine if protections for Goliath Grouper could be implemented that are comparable to those reasonable protections afforded Manatees.

DEMA will continue to monitor the proposed rules for opening the harvest, which are scheduled to be revealed in December 2021. Interested parties should review this short film, and consider contacting the FWC Commissioners to voice their opposition to these proposed actions at commissioners@MyFWC.com.

LOBSTER MINI-SEASON TASK FORCE

Lobster mini-season is an annual event in Florida, held in late July. The mini-season was originated as a way to reduce the user conflicts between the commercial fishing interests and the recreational divers who are lobster fishers. The mini-season is a two-day recreational diver event that draws thousands of divers to Florida each year.

In 2021, DEMA CEO Tom Ingram joined a task force based in the Florida Keys whose

2021 DEMA Annual Report | 35

original purpose was to discuss the addition of lobster harvest tags and other regulations to the diving community. DEMA joined the task force because there were no diving interests within the group, and a voice from the diving community was needed to prevent additional unnecessary regulation and replace it with education and promotion.

DEMA provided guidance on how to assist by educating and how to reach divers by using the list of those who had paid for a Florida fishing license and additional lobster tag. The task force developed a website and social media marketing to which DEMA contributed. Florida Fish and Wildlife provided the license list to the task force allowing an email promotion campaign that reminded divers of the current regulations and safety requirements. The education effort was successful in that there were fewer negative incidents connected to mini-season and more promotion of the activity, all without adding regulation.

DEMA has also been invited to participate in the 2022 Lobster Mini-Season Task Force.

DUTCH SPRINGS

One of the key elements of DEMA’s work is the gathering of economic data. In a public policy setting, economic data tends to drive regulatory and legislative decisions. Those industries with the biggest economic impact enjoy the biggest opportunity to sway regulation and legislation.

In August news spread across the diving industry that Dutch Springs, located in Pennsylvania, had been sold and would eventually close down to divers. As this location has been a diving staple for more than 40 years, the industry was concerned about losing one of the best inland dive travel and training locations in the Northeastern U.S. While the sale was already underway before the information became public, DEMA did work with PADI and others to provide information 36 | 2021 DEMA Annual Report

regarding the impact to the local and regional diving and tourist economies of closing Dutch Springs to the diving community. Several attempts were made to find a ready solution that would keep the site open, but it appears now that Dutch Springs will close following the 2022 dive season. DEMA continues to watch this issue and will provide information as needed.

SUMMARY

2021 has again been a busy legislative year for the Diving Industry. In addition to

continuing to provide COVID-19 resources for the Industry, DEMA has been involved with providing information to the community about financial relief for small businesses included dive operations, keeping access to dive sites open, and opposing regulations and legislation that adversely impacts the industry.

Public Policy has long-term impacts on international, regional, and local dive business.

DEMA and the Public Policy Committee recommend that all diving businesses become involved with these important issues. ■ 2021 DEMA Annual Report | 37

DEMA SHOW UPDATE DEMA SHOW 2021: NOVEMBER 16-19 IN LAS VEGAS, NV

DEMA commends all DEMA Show 2021 exhibitors, attendees, and guests as we move forward together in the face of adversity! Even as the pandemic continues, the dive industry continues to adjust, grow, and learn to do business and succeed under new circumstances. DEMA Show 2021 brings us together with face masks (unfortunately NOT those of the underwater variety), hand sanitizer and social distancing adjustments but the important thing is we continue to gather and find ways to engage so that we can connect, grow, and even in the face of COVID-19, conduct business better!

In 2021, the Show is fortunately being held at the Las Vegas Convention Center in Las Vegas, NV. This renowned facility has been awarded the Global Biorisk Advisory Council (GBAC) 38 | 2021 DEMA Annual Report

STAR certification, which demonstrates the highest standards for daily cleaning, air filtration, and sanitization. You can learn more about their standards and protocols for maintaining a clean and safe facility here.

Attendees and exhibitors are free to take additional safety steps while at DEMA Show, but in addition to these facility standards those attending or exhibiting at DEMA Show may take some comfort in the many precautions being implemented to keep registrants healthy and safe, including, but not limited to: • Masks required and available for all visitors entering the convention center • Hand sanitizer stations set in large quantities throughout the DEMA Show floor and meeting rooms

• DEMA-Sponsored Education rooms sanitized between sessions • Social distancing encouraged using signage, stanchion, and other common methods • Registration and badge pickup touch points reduced • Plastic shields provided at registration and DEMA central to minimize transfer • Guests have the option of wearing a bracelet to indicate their level of comfort for physical interaction with other guests • Food services complying with local regulations regarding handling and COVID-19 As you know, DEMA Show 2021 is missing several long-standing exhibitors. While we are disappointed attendees will be unable to see them this year, we are extremely glad to bring attendees hundreds of contracted exhibitors that are excited to meet, connect and do business with Show attendees. DEMA-Members, exhibitors, and attendees have expressed immense excitement and eagerness to return to an in-person DEMA Show and while we know this year’s Show experience will be a different one, we also expect it to be valuable—given the circumstances, perhaps more valuable than ever before. DEMA Show brings great value to the industry by providing an unmatched opportunity for participants to network with other industry professionals, as well as to see many industry offerings all in one place, in a cost-effective way.

