2023 DEMA Annual Report by DEMA.org

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Bringing Businesses Together to Grow the Diving Industry Worldwide

TABLE OF CONTENTS What is DEMA? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Member Engagement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 DEMA Member Rewards Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Finance Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Nominations Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 DEMA Show Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Manufacturers’ Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Public Policy Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Go Dive Now Consumer Marketing Campaign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Retail Engagement Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 DEMA Research Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 International Membership Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 2023 Diving Community Champion Awards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 2023 Wave Makers Award. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

WHAT IS DEMA? The Diving Equipment and Marketing Association is a non-profit trade association. More than that, DEMA is a community of professionals often working together and sharing what they know. 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 more difficult since COVID-19. DEMA continues to seek out ways to make it possible for Industry 4

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participants to collaborate with the Association and with each other, and to be successful. Most of all, DEMA is a community of diving professionals who share a similar goal – to come together to grow the diving industry worldwide.

DESCRIPTION

Worldwide trade association for the recreational diving and snorkeling industries; Includes more than 1,100 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 entrylevel 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 2023 DEMA BOARD OF DIRECTORS A1-Manufacturing

A2-Diver Certification and Training Agencies

• Mike Hollis, Pro Asia

• Tom Leaird, Scuba Educators International

• Tom Phillipp, XS Scuba, Inc.

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

Jeff Mondle, PADI Americas A4-Retailers

• Jeffrey Cinciripino, Scuba Shack Diving Services

• William Cline, Cline Group Advertising

• Patrick Hammer, Dive Right In Scuba, Inc.

• Dan Orr, Dan Orr Consulting

A5-Travel & Resorts • Bradley Barnett, Clearly Cayman Dive Resorts • Steve Weaver, Dream Weaver Travel

2023 BOARD/STANDING COMMITTEES (CHAIRED BY MEMBERS SERVING ON THE DEMA BOARD) Executive Committee

Finance Committee

Manufacturing Committee

• Dan Orr, Chair

• Bradley Barnett, Chair

• Mike Hollis, Chair

• Patrick Hammer, Senior Vice Chair • William Cline, Vice Chair • Bradley Barnett, Treasurer/Secretary

• Tom Leaird

• Tom Phillipp

• Tim Webb • Mike Hollis

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. ■ 6

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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, people 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, during these difficult times, the Recreational Diving Industry needs to work together 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 diving stakeholder group, or vendor can bring businesses together to grow the diving industry and solve the issues that the industry faces. As a non-profit trade association, DEMA’s mission is to bring the various business stakeholders together to grow the Diving 8

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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. • 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: • A1 - Manufacturers and Distributors of Diving Equipment, including Manufacturing Reps • A2 - Diver Certification and Training Agencies • A3 - Diving Publications, Media, Diving Industry Consultants, Associations and Nonretail Service Providers • A4 - Retail Distribution of Diving Goods and Services • A5 - Dive Travel and Resorts • B - 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.

2023 DEMA REWARDS PROGRAM

DEMA implemented its new Rewards Program that will reward Members for their engagement

with the other DEMA Members and the Association. The new “DEMA Rewards” program makes it even more beneficial to be a DEMA Member with rewards that can be exchanged for future Membership discounts, merchandise, and even high-visibility sponsorships. The DEMA Board of Directors recognizes the value of “engagement” and the need to help Members connect with one another through the Association. Under the DEMA Rewards Program, DEMA Members can participate in the Association’s programs and earn rewards points which can be exchanged for valuable assets. More information on this program can be found in this Annual Report, and here.

COMMUNITY BUILDING THROUGH NETWORKING AND COMMUNICATION

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, as a result of the worldwide pandemic, 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. During DEMA Show the DEMA Association sponsors professional development on a variety of topics, but just as important are the chances to learn face-to-face from other companies in the industry; those who exhibit and provide professional education directly related to their own products and services. 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. 2023 DEMA Annual Report

MEMBERS HELPING MEMBERS

One thing we have learned over the past couple years is that community and learning to lean on one another is incredibly important during trying times. With the help of its members, DEMA helps the victims of catastrophic storms and other occurrences with the DEMA Disaster Assistance Program; “Members Helping Members,” building a bridge of assistance for those affected by these disasters while permanent aid is being requested from the appropriate government, private or public agencies. The MEMBERS HELPING MEMBERS Program may provide any or all of three types of *Disaster Assistance: 1. Member to Member Assistance: DEMA Member companies will be asked to provide a direct link of assistance to those in affected areas. Manufacturers and other travel and service provider companies will have a direct assistance line to accommodate companies that need help recouping from such a tragic event to help get their feet back on the ground. 10

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2. Exhibitor Assistance: Designed for companies exhibiting at the DEMA Show, each company involved and from specific affected regions may apply for funds to help them get to the trade show, where promotional opportunities can help them get back into operation. Affected companies will apply for the assistance funds through the DEMA office, and funds will be awarded to companies exhibiting at the show. 3. Attendee Assistance Program: Designed for Registered DEMA Show Buyers who are staying in the DEMA block of hotel rooms, attendees can receive a complimentary onenight hotel stay (base rate only. Does not include Tax and Service Fees). When available, this program is limited to one buyer from each retail store and for reservations made within DEMA’s hotel block. Attendees from affected retail stores will have two weeks to submit receipts following the show for reimbursement. *In general, a “Disaster” will be defined as any event that is declared such by an involved government entity. Applications for assistance will be reviewed on a case-by-case basis.

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 2023 can be readily seen in the pages of this Annual Report. Using virtual and in person meetings, many divers and diving professionals came together again this year to help advocate for the diving community 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 directly 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 protected and accessible to the diving community.

MEMBER RESEARCH DRIVES DEMA PROGRAMS—DIVING COMMUNITY CHAMPIONS

Listening to the needs of Members is critical for the success of the industry and for DEMA. DEMA’s own member-level research helps to establish programs and provides more engagement opportunities. In surveys DEMA Members have indicated their desire for DEMA to “Represent the field of recreational diving to the public.” This desired benefit shows up consistently in the top five most desired benefits when members are surveyed, even when members are segmented by time in the industry, experience, and other factors. The Diving Community Champions Award recognizes DEMA Member Companies who are utilizing recreational diving to help advance society and their communities and who make 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?

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. Pictured: 2021 Diving Community Champion Recipients

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• How did the activity or project positively impact the DEMA Member business’ communities or society? All sizes and scopes of projects and activities are eligible, but the program should command appropriate resources to have the greatest possible reach; the size of the DEMA Member Company is considered when reviewing this criterion. Positively Showcasing Recreational Diving to the General Public

• Terry Cummins, TC-IBC Consulting • Jenny Collister, Reef and Rainforest Travel • Cassandra Johnson, Breezeway Bubbles Scuba • Dan Orr, Dan Orr Consulting. • Arlindo Serrao, Portugal Dive • Peter Symes (Chair), X-Ray Magazine • Steve Weaver, Dream Weaver Travel

• Does the program or project utilize recreational diving to demonstrate diving’s significant contribution to the general public?

PUBLIC POLICY

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

• Patrick Danko, Garmin • Jim Gunderson, Scuba Educators International

Realizing Objectives and Outcomes

• Al Hornsby, Professional Association of Diving Instructors

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 selects the five finalists who are then voted upon by the DEMA membership.

• Tom Leaird, Scuba Educators International • Jeff Nadler, Professional Association of Diving Instructors • Dan Orr (Chair), Dan Orr Consulting • Carlos Santana, Hawaiian Islands Recreational Scuba Association

More information on Diving Community Champions can be found in this Annual Report and here.

RESEARCH

THANK YOU TO OUR VOLUNTEERS!

• Ben Collins, Garmin

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 15th at 8:30 AM Eastern 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.

INTERNATIONAL MEMBERSHIP

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• William Cline (Chair), Cline Group Marketing • JoAnn Haack, Diver’s Alert Network • Shelli Hendricks, Blue Horizons Solutions • Lily Mak, Enchanted Sea Images • Jeff Mondle, Professional Association of Diving Instructors • David Prichard, Enchanted Sea Images, Inc. • Christine Tamburri, Diver’s Alert Network • Jeff Tennant, Buckeye Dive Club

RETAILER ENGAGEMENT

NOMINATIONS

• Jeff Cinciripino, Scuba Shack Diving Services

• William Cline, Cline Group Advertising

• Merial Currer (Chair), Patriot Scuba

• Tom Leaird, Scuba Educators International

• Patrick Hammer, Dive Right In Scuba

• Tom Phillipp, XS Scuba and Sea Pearls (Chair)

• Robin Bostater, Kaizen Scuba

• Rich Thomas, International Scuba

SHOW COMMITTEE

• Jeff Cinciripino, Scuba Shack Diving Services • Bill Cole, Sea Experience • Jenny Collister (Chair), Reef and Rainforest • Merial Currer, Patriot Scuba • Lily Mak, Enchanted Sea Images • Richard Thomas, International Scuba

• Jeff Cinciripino, Scuba Shack Diving Services

• Steve Weaver, Dream Weaver Travel.

FINANCE

• Brad Barnett (Board Treasurer, Chair), Clearly Cayman Dive Resorts • Mike Hollis, Pro Asia • Tom Leaird, Scuba Educators International • Tim Webb, Caradonna Dive Adventures

• Tim Webb, Caradonna Dive Adventures

EXECUTIVE COMMITTEE

MANUFACTURING

• Mike Hollis (Chair), Pro Asia

• Patrick Hammer, Dive Right In Scuba, Senior Vice Chair

• Tom Phillipp, XS Scuba and Sea Pearls

• William Cline, Cline Group Advertising, Vice Chair

• Dan Orr, Dan Orr Consulting, Chair

• Bradley Barnett, Clearly Cayman Dive Resorts, Secretary/Treasurer ■

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DEMA MEMBER REWARDS PROGRAM DEMA launched the new DEMA Rewards Program at the start of 2023, rewarding Members for their engagement with the Association and other DEMA Members. The program makes it even more beneficial to be a DEMA Member with rewards that can be exchanged for future Membership discounts, merchandise, and even high-visibility sponsorships. The DEMA Board of Directors recognizes the value of “engagement” and the need to help Members connect with one another through the Association. Under the DEMA Rewards Program, DEMA Members can earn rewards points while participating in the Association’s programs including:

EXHIBITING

• Exhibiting at DEMA Show • Staying in the DEMA Hotel Block • Sponsoring at DEMA Show • Speaking at an Exhibitor-Sponsored Seminar • Attending Member Meeting

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ATTENDING DEMA SHOW

• Staying in the DEMA Hotel Block • Attending in-person DEMASponsored Education • Registering more than one person for the Show • Attending Member Meeting

VOLUNTEERING

• Serving on the Board of Directors • Serving on a Committee or Task Force • Micro-volunteering service

ASSOCIATION PARTICIPATION • Public Policy efforts

• Association research contributions • Voting in DEMA Elections and Awards • Contributing information to DEMA’s surveys and other activities

MEMBERSHIP

• Early annual renewal (must pay dues by 3/31) • Using DEMA’s benefits – such as DEMA’s industry research or other items • Provide secondary contact information in your Member Profile

Any DEMA Member company can earn up to 100 total DEMA Rewards points for the calendar/membership year. You can earn points right away for some activities (e.g., membership renewal or voting), while other activities may be valued higher and require additional time and effort to complete (e.g., Committee and Board

service). When points are earned, DEMA inputs them to your Membership record so that you can redeem them. All points must be redeemed by June 30 of the following calendar year (company must be a current member at the time of redemption). After June 30th of the following calendar year the Rewards Points expire. DEMA thanks all Members for their participation and encourages all companies to engage with our diving community for the benefit of your business and the industry. For complete details about the program visit www.dema.org. ■

2023 DEMA Annual Report

FINANCE COMMITTEE

BRADLEY BARNETT, CHAIR (BOARD TREASURER)

The Finance Committee provides oversight to all budgetary activities of the Association, approves the budget for the fiscal year, and reviews the 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 an annual review of all financial activities of the Association, as well as periodic evaluations of financial data. The association’s financials are available on www.dema.org for member review.

GIVING BACK TO THE INDUSTRY

One of the most important objectives of the Association is the opportunity to place money back into the diving industry for business purposes. Since January 2003, DEMA has carefully placed money into successful promotions and other business-related efforts that were then 16

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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: 1. Projects are under direct control of DEMA Board

2. Project costs can be more easily evaluated and controlled

3. Project success can be more easily and accurately measured 4. Compliance with anti-trust regulations can be more easily monitored 5. Compliance with association objectives and corporate standards can be more easily monitored 6. 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: 1. Projects are NOT under direct control of DEMA Board or staff. For this reason, additional information is required before approval of funding. 2. DEMA sets limits on funding to prevent cost overruns and expects periodic reports from the project management team. 3. Clear objectives and evaluation measures must be provided by the team managing the project prior to funding. 4. 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. 5. Project proposals are reviewed by DEMA counsel prior to approval. 6. DEMA must be indemnified against losses, injuries, violations of anti-trust regulations and laws, and other issues appropriate to the project in question. 7. Projects must DIRECTLY benefit the diving industry overall. 8. Consideration should be given to DEMA

member companies when appropriate. 9. Adequate liability insurance naming DEMA, staff and directors is required and should be incorporated into any funding agreement as appropriate. 10. Approved project funds can only be dispersed after a written agreement is executed. Projects not directly managed by DEMA require evaluation by DEMA staff and, in some cases, may require evaluation by outside sources. Such evaluation by outside sources may involve additional cost to the team proposing the project prior to recommendations being given to the Board and prior to the necessary Board approval.

DEMA ANNUAL FINANCIAL REPORT

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 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. 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 Santo Road, Suite 190, San Diego, CA 92124. In 2023, DEMA engaged in no transactions which involved more than $50,000, or aggregating more than $50,000, with the same person, and in which any director or officer of DEMA or any holder of more than 10% of the voting power of DEMA had a direct or indirect financial interest. In 2023, DEMA paid no loans, guaranties, indemnifications, or advances to any officer or director of DEMA. ■ 2023 DEMA Annual Report

NOMINATIONS COMMITTEE

TOM PHILLIPP, CHAIR

The job of the DEMA Board Nominations Committee is to research qualified industry professionals who may be interested in serving on the DEMA Board of Directors and recommend them as Board Candidates for election by the DEMA Membership. By researching and recommending qualified and competent individuals, the Nominations Committee is helping to bring the best in leadership and governance to the association. The DEMA Bylaws indicate that the designated representative of any Regular Class A Member company in good standing has the right to hold a seat on the DEMA Board of Directors. The task of the Nominations Committee is to find the best Applicants and Candidates for Board service. A Nominations Committee that researches and recommends the most qualified Applicants and Candidates will help ensure that the association is well-governed and well-lead. 18

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DEMA’s Nominations Committee is comprised of five (5) members of the current DEMA Board of Directors. Specifically, the five Committee members are those current Board members whose terms are not expiring in the election year being considered. Additional Committee members can be chosen from among Board members who are not running for re-election as well as from the voting delegates of the DEMA membership, but all Committee members must be from DEMA Member companies renewed for the current year. The Nominations Committee for 2023 included Jeff Cinciripino, Scuba Shack Diving Services; William Cline, Cline Group Advertising; Tom Leaird, Scuba Educators International; Tom Phillipp, XS Scuba and Sea Pearls (Chair); and Steve Weaver, Dream Weaver Travel. Definitions: • Applicant: An individual expressing interest in running for the DEMA Board,

who has also completed the requirements for consideration by the Nominations Committee. Individuals under consideration are reviewed on a variety of topics, among them qualifications, interest, current membership, availability, and commitment for Board service. Applicants receive a questionnaire from the Nominations Committee and are evaluated using the criteria expressed in this document. • Candidate: Individuals who have met the criteria for Board Applicant and who are recommended by this Committee to the current DEMA Board for further consideration. • Nominees: Candidates who have completed all requirements and are approved by the DEMA Board to participate in the competitive Board election process.

WHAT DOES THIS COMMITTEE DO?

The Nominations Committee has two primary tasks:

1. Search for and recommend qualified Applicants as potential Candidates. 2. Ensure that administrative requirements are met when bringing Board Nominees to the DEMA Membership for their voting consideration.

RECOMMENDATION OF APPLICANTS AS POTENTIAL CANDIDATES

This Committee develops a list of Applicants by: • Researching individuals who may be qualified and competent to serve.

Board for consideration as Candidates. The Committee’s recommendations are determined by simple majority-ofcommittee vote. The Chair of the Committee votes on recommendations for Board consideration only to break a tie vote. • When the committee recommends that Applicants become Candidates, the Nominations Committee has completed the search and recommendation process with which it is charged.

MEETING ADMINISTRATIVE REQUIREMENTS

The Nominations Committee also ensures the requirements as set forth in the DEMA Bylaws for Applicants and eventually for Board Candidates and Nominees. The Nominations Committee delegates this work to the DEMA Staff who generally manages this process and reports progress and completion to the Committee.