As a non-profit trade association, DEMA will continue to put the money earned through DEMA Show back into the industry, including to fund public policy efforts, research, professional development offerings, disaster assistance, future DEMA Shows, and more. Everything DEMA does is in support of the recreational diving industry. You are our community, and we continue to do everything in our power to support you. Again, thank you to those who for joining us in Las Vegas this November.

NEW IN 2021!

DEMA SHOW PROVIDES PRE-SHOW EDUCATION ONLINE

DEMA Show 2021 Education Package Registrants had exclusive access to weekly online DEMASponsored Education sessions from October 12 to November 3, 2021. New speakers joined attendees online to offer new business and career-related programs each week leading up to the in-person Show. This was a new feature for DEMA Show 2021, complimenting the in-person Education offerings.

NEW IN 2021!

DEMA DIGITAL RECOGNITION BADGE IN MARKETING EDUCATION

You are a diving professional and have many achievements: obtaining a diving leadership or instructor credential, joining a professional training organization or business association, workplace recognition for a job well done.

2021 DEMA Annual Report | 39

Where are those achievements currently displayed? In your home? On your desk?

There’s a better way to surface and share those achievements with the wider diving industry and even with potential employers: digital credentials. Digital recognition badges are a graphical representation of a person’s abilities and competencies, combined with a verifiable description of the knowledge and activities required to earn them. Digital badges are the quickest, most secure way to verify knowledge, skills, and abilities.

For the first time DEMA offers professional development sessions leading to a Digital Recognition Badge in Marketing Education, when DEMA Show Education Package registrants attend and complete at least five designated Marketing Education sessions during DEMA Show 2021!

NEW IN 2021!

DEMA OFFERS EMERGENCY ASSISTANCE TO DEMA SHOW EXHIBITORS AND BUYERS

The DEMA Board of Directors has activated DEMA’s Disaster Assistance Program and DEMA’s Manufacturers’ Fund has also stepped up to help DEMA Show 2021 exhibitors and buyers struggling as a result of the COVID-19 Pandemic. Those in need of support to attend or exhibit at DEMA Show can apply for the following funds during DEMA Show at DEMA Central, November 16-19: • Buyer Assistance: One registered Buyer from each DEMA Member operation can apply for reimbursement for onenight’s stay at the per person base-rate at an official DEMA block hotel.

• Exhibitor Assistance: Companies can apply for emergency assistance in the amount of $300 (DEMA Member) and $100 (non-member) per 100 net square feet of contracted, paid exhibit space. For complete details visit dema.org.

Those attending the in-person DEMA Show 2021 and the eligible Marketing Education sessions, will gain knowledge about marketing from experts in their field. Participants receive a digital badge that can be used to verify the sessions attended DEMA SHOW 2022: and completed – whether you use your badge to verify professional development participation for NOVEMBER 1-4 IN ORLANDO, FL current or future employers or to help demonstrate In 2022, DEMA Show will re-emerge in your value as a volunteer or business owner. the South Halls of the Orange County Convention Center in Orlando, FL!

F O O R P DEMA 2021 Marketing Education

40 | 2021 DEMA Annual Report

DEMA SHOW TIMING AND LOCATION SELECTION

DEMA Show locations and timing are determined using Attendee and Exhibitor surveys as well as by researching convention center and hotel availability. DEMA Show is one of the 250 largest trade shows in the United States and as such, there are a limited number of convention facilities large enough to hold the annual event. When evaluating and selecting the convention facilities, city, and hotels, DEMA uses Board-approved criteria including:

• The city must have cultural or entertainment attractions and special event venues appealing to the diving professional. There should be a variety of restaurants and other entertainment within a 10 minute walking distance of the host hotel/convention center.

• The Show city must be a major airline destination for North American and international travelers. The city should have a substantial number of direct flights coming into the city and be a hub for at least one major airline.

• “Blended” labor rates for the city must be within 10% of the median average as compared to the convention industry market for the previous five years.

• The convention facility must meet DEMA’s exhibit and meeting space requirements,

and be in a location convenient to major hotels, an international airport and city points of interest. The minimum conventions center size is 500,000 gross square feet.