DETERMINING APPLICANTS FOR BOARD SERVICE

Serving on the DEMA Board requires competency in leadership and the ability to govern – skills that reach far beyond the DEMA bylaws requirement that potential Candidates must fall into a specific diving industry stakeholder group to serve. The competency to serve is the deciding factor as the Nominations Committee considers recommending an Applicant to the DEMA Board. Committee members review the following questions about potential Applicant recommendations:

• Reviewing these individuals’ qualifications for Board service and determining the individual’s interest in Board service.

• Does a potential Applicant have basic leadership skills (not an ability to manage, but to lead)?

• Following a thorough review, using a Committee voting process, recommending qualified Applicants to the current DEMA

• Does the Applicant have at least a three-to-fiveyear horizon in their thinking?

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• Can the Applicant guide the association into the future? • Can the Applicant effectively direct DEMA’s resources to achieve its goals and objectives? • Does the Applicant have the ability to inspire and empower others? • Can the Applicant build teamwork among peers with different needs and interests? • Can the Applicant demonstrate their leadership abilities, not just articulate them? • What has the Applicant done to show that they can move people and the organization in the right direction? • What examples can the Applicant give where they have been able to cultivate productive teamwork? • In what instances has the Applicant skillfully and creatively directed resources to accomplish objectives? • Can the Applicant maintain the Board and organization’s requirement of confidentiality?

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In addition to competency in leadership, the Applicant should have a track record of performing in a “governance” capacity: • Does the Applicant know what it means to govern? • Does the Applicant understand the duties and functions of a board and the role of a director for DEMA? • Does the Applicant know the duties of care and loyalty, and exercise independent, but respectful, judgement? Can they give examples of how they have exercised these duties? • Does the Applicant understand that “governing” is much more difficult than “managing?” • Can the Applicant demonstrate how they have governed appropriately and effectively in the past? • Can the Applicant provide specific instances where they have been able to elevate their peers from micromanaging to governance? • What has the Applicant done to show

that they can make judgements in the interests of the entire DEMA membership and deal with conflicting interests? • Is the Applicant aware of the three-tofive major issues impacting the diving industry in the immediate future? The DEMA Elections process is an important one, requiring that the Nominations Committee, Applicants, Candidates and Nominees consider the ramifications for DEMA and the for the diving industry. This year’s Nominations Committee has been successful in selecting Candidates for Board recommendation and is pleased to announce the following slate for the 2024-2026 DEMA Board of Directors election: Category A1 – Manufacturers, Distributors and Affiliated Field/Sales Representatives: • Patrick Danko, Garmin • Mike Hollis, PROASIA Design Co, Ltd. (Incumbent) • Jason Leggatt, Shearwater Research Inc.

Category A2 – Diver Certification and Training Agencies, and Affiliated Field/Sales Representative: • Jeff Mondle, PADI Americas (Incumbent) Category A3 – Dive Publishing, Media, Dive Industry Consulting, Associations & Non-Retail Service Providers: • Jerry Beaty, Dive Training Magazine • Jeffrey Bozanic, Next Generation Services • Dan Orr, Dan Orr Consulting (Incumbent) Category A4 – Retail Distribution of Diving Goods & Services: • Allison Fontaine-Trainor, Scuba Trainors, LLC dba Dive On It Scuba • Richard Thomas, International Scuba Category A5 – Dive Travel Provider or Resort: • Jason Belport, Clearly Cayman Resorts • Shana Phelan, Pura Vida Divers LLC

The election is scheduled to begin during DEMA Show 2023!■

2023 DEMA Annual Report

DEMA SHOW COMMITTEE

JENNY COLLISTER, CHAIR

DEMA SHOW 2023: NOVEMBER 14-17, IN NEW ORLEANS, LA

DEMA Show is returning to New Orleans for the first time since 2001! We are excited for the Show’s return to The Big Easy and based on the statistics so are you. As of this writing Attendee and Buyer registration are outpacing DEMA Show 2022 by 61% and are even trending ahead of pre-pandemic numbers!

The 2023 DEMA Show Committee consists of DEMA Members with an interest, experience, and an understanding of trade shows and the needs of exhibitors and attendees. The 2023 DEMA Show Committee included: Jenny Collister (Chair), Reef and Rainforest; Jeff Cinciripino, Scuba Shack Diving Services; Bill Cole, Sea Experience; Merial Currer, Patriot Scuba; Lily Mak, Enchanted Sea Images; Richard Thomas, International Scuba; and Tim Webb, Caradonna Dive Adventures. 22

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Committee noted that 77% indicated they did purchase onsite and 88% plan to purchase in the next 12 months. • First DEMA Show – The Committee noted a substantial increase in first-timer attendees – 42.3% compared to an average of 30.5%. • How Many Staff Members Did You Bring? – the largest increases were seen in bringing 3 staff or 7-9 staff while there was a substantial decrease in those bringing only one staff member. More than 51% indicated bringing more staff to the show, and more than double the number brought three NEW staff members. • Main Influences in Attending – Following the pandemic, engagement/ networking ranked highest.

This committee is responsible for evaluating data from attendee and exhibitor surveys, assisting with the core artwork used for promoting DEMA Show, and evaluating various elements of the Show based on exhibitor and attendee feedback. When needed, this committee also participates in the selection of DEMA Show venues and making decisions on various areas of show management such as registration categories and processes.

UNDERSTANDING DEMA SHOW ATTENDEES AND EXHIBITORS

The committee spent a great deal of time reviewing feedback from attendees and exhibitors with the goal of improving the Show for all. When comparing DEMA Show 2022 survey data to DEMA Shows staged in 2016-2021 some notable items included: DEMA Show 2022: Attendee Data • Age Range – Reduction in older attendees but a substantial increase in those 25-34 and 35-44. • Did your Company Purchase? – The

• Preferred Method of Receiving Information about DEMA Show – Most prefer email or the DEMA Show/DEMA Association website. A substantial number also prefer social media sites such as Facebook. • Primary Job Function ӹ The largest single category is Owner/CEO at more than 25% ӹ About 20% of attendees are registered as Retail or Travel Buyers ӹ 10.6% of attendees were Corporate Management compared to an average of 3.8% ӹ 16.0% were Instructors/Dive Masters/Dive Cons compared to an average of 24.5% • Primary Objectives – Among the top ranked reasons for attending DEMA Show and visiting the exhibit floor included: Seeing new products and the latest innovations in the industry, Evaluating products and services to buy later, Comparing products from different companies, Seeking out new industry contacts and products, and Establishing relationships with vendors. • Role in Purchase Decisions – 62% had Final Say or could Specify the products 2023 DEMA Annual Report

the retailer would purchase, which is comparable to previous shows . • Reasons Decided to Attend – Networking, to purchase products or purchase travel, and to see demonstrations of products ranked highest.

DEMA SHOW 2022: EXHIBITOR DATA

• Did You Focus on Sales? – Only 25% of exhibitors indicated they focused on sales but 50% indicated they were successful in selling. 58.3% indicated they introduced new products/services at the 2022 Show and more than 70% indicated they ran at least one DEMA Show special. • Marketing Tactics used by Exhibitors – More than 60% distributed an advance promotion piece and there was a substantial increase in the number of exhibitors using an expanded company listing on the DEMA Show website, as well as an increase in advertising their DEMA Show Special on www.demashow. com. There was a substantial decrease in the number of exhibitors advertising in industry publications, but more than double the exhibitors used a lead retrieval service at their exhibit, compared to the average of shows from 2016-2021. • Number of Shows Exhibiting – First time exhibitors jumped from an average of 12.2% from 2016-2021 to more than 27% in 2022. Those exhibiting for 2 to 5 years also increased. • Social Media – Facebook and Instagram remain the most used social media. • What were Your Objectives in Exhibiting? – The top five in both objective and success (in slightly different ranking order) were:

After their thorough review and discussion of the data the committee generated ideas to help improve future DEMA Shows, including: Exhibitors • Create a guide for how to set up a show exhibit. – “How to be successful.” • Assist exhibitors in getting appointments. • Conduct interviews of DEMA Show exhibitors who are coming to DEMA Show. • Exhibitors want to sell to decisionmakers so the value of the Buyer badge designation should be described/ explained in detail ad emphasized. • Encourage exhibitors to use a variety (mix) of marketing channels to promote their Show plans. Attendees • DEMA should help dive centers promote that they are coming to the show – e.g., “We’ll be there.” Consider recording messages from Store Buyers with a message that they will be coming to the Show and include what they are looking for.