• The convention facility must include a minimum of 30 meeting rooms in the convention center, capable of holding at least 50 to 100 people while using classroom style seating.

• There must be first-class hotels convenient to the convention and exhibit facility for 10,000 attendees. Hotel facilities should accommodate a minimum of 1,200 to 1,400 rooms peak night pick up, with 4,000 minimum total room nights required within DEMA’s block.

This number of hotel rooms must be within a 5-mile radius/15 minutes travel time (whichever is less) of the convention center. ■

Pictured: DEMA Show 2019

2021 DEMA Annual Report | 41

DIVING COMMUNITY CHAMPIONS The Diving Community Champion Award recognizes DEMA Member companies using recreational diving to benefit their communities and the public.

The 2021 Diving Community Champions were nominated by a DEMA Member company,

selected as finalists by the Diving Community Champion Review Committee and ultimately selected by a vote of the DEMA Membership. The recipients will be honored at the DEMA Member Update and Annual Meeting at DEMA Show 2021.

Congratulations to the 2021 Diving Community Champion Recipients!

2021 PLATINUM WINNER: FORCE BLUE

FORCE BLUE is a non-profit 501(c)(3) organization that seeks to assist Special Operations veterans in their transition back to civilian life by restoring their sense of pride, fellowship and purpose and giving them a positive outlet through which to utilize their training and teamwork to help preserve the planet.

42 | 2021 DEMA Annual Report

2021 GOLD WINNER: ADAPTIVE DIVING ASSOCIATION

Adaptive Diving Association is the only DEMA member that exclusively manufactures and supplies adaptive diving equipment.

ADA has made it their purpose in life to design and manufacture diving equipment specializing in enabling adaptive individuals the independence that water and diving can provide.

2021 SILVER WINNER: OCEAN REEF GROUP

In response to the severe and mounting disruption to the global supply of Personal Protective Equipment (PPE), caused by the COVID-19 pandemic, Ocean Reef Group designed and patented an adaptor to transform their Full Face Snorkeling Masks into PPE respirators and/or ventilated solutions for COVID-19 health care professionals and patients.

A complete list of finalists and their nomination submissions can be found online at DEMA.org. ■

2021 DEMA Annual Report | 43

RETAILER RESOURCE COMMITTEE

MERIAL CURRER, CHAIR

DEMA established the Retailer Resource Committee in 2014 to focus on developing ways to engage retailers, support retail professional development, provide access to pertinent and actionable data, and, ultimately, support retail business growth. Since that time the goals of the Committee have expanded, and the name of the Committee has changed to the Retail Engagement Committee.

The 2021 Retail Engagement Committee consists of individuals working with or owning retail and travel companies from different regions. The operations also vary in size and use a diversity of vendors (manufacturers and training organizations). Each member of this committee brings their experience and expertise to retail issues under discussion.

As the primary audience for DEMA Show is retailers, retail staff and instructional 44 | 2021 DEMA Annual Report

staff, this Committee also contributes to the development and production of DEMA Show, especially the in-person and online professional development components of the event.

The 2021 Retailer Resource Committee includes: Robin Bostater, Kaizen Scuba; Bill Cole, Sea Experience; Jenny Collister, Reef and Rainforest Travel; Merial Currer, Patriot Scuba (Chair); Patrick Hammer, Dive Right In Scuba; Joe Letts, Letts Dive; Rich Thomas, International Scuba.

During 2021, the Retailer Engagement Committee was responsible for the following: • Development of a retail job analysis and validation study • Recommend professional development topics for DEMA Show – inperson and online programs

• Evaluate store-related business benchmarks for assisting retailers

RETAIL JOB ANALYSIS AND VALIDATION STUDY

Early in 2020 the committee reviewed the toplevel tasks performed by retailers to determine the frequency with which the tasks are performed and the importance of the tasks to successfully owning or running a dive center. This information was utilized as speaker and topic proposals for DEMAsponsored education were solicited and reviewed.

The analysis included 14 different topic areas: • Marketing and Understanding Current or Potential Retail Customers Living Near the Dive Store • Understanding customer buying behaviors and attitudes in the store and online

Show 2020 Online, and the in-person and online professional development sessions for DEMA Show 2021. In 2021 the evaluation was revised and will be used in 2022 to obtain additional information from the wider retail membership for future professional development activities.

PROFESSIONAL DEVELOPMENT PROGRAMS

Whether for DEMA Show or for online consumption during the year, the Retailer Engagement Committee reviews and makes recommendations for all of DEMA’s proposed retail education programs. The process consists of reviewing submitted speaker/ topic proposals, which include education outcomes and objectives, relevance to the current market, and speaker quality.

In 2021, the Committee focused on four tracks: Special Topics, Sales, Operations, and Marketing.

• Dollar Planning for Merchandise Inventory As DEMA is offering online education programs • Merchandising Agreements – Buying programs as part of the 2021 DEMA Show Seminar and Manufacturer/Service Vendor Concessions attendee package, the Committee selected topics that were best presented in an online format • Merchandise and Service Vendor Operating and those that were best presented in-person.

Procedures and Policies • Sales Forecasting in the retail dive store

• Using standard accounting methods to determine retail inventory value • Using Retail Accounting Statements to help monitor and grow the business • Understanding Pricing in the Retail Environment • Setting Pricing based on Profit and Other Pricing Strategies • Understanding Selling in the Retail Environment • Promotional Strategy • Retail Advertising and Advertising Management • Internet, social media, and other marketing tools The analysis was key to producing the professional development sessions for DEMA

DEMA’s in-person Marketing track is unique in 2021; attendees completing select in-person

F O O R P DEMA 2021 Marketing Education

2021 DEMA Annual Report | 45

presentations are eligible for a new digital recognition badge in Marketing Education.

The Committee selected a total of eight different Marketing presentations that fit the requirements for the digital badge, and attendees can earn digital recognition by completing any five sessions from the eight available.

Once the requirements are completed the attendee applies to receive access to the digital

badge. Digital badges are portable, and can be placed on social media, in email signatures, and as part of resumes. These badges are unique and valuable in helping verify that the learner has furthered their professional development.

The digital badge is linked to an independent website which describes the requirements the learner met to receive the badge, providing proof for the learner’s educational resume.

DEMA SHOW 2021 SESSION (ONLINE)

SPEAKER

Cause-Marketing: The Benefits of “Leading With Purpose” Communicating in a MultiChannel World Entrepreneurial Financial Projections in Starting or Expanding a Dive Facility How to Create a DIY SEO Campaign (You Will Not Find These Tips Anywhere Else) How to Unlock the Potential of Ecotourism and Boost Your Business Maximizing Your Marketing Budget: Writing Press Releases Time Is Money! Real World Time Management Strategies

Megan Crain Jennifer Shaheen & Tec Clark Paul Howe

46 | 2021 DEMA Annual Report

Steve Huskey Andrea Rivera-Sosa Paul Howe David Fellman

DEMA SHOW 2021 SESSION (IN PERSON)

SPEAKER

“I’ll Just Get It Online” — Strategies to Keep Your Customers Coming Back to Your Door Automate Your Marketing!

Become A Power Influencer: A Unique Way to Attract More Customers Creating a Marketing Strategy for Your Dive Business’s Bricks and Clicks Customers Decoding Your Customer Data and Creating a Better Dashboard Deep Dive into Leadership Development DEMA Member Update and Annual Meeting Demystifying Learning Styles: Setting Students up for Success Discover Your Technology Psychology Diving Through Darkness Facebook—Instagram—Twitter—LinkedIn: The Choices Can Be Overwhelming! How to Drive New Business With Social Media Games People Play; Selling Skills Become Fun How to Create an Effective Plan for Advertising, Marketing and Promoting Your Dive Shop How to Dominate YouTube (Tips You Won’t Find Online) How to Make Your Data More Valuable Than Oil Improving Your Profits All Year Long: Simple Solutions for Enhancing Your Retail Business Operations Inspiring Leaders for Improved Performance Is Your Air On? Closing Skills That Will Fill Your Sales Tank Making Sense of Online Marketing: A Simple Checklist for Success Retail Trends You Need to Embrace Right Now Rock Your Marketing with Facebook and Instagram!

Seek or Discover – Mysteries to Customer Acquisition and Nurturing Revealed Selling Up! Sales Strategies for Growth Small Town Scuba Success: Tips to Succeed and Thrive in “Small-Town USA” Stealth Marketing Strategies to Grow Your Business!

The Top Tech in a Decade with Your Nerdy BFF Using Social Media for More Than Just Marketing Your Dive Business Visual Merchandising and Store Display: How to Help Your Product Sell Itself!

Yes, You Should Learn About Your Marketing Analytics!

You + Customers = Creating a Story That Sticks

Anne Obarski Ken Countess Tec Clark Lynn Switanowski Jennifer Shaheen Shelli Hendricks Tom Ingram Shelli Hendricks Beth Ziesenis Matt Jackson Ken Countess Tom Shay Tom Shay Steve Huskey Steve Huskey Lynn Switanowski Shelli Hendricks Anne Obarski Ken Countess Georganne Bender & Rich Kizer Ken Countess Jennifer Shaheen Anne Obarski Marc Dean Georganne Bender & Rich Kizer Beth Ziesenis Lynn Switanowski Georganne Bender & Rich Kizer Ken Countess Jennifer Shaheen & Tec Clark 2021 DEMA Annual Report | 47

EVALUATE STORE-RELATED BUSINESS BENCHMARKS FOR ASSISTING RETAILERS

Any business—brick and mortar, online or any configuration—needs to understand how their business compares to others in the same industry.