ӹ Market existing products/services ӹ Meet with existing customers

Additional DEMA Promotional Ideas

ӹ Enhancing corporate image

• Use dive store and DEMA social media to let exhibitors know WHY the store is attending… are they there to order, to buy products, see demonstrations, etc.? Stores will need info on

ӹ Introduce new products and services • Which Stakeholders are Important to |

FUTURE SHOW IDEAS

• Guide for attendees regarding how to be successful at the show – how to manage staff so that the most value is obtained from attending (delegate to different staff to go to seminars, make purchases, review new products, etc.).

ӹ Attract new customers

Reach? – The number one important stakeholder in 2022 was the Retail Buyer, and Exhibitors ranked their ability to reach the Retail Buyer as number 2. Exhibitors had the greatest success reaching Dive Resort Operators although these were initially ranked as number 4 in importance.

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how to link to DEMA Show social media. • Attendees should consider contacting their end-user customers and asking them what they want for new products from DEMA Show. This will provide a “shopping list” for the attendee to order or purchase onsite (travel and equipment).

DEMA SHOW 2024 CREATIVE

Committee members provided detailed feedback to help assist with the development of the DEMA Show 2024 creative direction for marketing and onsite design.

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. Because DEMA Show is one of the largest trade shows in the United States, 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 average 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 convention 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 up to 10,000 attendees. Hotel facilities should accommodate a minimum of 1,000 to 1,200 rooms peak night pick up, with 3,000 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.

SUSTAINABILITY AND DEMA SHOW

DEMA continues to select convention facilities that help ensure DEMA Show is a sustainable event.

Contracting with the Ernest N. Morial Convention Center in New Orleans, the Orange County Convention Center (OCCC) in Orlando and the Las Vegas Convention Center is purposeful in that these convention facilities are diligent in their efforts to reduce waste and negative environmental impact. The Ernest N. Morial Convention Center team is committed to reducing environmental impacts. Current efforts include: • RECYCLING: Recycling is provided for attendees in the front of house area and is available in the exhibit space by request. Dedicated areas for cardboard and pallets recycling are provided for exhibitors in the back of house. Over 250,000 lbs. of material was diverted from landfills through the facility’s recycling programs in 2019 alone. 2023 DEMA Annual Report

• ENERGY USE: The facility works to minimize their energy use on a regular basis through practices such as BAS scheduling, reducing light and HVAC requirements for nonoccupied spaces and turning off escalators in unoccupied areas. Additionally, over 5,000 light fixtures have been upgraded to LED. All Exhibit Hall lighting was upgraded to LEDs in 2021. Combined with other major energy upgrades, the facility anticipates an energy reduction of 10-15%. • FOOD DONATIONS: Food donations are made to local partners, such as Bethel Colony, coordinated by Centerplate. Over 64,000 lbs. of food were donated to Bethel Colony in 2019, benefiting both their residents as well as other organizations in the community. An additional 52,000 lbs. of food were donated by Exhibitors to Second Harvest Food Bank. The Center also turned 24,000 lbs. of grease into biofuels. • WATER: Water bottle filling stations were installed in the Convention Center lobbies and next to all bathrooms – more than 60 in total! The new seven-acre Pedestrian Park outside the facility manages storm water in rain gardens planted with native Louisiana wetland plants. Water coolers and pitchers are available to replace bottled water.

2023 DEMA Annual Report

• COMPOSTING: The Center’s food service provider practices composting in the back of house and employee cafeteria. Most of the food-ware is made of biodegradable materials.

DEMA SHOW NAMED IN TRADE SHOW EXECUTIVE’S FASTEST 50

DEMA Show 2022 was recognized by Trade Show Executive as one of the “Fastest 50” – a designation for the fastest growing trade shows held in the United States based upon net square feet of exhibit space, number of exhibitors and total attendance. This recognition is critical in that it helps DEMA negotiate for good hotel and convention center rates in the most popular three convention cities in the U.S. The DEMA Show Committee and DEMA Board of Directors are grateful for the support of the diving industry, which in turn helps everyone attend and exhibit at future DEMA Shows at the lowest possible cost. ■

2023 DEMA Annual Report

MANUFACTURERS’ COMMITTEE

MIKE HOLLIS, 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. 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 utilized to benefit all members, the association or the industry, and is composed of 5% of the gross receipts from DEMA Show each year. The allocation of the funds follows a Board-approved process, and the Manufacturers’ Committee has been supportive of many different initiatives over the years.

DISASTER ASSISTANCE

In 2023, the Manufacturers’ Fund allocated funds to assist those impacted by the fires in 28

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Maui as well as for other disaster assistance that benefits the industry, and helps exhibitors and Buyers get to DEMA Show 2023.

PROP 65

The Manufacturers’ Fund also agreed to fund a contract with an attorney specializing in issues for manufacturers, retailers and other diving industry stakeholders created by California’s Safe Drinking Water and Toxic Enforcement Act of 1986 (“Proposition 65”). Litigation and fines from “Prop 65” have already impacted many diving manufacturers and retailers. As the 5th largest economy in the world, a vast majority of diving products can end up in the stream of commerce in California where they will be subject to Prop 65. This law reaches far beyond California and can affect any diving equipment manufacturer anywhere

(even internationally) as well as any entity in the chain of manufacturing and distribution including retailers or resorts selling the product. DEMA‘s Prop 65 specialist attorney is providing a presentation during DEMA Show 2023, as well as opportunities to schedule one-on-one meetings to discuss Prop 65 issues. Private meetings are available in 20-minute segments. These free meetings are available on a firstcome, first-served basis only to DEMA Show 2023 registered attendees and exhibitors, courtesy of the Manufacturers’ Fund.

MANUFACTURING RESEARCH

During 2023, the Manufacturers’ Committee, with the assistance of the DEMA Research Committee established the Manufacturing Purchase Index (MPI). The goal of this new program is to provide information on manufacturing trends in the diving industry. This manufacturing data can assist with critical decision making for ALL segments of the diving industry and can be used in conjunction with data on certifications as well as other customer data. It is PAST data but can help with future trends. For example: Hard goods manufacturers and suppliers: • A regulator manufacturer makes production decisions based on the new future orders it expects from retailers. Those new regulator orders drive management’s purchasing decisions about dozens of component parts such as high-or low-pressure seats/ poppets, hoses, and orings. Existing inventory balances also drive the amount of production the manufacturer needs to complete new orders and to keep some inventory on hand at the end of the month. • Parts Suppliers may also make decisions based on this important data. A parts supplier for a regulator manufacturer follows the data to

estimate the amount of future demand for its products, including raw materials such as plastic or rubber. Parts suppliers may also be interested in seeing an index on inventory, which affects the amount of production its manufacturing clients must generate. • Proposed MPI information about supply and demand affects planning for manufacturing budgets, managing staffing levels, and forecasting cash flow. Other members of the diving industry can also benefit from this important data: • Retailers can use this data as it reflects product availability (especially soft goods) for new customers learning to dive. • The data can be used by certification organizations as an indicator of trends in purchasing. Divers that obtain continuing diver education also tend to purchase more equipment. • Divers with additional education also tend to travel to dive, which can assist with both liveaboard and landbased dive resort forecasting. • This data is also important for current retailers seeking to expand and informs and encourages new business growth for all retailers: brick and mortar and online. • All members of the diving industry benefit because DEMA has data that can be utilized to help legislatures better understand the diving industry. The diving community CANNOT easily discuss or change detrimental laws without being able to discuss the current status of manufacturing and other research-based statistics. For more details on this important program, see the information contained in the DEMA Research Committee section of this Annual Report. ■ 2023 DEMA Annual Report

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.

Association), Tom Ingram (DEMA), and Bob Harris, DEMA’s Legislative Advocate in Florida.

The Public Policy Committee engages in legislative and regulatory activities which promote the health of aquatic resources while protecting diver access to those resources; DEMA’s Public Policy goals include keeping dive sites accessible to divers, reducing, or managing government regulation, and keeping dive locations clean and healthy. The Committee advocates for The 2023 Public Policy Committee included Stuart protection of the underwater environment, and Cove (Stuart Cove’s Dive Bahamas), Patrick Danko actively monitors legislation and government (Garmin), Jim Gunderson (Scuba Educators administrative activities in the U.S., in the different International), Al Hornsby (Professional U.S. states and territories, and globally to prevent Association of Diving Instructors), Tom Leaird adverse legislation which may impact diving (Scuba Educators International), Jeff Nadler businesses, may adversely impact the diving (Professional Association of Diving Instructors), environment, or may restrict access to dive sites. Dan Orr, Chair (Dan Orr Consulting), Carlos A key element of DEMA’s Public Policy work is to Santana (Hawaiian Islands Recreational Scuba review advocacy issues with a global perspective; 30

2023 DEMA Annual Report

for example, if an issue in Florida could have an impact on the recreational 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.