Obtaining and using valid benchmarks for the dive retail business is challenging because the business varies with geographic location, offerings for travel and product sales, and size of the store.

During 2021, the Retail Engagement Committee evaluated the concept of using financial and operational ratios as benchmark measures and working with a “Business Valuation” firm to obtain appropriate financial and operation data for comparisons. The advantages to using ratios are: • They explain the business operation in an anonymous way—the absolute measures are not available to competitors.

• Once understood, the ratios and percentages are an easy way to gauge the status of the business at a glance.

• They can easily be used to see how the business is evolving over time, presenting trends that are useful for management.

• When a statistically valid sample is used for comparisons, they provide guidance for individual businesses in the same size range, and same geographic region.

To ensure this data is anonymous, useful, and valid, DEMA proposed working with a firm that compiles objective third-party data pertaining to recreational dive stores. These data sources already record financial ratios and percentages which can be compared to existing dive retail operations, and include: • • • • • •

IRS Statistics of Income IRS SOI Corporation Tax Book IRS Sole Proprietorship Tables US Economic Census US Census Quarterly Financial Reports US Census County Business Patterns

48 | 2021 DEMA Annual Report

• Bureau of Labor Statistics Monthly Employment Reports • Bureau of Labor Statistics Monthly Unemployment Reports • Bureau of Labor Statistics Annual Wage Survey • Bureau of Labor Statistics Industry Productivity Reports • Bureau of Labor Statistics Price Indices • Bureau of Labor Statistics Consumer Price Index • National Agricultural Statistical Service • US Census Retail Trade Report • InfoGroup, Inc. • DealStats • American Community Survey

WHY BENCHMARKING DATA?

Benchmarking is the process of comparing one’s own organization, its operations, or processes against other organizations in the same industry, same region, or in the broader marketplace.

The intent of benchmarking is to compare one’s own operation to that of competitors (even in a general way) and to generate ideas for improving processes, approaches, and technologies to reduce costs, increase profits and strengthen customer loyalty and satisfaction. Benchmarking is an important component of continuous business improvement and quality initiatives.

The Committee recommends using diving retail financial reports to help retailers understand their company’s position relative to the financial performance of similar dive stores, in similar regions. The results can help operators and owners gain a better understanding of the industry in their own area along with their own business, and these data points can become an important part of the toolkit that helps to guide management decisions.

Example data that would be available in the program includes ratios and comparative measures for the following (Example numbers are for illustration only and are not actual measures):

DIVING EQUIPMENT & SUPPLIES STORES

RETAIL TRADE

Store Size: XXXXXX Firms included in analysis Region: XXXXXX

INCOME AND EXPENSE—PROFIT AND LOSS (%) Business Revenue Cost of Sales Cost of Sales—Labor Portion Gross Margin Officers Comp.

Salary-Wages Rent Taxes Paid Advertising Benefits-Pensions Repairs Bad Debt Sales, General, Admin & Misc.

EBITDA Amortization Depreciation Depletion Operating Expenses Operating Income Interest Income Interest Expense Other Income Pre-Tax Net Profit Income Tax After Tax Net Profit Discretionary Owner Earnings

2017 358

2017 100% 64.33% 0.51% 43.57% 6.35% 12.62% 4.71% 4.39% 2.45% 1.75% 0.67% 0.26% 7.90% 4.87% 0.44% 30.57% 5.00% 0.42% 0.24% 2.01% 2.49% 0.77% 1.82% 5.71%

2018 326

2018 100% 68.39% 0.72% 55.61% 3.35% 6.91% 4.70% 4.47% 5.50% 2.80% 079% 0.16% 12.08% 4.25% 0.91% 25.27% 6.34% 0.82% 0.90% 3.06% 1.82% 0.87% 2.25% 4.08%

2019 319

2019

2020 399

2020

100% 59.34% 0.22% 28.66% 1.49% 8.98% 4.05% 2.32% 4.89% 3.67% 0.61% 0.12% 17.26% 4.27% 1.60% 31.79% 4.87% 0.35% 1.38% 4.90% 4.94% 0.94% 1.50% 4.83%

100% 55.94% 0.40% 28.06% 7.53% 11.05% 4.13% 5.24% 3.90% 3.67% 0.81% 0.42% 16.35% 3.36% 2.41% 22.11% 7.95% 0.74% 2.07% 5.81% 3.94% 0.89% 1.99% 5.87%

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BALANCE SHEET (%)