THE INDUSTRY NEEDS DEMA MEMBERS TO PARTICIPATE!

Public Policy is an area where Members can have a direct impact on the Industry while engaging with DEMA. When DEMA publicly comments or takes action on potential legislation DEMA Members receive advance notifications regarding changes to legislation or regulation. 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 or regulation 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. In 2023, DEMA continued to publish the DEMA Public Policy Digest, a monthly e-newsletter that reports on issues impacting recreational diving. DEMA solicits input from Committee members and DEMA Members for this e-newsletter, and all embers can reach out to DEMA at publicpolicy@dema.org for input on the Digest, or for advocacy issues impacting their business.

DEMA ADVOCACY POSITION STATEMENTS FOR 2023

DEMA has adopted the following advocacy 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 adopting positions that address these approved Position Statements. Business Management. DEMA supports legislation that eases regulatory and financial burdens on diving businesses of all sizes. Communications. DEMA supports legislation to protect the right of all businesses to communicate with their customers and to the public at large in furtherance of their purposes. Forms of communication that are considered within this Position Statement include email, telephone, regular mail, fax, mobile and text, all forms of social media, and Internet. Employment Practices. DEMA supports flexibility in employment practices for all diving businesses, and advocates for legislation that supports flexibility or reduces restrictive employment practices for DEMA members. Employment practices on which DEMA supports flexibility include number of work hours; wages; non-exempt vs 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 2023 DEMA Annual Report

resources while protecting diver access to those resources, promoting, and sustaining clean and healthy places to dive.

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

Health Insurance. DEMA and the diving business community support legislation that promotes cost effective employee health insurance programs when such programs are without undue regulation or penalty.

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.

Safety. 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 workers compensation 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 supports the long-term viability and availability of diving-related business and professional insurance. 32

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2023 DEMA ADVOCACY

During 2023 DEMA devoted resources to numerous and significant diving-related advocacy issues. With so many advocacy issues during 2023, there is insufficient space to list all of them in this report. Several important issues are presented here for member review, and information on all of DEMA’s 2023 advocacy issues can be obtained through prior issues of DEMA’s Public Policy Digest. Issued monthly at no cost to subscribers, this e-publication provides a brief overview of some of the important topics impacting members of the diving community each month, and emphasizing how these legislative issues impact recreational

diving. A free subscription can be found here. Among the Advocacy Issues for 2023 are: • U.S. Rules on Independent Contractor/Employees • Shark Cage Diving Banned, Guadalupe Island, Mexico • Federal Legislation Introduced to Encourage the Use of Retired Naval vessels for Artificial Reefs. • Florida Fish & Wildlife Commission Leaves Goliath Grouper Spawning Sites Open to Fishing • Help Fight Rising U.S. Insurance Rates by Joining the DIVE BOAT Act Social Media Campaign

expected to provide new U.S. federal guidance on determining if a worker should be classified as an employee or independent contractor. For those in the diving industry currently hiring instructors, equipment technicians, or other positions as independent contractors, this change in the rules could have a significant impact on the cost of doing business. DEMA strongly advises all diving business in the U.S. to watch this issue carefully and to consult with an employment attorney and tax specialist as these changes go into place. After receiving thousands of public comments, it is unclear at this writing what the DOL final rules will be, but if final rules follow those proposed, significant business changes will likely occur.

• Help Support for the Freedom to Invest in Tomorrow’s Workforce Act

The previous Independent Contractor rules were considered “employer-friendly” and emphasized two key issues to consider when classifying a worker as an “employee” or as an “independent contractor”:

• U.S. National Strategy for a Sustainable Ocean Economy

• Opportunity for the worker’s profit or loss depending on managerial skill,

U.S. Rules on Independent Contractors and Employees.

• Nature and degree of control over the worker.

The proposed rule would include these two factors along with four others for a total of Impact on Recreational Diving: The proposed six, to make this determination. Under the rules on Independent Contractors and Employees proposed rules a seventh factor is also included, under consideration will have a direct and detrimental impact on diving businesses as operators almost as an “others as needed” clause. The may find it difficult or impossible to classify workers DOL presumes that the primary factors as independent contractors. Dive businesses may be are an analysis based on the “totality of the required to pay higher labor costs, including workers circumstances,” which will likely require much compensation insurance and wage-related increases. more work on the employer’s part to select the correct classification: The other factors are: At this writing the long-delayed publication of • Degree of permanence of the federal rules classifying Independent Contractors work relationship, versus Employees should be published in October 2023. In 2022 the U.S. Department of • Is work performed an “integral” Labor (DOL) published a proposed Employee or part of the employer’s business? Independent Contractor Classification Under the Fair Labor Standards Act and public comments • Skill and initiative, were accepted until the end of December. After • Is the worker’s investment either capital or numerous delays, the final rules for this issue are 2023 DEMA Annual Report

entrepreneurial, and what is the worker’s investment relative to employer’s investment – a determination of whether an individual is economically dependent on the employer. Note: These proposed rules only apply when determining worker classification under federal wage and hour laws. Employers might also have compliance obligations regarding the complex tests for determining worker status under additional federal, state, local, and other regulations, and laws. DEMA elaborated on each of these factors in the February 2023 Public Policy Digest. According to Paychex.com, the changes associated with the new rule could have financial implications for employers, particularly when the changes suggest individuals formerly classified as independent contractors should be classified as employees and are perhaps eligible for the employer’s health coverage and retirement benefits. Misclassifying a worker can have serious financial consequences for a business, including owing fines, penalties, back wages, and back taxes. Employers/businesses should review the Department of Labor information about current and proposed classifications to ensure they are complying and should seek the advice of their employment attorney and tax specialist.

Shark Cage Diving Banned, Guadalupe Island, Mexico Impact on Recreational Diving: Prohibiting shark-related tourism in Guadalupe will have a detrimental impact on dive consumers, will likely have a negative impact on the White Shark population in the area and will unnecessarily disrupt businesses that serve the recreational diving industry. Effective January 10, 2023, Mexico banned White Shark-related tourism on Guadalupe Island. This ban remains in effect at this writing.

2023 DEMA Annual Report

Unfortunately, this prohibition appears to be designed to prevent thousands of divers each year from actively and safely engaging in observing sharks, where they could gain a better understanding of this creature. Research by independent and credible scientists indicates that using “provisioning ecotourism” – the introduction of small amounts of natural food in the water to interest sharks for the purpose of diver observation – does NOT create an increased risk for non-divers and swimmers, is not detrimental to the animal, and in fact, produces the opportunity to create “shark ambassadors” that help protect these animals. Prohibiting shark-related tourism in Guadalupe will have a detrimental impact on dive consumers, will likely have a negative impact on the White Shark population in the area and will unnecessarily disrupt businesses that serve the recreational diving industry. Since Mexico has limited enforcement resources, without the current dive operators monitoring the location, it is likely that poaching and other irresponsible activities will run rampant, all to the detriment of the White Shark population there.