2017

2018

2019

2020

Assets Cash Receivables Inventory Other Current Assets Total Current Assets Gross Fixed Assets Accumulation & Depreciation-Amortization—Depletion Net Fixed Assets Other Non-Current Assets Total Assets Liabilities

17.27% 3.81% 56.79% 1.61% 79.48% 24.48% 10.53% 13.95% 6.57% 100.00%

17.16% 3.96% 56.41% 1.65% 79.17% 66.14% 51.97% 14.17% 6.66% 100.00%

16.79% 4.37% 57.22% 1.55% 79.93% 62.97% 48.33% 14.64% 5.43% 100.00%

16.98% 4.43% 57.64% 1.58% 80.63% 60.82% 46.71% 14.11% 5.26% 100.00%

Accounts Payable Loans/Notes Payable Other Current Liabilities Total Current Liabilities Total Long-Term Liabilities Total Liabilities Net Worth Total Liabilities & Net Worth

21.38% 5.58% 5.93% 32.89% 21.86% 54.75% 45.25% 100.00%

20.67% 5.19% 5.61% 31.47% 22.19% 53.67% 46.33% 100.00%

20.48% 4.54% 5.96% 30.98% 22.17% 53.16% 46.84% 100.00%

20.15% 4.42% 6.35% 30.92% 22.43% 53.35% 46.65% 100.00%

FINANCIAL RATIOS: CASH FLOW-SOLVENCY

2017

Accounts Payable: Business Revenue Current Ratio Quick Ratio Days Payable Current Liabilities: Inventory Net Working Capital: Business Revenue Cost of Sales: Accounts Payable Cost of Sales: Inventory

FINANCIAL RATIOS: PROFITABILITY EBITDA: Business Revenue (%) Pre-Tax Return On Assets (%) Pre-Tax Return on Net Worth (%) Pre-Tax Return on Business Revenue (%) Discretionary Owner Earnings After-Tax Return On Assets (%) After-Tax Return On Net Worth (%) After-Tax Return On Business Revenue (%) Profit/Employee Owner Earnings/Employee

50 | 2021 DEMA Annual Report

2018 8.1 2.42 0.64 48.14 0.58 0.18 7.58 2.85

2017

8.43 2.52 0.67 50.11 0.56 0.19 7.28 2.67

2018 4.88 11.86 26.22 4.49 9.71 12.08 22.28 3.82

4.25 9.37 20.23 3.82 9.08 9.97 17.2 3.25

2019 9.29 2.58 0.68 55.29 0.54 0.22 6.6 2.36

2019 4.27 6.47 13.81 2.94 8.83 5.5 11.74 2.5

2020 9.53 2.61 0.69 56.13 0.54 0.24 6.5 2.27

2020 3.36 4.09 8.77 1.94 7.87 7.48 7.46 1.64

FINANCIAL RATIOS: EFFICIENCY

2017

2018

2019

2020

Assets: Business Revenue Days Inventory Days Receivables Current Asset Turnover Fixed Asset Turnover (Business Revenue/Fixed Assets) Gross Margin: Business Revenue Sales Per Employee

0.38 127.86 8.27 3.32 18.92 38.57

0.41 136.74 7.89 3.1 17.31 38.61

0.45 154.49 6.23 2.76 15.06 38.66

0.47 160.6 5.64 2.62 14.99 38.06

Inventory Turnover Receivables Turnover Total Asset Turnover Working Capital Turnover Days Working Capital Cash Turnover Efficiency Index

4.65 69.3 2.64 5.67 64.43 15.28 10.47

4.35 62.02 2.45 5.14 70.97 14.3 10.02

3.85 50.45 2.2 4.5 81.06 13.13 9.55

3.67 47.78 2.11 4.25 85.79 12.46 9.43

FINANCIAL RATIOS: DEBT-RISK Interest Coverage Current Liabilities: Net Worth Long-Term Liabilities: Net Worth Loans-Notes Payable/Net Worth Modified Z-Score Total Liabilities: Net Worth Fixed Assets: Net Worth

2017

2018 8.97 0.73 0.48 0.12 6.44 1.21 0.31

7.12 0.68 0.48 0.11 6.28 1.16 0.31

2019 3.94 0.66 0.47 0.1 7.17 1.13 0.31

2020 3.13 0.66 0.48 0.09 7.97 1.14 0.3

Proposed Regions: Diving retail is quite different from one geographic region to another, and the data should be reported by region. This would help to keep data anonymous when a minimal number of retail stores are reporting, and also help ensure that the data being reported is pertinent to the participating retail store. DEMA proposes using the REGIONS which are also used to compile the DEMA certification census.