The new rules, which took effect January 10, are a response to allegedly “bad practices” in the industry, per Mexico’s Ministry of Environment and Natural Resources. Practices cited by the government included mishandling the bait natural food used to attract sharks; tourists and film crews illegally swimming outside of cages; drones flying over seal colonies; and pollutant dumping, among other prohibited activities. According to the government’s new rules, these tourism activities have put White Sharks at risk. The government claims that the ban will protect the sharks and conserve their habitat. For more information, see: • Magazine, Smithsonian. “Mexico Bans Great White Shark-Related Tourism on Guadalupe Island.” Smithsonian.com, Smithsonian Institution, 14 Feb. 2023, https://www. smithsonianmag.com/smart-news/mexicobans-great-white-shark-related-tourismon-guadalupe-island-180981616/. • Guadalupe Island Closure Puts Big Sharks At Risk: OCEAN TALKS (14-minute video)

Federal Legislation Introduced to Encourage the Use of Retired Naval Vessels for Artificial Reefs. Impact on Recreational Diving: Placed properly, artificial reefs such as these retired naval vessels have been proven to remove fishing and diving pressure from natural reefs and multiply the opportunities for shelter for many species. Artificial reefs also provide great locations for recreational diving and draw divers from many different areas to the artificial reef ’s location, giving an economic boost to dive businesses as well as businesses that serve these divers, such as restaurants, hotels and transportation. In February, Representative María Elvira Salazar (R-Fla.) and Congressman Ed Case (D-HI) reintroduced a bill to direct the Secretary of the Navy to notify Congress of the pending retirement of any naval vessel that is a viable candidate for artificial reefing. The bill, called the “Reusing Equipment for Environmental Fortification,” or “REEF Act” incentivizes retired Navy ships to be repurposed into artificial reefs, boosting marine environments, and creating recreational and economic opportunities in the process. Senator Marco Rubio (R-FL) introduced the Senate companion to the House bill. DEMA has long been a supporter of creating artificial reefs as dive sites, fish attractors and as anchors for invertebrate life, using retired navy vessels. These artificial reefs take pressure off the natural reefs and are a key habitat for the vulnerable Goliath Grouper in Florida. In 2008 a bill authored by DEMA advocate Bob Harris entitled the Ships to Reefs Act (Florida SB 432) was passed by the Florida House and Senate and signed by then Governor Crist. The federal REEF Act incentivizes retired Navy ships to be repurposed into artificial reefs, boosting marine environments, and creating recreational and economic opportunities in the process. The REEF Act was first introduced in 2023 DEMA Annual Report

September of 2021 by Congresswoman Salazar and Congressman Ed Case (D-HI). There was also movement to include this language in the 2023 National Defense Authorization Act (NDAA), but ultimately it was not included in the NDAA. In 2021 FWC Director of Marine Fisheries Management Jessica McCawley indicated, “Reefing retired ships is a win for all parties. It is cheaper than scrapping, it provides habitat for fish, they are new underwater destinations for divers, the military legacy of these ships continues, and ships drive economic activity as Florida’s restaurants, bait shops, dive shops, hotels, and other small businesses serve customers every day.” “Miami’s coasts are filled with history and wildlife. This bill allows us to use our retired Navy ships to protect South Florida’s beautiful coastal ecosystems for decades to come,” said Rep. Salazar. “I am proud to support this bipartisan bill with my colleague to continue making good use of our nation’s military infrastructure.” “Florida’s marine ecosystems are of vital importance to the state’s biodiversity, economy, and way of life. The REEF Act would create new opportunities to utilize retiring navy ships as artificial reefs to the benefit of marine life and Florida’s tourismbased economy,” said Senator Marco Rubio. “Creating artificial reefs using excess (decommissioned) naval vessels can help restore and preserve our fragile ocean ecosystem and create opportunities for those who want to explore the biodiversity that would surround a sunken structure,” said Congressman Case. “There are a number of structures, including small boats and planes, in waters off my home state of Hawai‘i that both restore our threatened marine ecosystem and draw those who want to experience our marine life up-close and understand how it must be preserved. Our bill will expand on these opportunities in Hawai‘i and elsewhere.” The REEF Act will help protect South 36

2023 DEMA Annual Report

Florida’s coastal ecosystem, provide unique opportunities for U.S. veterans, and boost regional and local economies. DEMA strongly supports efforts to create artificial reefs and suggests writing to your Representatives and Senators, asking for their support of this legislation. You can read the full text of the House bill (HR 950) here, and the Senate version (S 386) here. ACT NOW! Click here to use our advocacy software to send an email to your legislators with just a few clicks!

Florida Fish & Wildlife Commission Leaves Goliath Grouper Spawning Sites Open to Fishing Impact on Recreational Diving: The opportunity to view Goliath Groupers attracts divers from all over the world to South Florida. In addition to the fact that these large, slow fish attract diving business, they are viewed by many as vulnerable and the population appears to be dwindling. Opening these animals to catch and release fishing where they can be injured or die from the damage caused by catch and release fishing is a tragic misuse of the power held by the Florida Fish and Wildlife Commission. On May 10-11 the Florida Fish and Wildlife Commission (FWC) held its quarterly meeting in Miami which included a review of FWC Staff proposed rules restricting catch and release fishing for Goliath Grouper in three key known spawning aggregation sites in South Florida. Unfortunately, the Fish and Wildlife Commission failed to follow the staff recommendations to close these areas to catch and release fishing, leaving the already vulnerable Goliath Grouper population in Florida open to this damaging fishing practice. The staff-proposed rule was intended to reduce potential impacts of catch-and-release fishing on Goliath Grouper spawning aggregations off

Martin and Palm Beach counties. DEMA and members of the Florida Diving Community met with and provided extensive feedback to FWC and staff. Staff recommendations included a final rule that closed the area for 700 feet surrounding the three well-known spawning sites to catch and release fishing. DEMA’s comments to FWC on this topic can be seen here. Being caught and extracted from these wreck sites, even though released afterward, is disruptive to the Goliath Grouper’s spawning activity. Goliaths are damaged by being hauled off the bottom and experiencing barotrauma injuries, as well as injuries from the fishing equipment. Divers are supportive of fishing closure in these limited areas for the limited spawning activity time frame to conserve Goliath Groupers at these popular ecotourism sites. All harvest of Goliath Grouper in Florida state waters became prohibited starting in 1990 and harvest in federal waters remains prohibited today. FWC opened a “limited” harvest of these fish earlier this year, despite the fact that this species was overfished to the point of being considered “vulnerable” on the International Union for Conservation of Nature (IUCN) Red List. The anecdotal evidence of fishing injuring these fish and the commonsense concern that being pulled off the wrecks during spawning will disrupt this critical activity aside, the FWC decided against prohibiting catch and release fishing for the brief period during which this species spawns. Even though the catch and release rule has been decided, DEMA strongly encourages all members of the diving community (whether in Florida or elsewhere) to write directly to Florida Fish and Wildlife Commissioners and express your concerns with this reckless approach to this valuable and vulnerable species. You can write directly to the FWC Commissioners regarding this ill-conceived ruling at commissioners@MyFWC.com.

Help Fight Rising U.S. Insurance Rates by Joining the DIVE BOAT Act Social Media Campaign Impact on Recreational Diving: If this bill passes, the current cost of vessel liability insurance could be reduced. Actions taken in late 2022 and early 2023 by Congress have already resulted in unnecessary and unfair increases in insurance rates for dive vessels. DEMA continues to work with Members of the U.S. Congress and their staff to provide business operators with much-needed insurance premium relief, BUT WE NEED YOUR HELP in generating awareness and support for The DIVE BOAT Act. We have created a series of social media campaign images and messages and ask that you share them with your social media followers, asking for their support of The DIVE BOAT Act. Several dive stores are helping us reach out to members of Congress and we need your help too! Please click here to download the materials and start sharing them today!

Help Support for the Freedom to Invest in Tomorrow’s Workforce Act Impact on Recreational Diving: If this bill passes, training organizations and dive centers could see more candidates for diving instructor training, and more people choosing diving instruction as a career. The bipartisan, bicameral Freedom to Invest in Tomorrow’s Workforce Act (S. 722 / H.R. 1477) would expand eligible uses of tax-favorable 529 savings plans to cover costs associated with workforce training and credentialing programs, such as professional certifications. Professional-level certifications, such as recreational diving instructor certifications, qualify for the benefits listed under these bills. 529 Savings plans can currently be used for college savings as well as savings for K-12 education. There are two types of 529 plans: 2023 DEMA Annual Report

prepaid tuition plans and education savings plans. All fifty states and the District of Columbia sponsor at least one type of 529 plan. Currently, training, certifications and other credentials are ineligible under 529 plans. The Freedom to Invest in Tomorrow’s Workforce Act Would Provide Economic Flexibility and Opportunity. This bill would provide valuable tax-advantaged resources for workers who pursue career growth, mid-career changes or alternative career pathways, and would help those interested in a professional career in recreational diving. Expanding eligible uses for 529 plans would empower workers of any educational background, skill level or age and would benefit all industries and professions that rely on employees with specialized training or recognized credentials. American workers and families could use their 529 plans to help cover: • Certification program tuition, • Testing fees, including practice exams, • Required books and equipment, • Continuing education and certification renewal, and • Other required costs to obtain and maintain a professional certification. How Can You Help?

oceans might be on the horizon unless input is provided by the diving community to control restrictive measures. Earlier this fall, the Office of Science and Technology Policy (OSTP) and the Council on Environmental Quality (CEQ), on behalf of the interagency Ocean Policy Committee (OPC), requested input from all interested parties to inform the development of a National Strategy for a Sustainable Ocean Economy (National Strategy). According to the U.S. Federal Register, the National Strategy will describe the vision, goals, and high-level actions for a robust, equitable, secure, sustainable ocean economy enabled by healthy, resilient ocean ecosystems. It will build on current Federal, Tribal, Territorial, State, and regional sustainable ocean management practices and identify needs and opportunities to enhance these efforts with new and emerging science, technology, knowledge, and policy. Through this request for information (RFI), the Ocean Policy Committee sought public input on what the goals and outcomes of the National Strategy should be, and how the Federal Government can best advance sustainable management of ocean, coastal, and Great Lakes resources and ecosystems of the United States. As of this writing no additional information has been provided. Interested parties can review the request in the Federal Register here.

Reach out to your U.S. Senators and Representative and ask them to support The Freedom to Invest in SUMMARY Tomorrow’s Workforce Act (S. 722 / H.R. 1477). 2023 has been an active year for DEMA’s Public You can find your lawmakers at these links: Policy Committee and Staff. Public Policy has long-term impacts on international, regional, and • Find your Senators here. local dive business. DEMA and the Public Policy • Find your Representative here. Committee recommend that all diving businesses become involved with these important issues. U.S. National Strategy for a Sustainable

Ocean Economy

Impact on Recreational Diving: A national strategy to control recreational uses of the 38

2023 DEMA Annual Report

Be sure to subscribe to DEMA’s Public Policy Digest. Issued monthly at no cost to subscribers. A free subscription can be found here. ■

2023 DEMA Annual Report

GO DIVE NOW MARKETING CONSUMER 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 encourage customer retention. In 2016, DEMA launched the Go Dive Now consumer campaign to help in this effort. Even during the peak of the global COVID-19 pandemic, DEMA continued to provide consumer access to the GoDiveNow. com website, including member store and destination listings. Throughout 2023, DEMA has strived to increase access for Members to consumer marketing materials and support. The global COVID-19 pandemic forced DEMA to suspend its national Go Dive Now social media ad campaign, and instead, DEMA focused on how it could help its member retail stores and destinations better reach potential divers and potential dive customers directly. This resulted in the creation of the Go Dive Now Marketing Digest—an email newsletter offering insightful marketing support, as well as providing access to DEMA’s ongong Go Dive Now marketing lesson video series.

2023 DEMA Annual Report

GO DIVE NOW MARKETING DIGEST NEWSLETTER

Distributed monthly, DEMA’s Go Dive Now Marketing Digest is an email subscription providing free social media images and posts for industry use. Subscribers are encouraged to use these marketing materials to reach a targeted audience of affluent, active potential dive consumers, as well a to keep their current customers engaged. In additional to free done-for-you social media content, the Go Dive Now Marketing Digest also features captivating video lessons providing exclusive insights and expert guidance. Presented by DEMA’s Communications Manager, Rachelle Reimers, each marketing lesson provides actionable tips for how to easily and effectively elevate your marketing efforts. Both members and non-members are encouraged to subscribe to the Go Dive Now Marketing Digest. An archive of the suggested social media content and images is available online.

provide them with a list of qualifying businesses. By clicking on a listed DEMA Member store or travel provider link, a pop-up allows the consumer to provide their contact information so the DEMA Member business can follow up with them about their goods, services, and/or destination. Members are able to customize their listing with specific details about their operaton such as the services they offer, contact information, and business logo,

DEMA MEMBERS CAN USE GO DIVE NOW MATERIALS FOR FREE

DEMA continues to provide Members with access to advertising visuals and video templates. These resources have beeb designed by a professional advertising agency exclusively for DEMA Members’ utilization. Using this complimentarty materials, Members are able to produce their own cost-effective advertising campaigns. To access the FREE Go Dive Now Member Toolkit, Members should log in to DEMA.org. ■

LEADS FROM GODIVENOW.COM TO DEMA MEMBER STORES

Since January 2019, the GoDiveNow.com website has incorporated lead generation functionality. The website’s Dive Store Finder and Dive Vacation Finder features help consumers locate a DEMA Member store or travel provider in the area of their interest. Results from a consumer’s search

2023 DEMA Annual Report

RETAILER ENGAGEMENT COMMITTEE

MERIAL CURRER, CHAIR

The role of the Retailer Engagement Committee is to explore the ways that DEMA can assist the dive retail sector and engage retailers in the process. The 2023 Retail Engagement Committee consists of individuals working with or owning dive retail companies from different regions. The operations also vary in size and use many different dive-related vendors (e.g., manufacturers and training organizations). Each member of this committee brings their own experiences and expertise to retail issues under discussion.

includes: Robin Bostater, Kaizen Scuba; Jeff Cinciripino, Scuba Shack Diving Services; Merial Currer (Chair), Patriot Scuba; Patrick Hammer, Dive Right In Scuba; and Rich Thomas, International Scuba.

As the primary audience for DEMA Show is retailers, retail staff and instructional 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.

• Reviewing DEMA’s retail operations survey and data and making recommendations for future research.

The 2023 Retailer Resource Committee 42

2023 DEMA Annual Report

During 2023 the Retailer Engagement Committee was responsible for the following: • Recommending professional development topics for DEMA Show – in-person and online programs.

• This Committee is instrumental in proposing the direction for future Retail Engagement activities, including retail newsletters and others.

RECOMMENDING PROFESSIONAL DEVELOPMENT TOPICS FOR DEMA SHOW – IN-PERSON AND ONLINE PROGRAMS.

Whether for DEMA Show 2023 or for online consumption prior to DEMA Show, the Retailer Engagement Committee reviews and makes recommendations for all of DEMA’s proposed retail professional development programs. The process consists of reviewing submitted speaker/topic proposals, which include

education outcomes and objectives, relevance to the current market, and speaker quality. Following several retailer surveys and a review of professional development topics previously presented at DEMA Show, the Committee provided feedback on general topic headings of interest, including ranking topics by retail need. A Committee survey revealed the following areas of interest:

RETAILER TOPIC PRIORITIES - RETAIL ENGAGEMENT COMMITTEE RESULTS (SCALE OF 1 TO 5 WITH 1 = LOWEST PRIORITY, 5 = HIGHEST PRIORITY):

AVERAGE

How to use diver training to increase retail dive equipment sales Selling local diving to increase dive equipment sales Developing a partnership: Retailer and Equipment Sales Representative Creating and stocking a profitable equipment repair department Sales Training for retail staff Making the dive center environmentally friendly/”sustainable” Instructors: Employees or Independent Contractors? Forecasting merchandise sales – using “open to buy,” inventory management and more Attracting a younger audience to the dive center Considerations for operating a profitable dive equipment rental department (cost, pricing, profit) Post-COVID, are customers moving to buy more online, and how can dive retailers adapt to this shift? What do young consumers say about scuba diving? Creating a dive retail store floorspace layout that increases merchandise sales What to consider when pricing dive equipment repairs and service How to display diving equipment inside the dive retail store Prospecting for customers in the area near a store’s location Advertising for retail dive businesses (social media, email, print, using zip code ad campaigns) Correctly allocating building space to achieve the best retail mix for profitability: retail dive operations: inventory storage, office space, training classroom, repair and service department, air fills, etc. Managing a dive retail sales force (various topics) Choosing a dive store business (geographic) location Legal Responsibilities when selling dive travel Working with a dive travel wholesaler Creating effective dive store window displays and displaying merchandise inside the store. The future of dive retailing post-COVID How have you stayed open (or re-opened) during/following COVID? Overall Average

4.29 4.14 4.00 3.57 3.57 3.57 3.43 3.29 3.29 3.14 3.14 3.14 3.00 3.00 2.71 2.57 2.57 2.57 2.57 2.43 2.43 2.43 2.29 2.29 1.57 3.32

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Combined with DEMA’s Retail Task Assessment developed by this Committee, this data informs the Committee when selecting professional topics for DEMA Show. DEMA Show in-person attendees that take advantage of the DEMA-Sponsored Marketing track in 2023 can gain knowledge about marketing from experts in their field. Participants earn a digital badge that can be used to verify the sessions attended and completed – whether the badge is used to verify professional development participation for current or future employers or to help demonstrate the participant’s value as a volunteer or business owner. View Full List of Badge Sessions that qualify for the digital DEMA 2022 Marketing Education badge. The full complement of online and in-person DEMA Show DEMA-sponsored Professional Development sessions can be found here.