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U.S. RETAIL REGIONS Pacific • Alaska • California • Hawaii • Oregon • Washington

East North Central • Illinois • Indiana • Michigan • Ohio • Wisconsin

Mountain • Arizona • Colorado • Idaho • Montana • Nevada • New Mexico • Utah • Wyoming

West South Central • Arkansas • Louisiana • Oklahoma • Texas

South Atlantic • Delaware • Florida • Georgia • North Carolina • South Carolina • Virginia/Maryland/D.C. • West Virginia

Middle Atlantic • New Jersey • New York • Pennsylvania

West North Central • Iowa • Kansas • Minnesota • Missouri • Nebraska • North Dakota • South Dakota New England • Connecticut • Maine • Massachusetts • New Hampshire • Rhode Island • Vermont East South Central • Alabama • Kentucky • Mississippi • Tennessee

While this is new data for the diving industry, DEMA anticipates including the use of benchmarks in professional development programs to assist in understanding the information. The Retailer Engagement Committee continues to evaluate these areas and provide guidance and recommendations to the DEMA Board for DEMA Show and for the assisting the retail membership. ■

52 | 2021 DEMA Annual Report

2021 DEMA Annual Report | 53

DEMA RESEARCH ASSETS DEMA’s research role includes providing Members with pertinent industry data that helps their businesses. Providing market and Industry research is critical for all trade associations, and DEMA views this responsibility as a central part of the association’s activities.

At the heart of “marketing” is the understanding of the dive customer, how to communicate with them, and knowing which message will generate the greatest response in a costeffective manner. DEMA participates in several ongoing research projects, and post COVID hopes to continue providing customized data for DEMA Members to use. All members of the diving community can benefit from DEMA’s large-scale research information.

Most everyone in the diving industry has an idea of their own customers; retailers see who walk into the store and purchases the equipment 54 | 2021 DEMA Annual Report

and training they sell; manufacturers have a good understanding of who purchases their products through warranty registrations and information from their retail dealers; training organizations can easily check their own certification information for demographic details, places where their customers live, and more. The question for the Industry and for DEMA is how to pull all this information together to enable growth. Having marketing data from all sources in the diving industry, including data from actual divers is critical, but only if it translates into marketing action that helps members.

DEMA continues to provide research data in several areas, including • The U.S. Open Water Diver Certification Census • Market Research on the Diving Consumer • Localized Retail Store-Level Research

OPEN WATER DIVER CERTIFICATION CENSUS

Thanks to the three participating certification organizations, data on the number of new diver certifications in the U.S. and Caribbean has been readily available to the Industry each year since 2003. The Certification Census includes data exclusively on U.S.-based Open Water-level diver certifications (as defined by the Recreational Scuba Training Council [RSTC]). This statistic is a measure of growth for the Industry and is indicative of the health of the sport in the U.S. All DEMA-Member training organizations are invited to participate, although not all did in 2021. The three participating certification organizations for 2021 are NAUI, SDI/TDI and PADI. Taken together, these organizations represent a majority of certifications issued in the U.S. and Caribbean market.

from each reporting training organization. The process is designed to make the Certification Census totally anonymous with regard to the new diver’s training organization affiliation and to produce an accurate accounting of the total Open Water divers from within the U.S. and Caribbean.

Neither the DEMA Office nor members of the DEMA Board have access to individual training organization totals, only the aggregate total. Upto-date certification census data is available to the Diving Industry at www.dema.org and important state-by-state data is available to DEMA Members.

DIVE MARKET RESEARCH: U.S. AND INTERNATIONAL DIVER BEHAVIORAL STUDY

In 2020, working in close collaboration with Board member and Vice Chair William Cline, DEMA updated the historic 2014 Diver The cooperative effort between all participating Behavioral Study, yielding more than 9,700 certification organizations includes providing their responses from more than 130 countries. certification information to an independent, thirdparty auditing firm. Open Water certification The pre-pandemic study is great benchmarking numbers are reported by the third-party data and covers diver behavior in such administrator (TPA) to the Industry in aggregate areas as dive travel, local diving, equipment total, only after the TPA does a thorough review of purchases and diver training. Survey results the data, removes any duplicated customer records are available for divers from all responding that appear across or from within agencies, and countries, the U.S. Market, and Canada. receives written verification of the final numbers DEMA-Member companies assisted in the outreach for this study by providing their own customers with a customized web survey link tied back to their own company. Surveys were distributed and collected by a third-party administrator (TPA), and the Member company’s survey responses were provided back to the Member for review. So, while the aggregate data was compiled and reported to DEMA by the TPA, the individual DEMA-Member company received responses from their own customers, allowing them to compare their customer’s data to the Industry-wide aggregate.

Of the more than 9,700 divers responded to this survey, almost 1,000 came from Canada, 2021 DEMA Annual Report | 55

almost 5,000 from the US, and the remainder from 130+ countries across the globe. The survey requests activity information from respondents through 2019 and into the first quarter of 2020, and as such does not reflect the full impact of the COVID-19 Pandemic.

LOCALIZED RETAIL STORE-LEVEL RESEARCH

For a variety of marketing programs in most consumer industries, the place to begin is in understanding the current customer, their buying habits, and their values. DEMA has conducted studies of these parameters at a national level in the U.S. and internationally, but diving consumers are diverse, and each geographic region is different in terms of diving season, equipment and training needs, and the people that participate.

56 | 2021 DEMA Annual Report

Location, location, location: Even with a growing online sales and training presence in the diving industry, accelerated by the COVID-19 pandemic, a critical component of the success of any brick-and-mortar specialty retail business is where the store is located.

The physical dive store remains the center of attention for components of dive instruction and equipment purchases, especially where proper fit is critical. Even more important is the need for retailers in the diving industry to connect with customers; research shows that consumers who become certified through their local, physical dive center have more diving friends, stay active in diving longer, and buy more dive equipment and dive travel.

The physical location of a brick-and-mortar dive center also plays an important role in the image the dive center portrays, the type of

customers attracted, and ultimately the success of the business. It is extremely helpful to know some basic details about store location in an existing store, as the economic conditions in a given geographic area can change from year to year. In fact, one recent and revealing study of changing neighborhoods conducted by DEMA indicated it was possible for a dive center to track the evolution of their local neighborhood from year to year and learn how these changes can be used to broaden the store’s approach to local promotions as neighborhood households evolved. The latest studies also indicate that more than 70% of a store’s customer base lives within 45 minutes of the store location.

DEMA strongly urges all dive businesses to use the research tools DEMA provides to gain a better understanding of their customer. ■

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INTERNATIONAL MEMBERSHIP COMMITTEE

CRAIG LEES, CHAIR

DEMA’s Mission is “Bringing businesses together to grow the Diving Industry worldwide.” With aspirations to serve the diving industry worldwide, in 2021 DEMA embarked on an analysis of the association’s current international diving industry presence, and whether a strategy to expand this international growth was appropriate.

To assist with this analysis effort DEMA formed a volunteer Committee consisting of Terry Cummins, Terry Cummins International Business Consulting; Craig Lees, Suunto (Chair); Dan Orr, Dan Orr Consulting; Peter Symes, X-Ray Dive Magazine; and Steve Weaver, Weaver Dive and Travel.

In this Committee’s inaugural year, the first steps have included determining the outcomes desired from this Committee analysis and effort. These desired outcomes include increasing the number of international members and, importantly, 58 | 2021 DEMA Annual Report

increasing member engagement internationally.

DEMA’s data confirms that the international dive community has been mostly interested in the benefits of attending and exhibiting during DEMA Show. Recent issues with COVID have helped to confirm that assumption. However, DEMA offers many additional benefits that are valuable to those internationally, of which some members are aware. Part of this Committee’s work will be to determine how to help engage more international diving companies, and how to better communicate with this important segment of the industry.

Any analysis of this begins with looking at DEMA’s current position in the international market. The following are part of the Committee’s current review: • DEMA’s international membership is about 20% of overall membership.

• DEMA Show exhibitors consist of about 25% international companies.

• Promotional and Marketing Services and Products that can be used anywhere in the world

• Many current U.S.-based DEMA Show exhibitors are highly interested in selling to • Sponsorships that provide business exposure the international attendees. With international to the U.S. and international market travel restrictions during COVID, international • DEMA Show – connecting with the U.S. attendee numbers were reduced. dive market as buyers and sellers.

• Many international members purchase • Engagement and Networking (Committees, DEMA’s U.S. dive industry research, but many Board, Research Opportunities, DEMA Awards more attend or exhibit at DEMA Show. and Exhibitor Parties, and DEMA Show itself).

• Many international members are interested in gaining a foothold in the U.S. market.

DEMA currently offers a variety of benefits, some of which are important to international members: • Professional Development, including marketing, sales and operational education • Research on the U.S. and international market • Public Policy efforts that occur in the U.S. and elsewhere, and impact the wider industry

During 2021 Q4 the Committee will reach out to Members to discuss how best to support the international effort and additional Member recruitment.

As this Committee continues its work in the coming year, it will make recommendations to the DEMA Board about these and other benefits that can help serve the international diving community. ■

2021 DEMA Annual Report | 59

The Diving Equipment & Marketing Association Phone: (858) 616-6408 | Toll Free: (800) 862-DIVE | Fax: (858) 616-6495 info@dema.org | DEMA.org | DEMAShow.com | GoDiveNow.com