2023 DEMA Annual Report

RETAIL OPERATIONS SURVEY

In combination with DEMA’s Research Committee, the Retail Engagement Committee reviewed and provided input on DEMA’s latest research endeavor, a Retail Operations Survey. The goal of this survey is to provide retail benchmarking data on which retailers can compare their own operations with others.

The data is being gathered at this writing for publication later in 2023. Data on retail operations was last gathered by DEMA in 2016.

PREPARING FOR PROFESSIONAL DEVELOPMENT SESSIONS FOR DEMA SHOW 2024 – CALL FOR EDUCATION PROPOSALS.

The Retail Engagement Committee works well in advance of presenting professional development sessions to the industry. In 2022 the Committee conducted a full review of the call for professional development speakers and determined the need to include calls for dive industry professionals as well as general topic speakers for the DEMA audience.

CALL FOR GENERAL PROFESSIONAL DEVELOPMENT SPEAKERS

of relevant information from outside the diving industry to the DEMA attendee audience. While valuable, and providing a different small business perspective, the Committee also determined a need for bringing in actual dive retailers to provide real-world diving retail information to the DEMA community.

CALL FOR PEER-TO-PEER PROFESSIONAL DEVELOPMENT SPEAKERS

Again in 2023, as in 2022, this committee issued a call for peer-to-peer speakers to address divespecific retail topics for the in-person DEMA Show. If you are an accomplished dive retailer and would like to give back to the diving community through professional development sessions during DEMA Show 2024, be on the lookout early in 2024 for the call for DEMA Show speakers! ■

DEMA Show solicits calls for professional development speaker proposals from the general retail, marketing, operations, and sales fields. These are strong programs and bring a wealth 2023 DEMA Annual Report

DEMA RESEARCH COMMITTEE

WILLIAM CLINE, CHAIR

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. The 2023 Research Committee consists of DEMA Members that have interest, experience, and an understanding that market research of all kinds is needed for diving businesses to be successful. Research critical for DEMA and the diving industry include DEMA Show-related topics, market related issues, customer issues and retail-related inquiries. The Research Committee includes: William Cline (Chair), Cline Group Marketing; Ben Collins, Garmin; JoAnn Haack, Divers Aert Network; Shelli Hendricks, Blue Horizons Solutions; Lily Mak, Enchanted Sea Images; Jeff Mondle, PADI; David Prichard, Enchanted Sea Images; Jeff Tennant, Buckeye Dive Club. 46

2023 DEMA Annual Report

THE NEED FOR RESEARCH

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 cost-effective manner. DEMA’s Research Committee guides several ongoing research projects for DEMA Member 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 walks into the store and purchases the equipment 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 help enable industry 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. That’s where the Research Committee excels. During 2023 the Research Committee Workplan included: • Reviewing the DEMA Certification Census • Developing and deploying a Retail Operations Survey • Developing and deploying a Retail Advertising Survey • Publishing the results of DEMA’s Dive Consumer Behavioral Research. • Development and Deployment of the Manufacturing Purchase Index (MPI) Research Report.

REVIEWING THE DEMA 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 2023. The three participating certification organizations for 2023 are NAUI, SDI/TDI and PADI. Taken together, these organizations represent most of the Open Water-level certifications issued in the U.S. and U.S. territory market. The cooperative effort between all participating certification organizations includes providing their

certification information to an independent, thirdparty auditing firm. Open Water certification numbers are reported by the third-party administrator (TPA) to the Industry in aggregate total, only after the TPA does a thorough review of the data, removes any duplicated customer records that appear across or from within agencies, and receives written verification of the final numbers from each reporting training organization. The process is designed to make the Certification Census totally anonymous regarding 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.

DEVELOPING AND DEPLOYING A RETAIL OPERATIONS SURVEY

The last time DEMA conducted a full Retail Operations survey was in the 1990s. While the DEMA Research Committee has conducted several smaller studies over the years, including retail advertising (2016) and retail education research on topics of importance to retail owners and staff (2022), a full research effort designed to obtain cross referenced data and to understand each component of the retail operations area is long overdue.

Goals of DEMA’s Retail Operational Research There were several considerations when planning this operational research: •

Benchmarking: DEMA sought to provide information that can be utilized to guide members when making business decisions about their own operation.

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•

Economic Data: DEMA and the Industry have little in the way of reliable diving industry economic data, especially at the retail level. Aside from providing an idea of the potential size of the retail industry, this data is especially critical when demonstrating the industry’s size to policy makers.

•

Specific Data Points: DEMA often needs specific data points for its work in public policy as well as in determining specific courses of action. This includes an understanding of insurance costs, the value of the industry in specific regions and more.

•

Travel Data: Currently DEMA’s travel data does not include a retailer component. It has been suggested that Dive travel be included in this survey.

Methodology DEMA engaged directly with retailers on this survey. The data was collected using the Survey Monkey online survey tool. DEMA used the list of retail attendees from the last three DEMA Shows (2019, 2021, 2022) as the basis for reaching current retailers. These are retailers who are already engaged with DEMA. Data will be analyzed for review by this committee. At this writing the Retail Operations Survey has just closed. Results will be made available after Committee review prior to the close of 2023.

DEVELOPING AND DEPLOYING A RETAIL ADVERTISING SURVEY

•

Benchmarking: DEMA seeks to provide information that can be utilized to guide members when making business decisions about their own advertising.

•

Specific Data Points: Advertising research is also critical to determining specific courses of action for retailers as well as DEMA.

•

GoDiveNow: DEMA is currently contemplating the reinstitution of GoDiveNow. Understanding if, how, and when retailers advertise is critical to this effort.

•

Travel Data: Currently DEMA’s travel data does not include information on how and when retailers advertise to obtain travel business.

As with the Retail Operational Survey, DEMA proposes to engage with retailers directly on this Advertising survey. The data would be collected using the Survey Monkey online survey tool. DEMA would use the list of attendees from the last three DEMA Shows (2019, 2021, 2022) as the basis for reaching current retailers. These are retailers who are already engaged with DEMA. Data would then be analyzed for review by this committee. DEMA’s Retail Advertising Survey is scheduled to go out at the beginning of 2024.

PUBLISHING THE RESULTS OF THE U.S. AND INTERNATIONAL DIVER BEHAVIORAL STUDY

Originally part of the Retail Operational Research, the Committee believed that the advertising component made the Operational Survey too long and cumbersome. The Committee decided to move the Advertising component to a separate research project.

In September 2022, the DEMA Research Committee launched an updated diver behavioral survey, asking the industry to participate in gathering data from their customers to get a better understanding of any changes taking place in the market, post-pandemic.

As with operational research, there are several considerations when planning this advertising research:

This latest iteration of the Diver Behavioral Study is an updated version of the survey last used in 2020. The 2020 Study yielded more than

2023 DEMA Annual Report

9,700 responses from more than 130 countries. That survey remains great benchmarking data, covering diver behavior in such areas as dive travel, local diving, equipment purchases and diver training, all PRIOR to the pandemic. Survey results are at no cost to Members from the links below. The 2023 Diver Behavioral Survey received more than 12,000 responses. Data from Canada will also be available in the coming weeks. Please check the DEMA Store for more important research.

DEVELOPMENT AND DEPLOYMENT OF THE MANUFACTURING PURCHASE INDEX (MPI) RESEARCH REPORT.

Methodology These diver behavior studies are conducted by asking DEMA-Member companies to assist by contacting their own customers with a customized web survey link tied back to their own company. Data is collected through a third-party administrator (TPA), and the Member company’s survey responses are also provided to the Member for review. So, while the aggregate data from all participating Members is compiled and reported to the industry by the TPA, the individual DEMAMember company receives responses from their own customers, allowing them to compare their customer’s data to the Industry-wide aggregate.

In 2023 DEMA initiated a new business indicator for the manufacturing sector. The methodology for the Manufacturing Purchase Index (MPI) is identical to that used by the Institute for Supply Management (ISM) which is commonly cited and utilized within the U.S. general manufacturing sector and investment community. The MPI does not require reporting specific sales numbers but provides a leading trend indicator to understand more fully the state of orders and inventories from diving’s manufacturing sector.

Background In the United States the Institute for Supply Management (ISM) began using a “Purchasing Manager’s Index” (PMI) in 1948 to assist in understanding data for the manufacturing sector. The PMI is used extensively today by the U.S. venture capital and business communities seeking to invest in U.S. manufacturing companies. The published data from ISM is about PAST orders and other activities but is also used as a means of predicting broader economic issues. Even though the data is for past orders, inventories and other figures, the PMI acts as a leading indicator of manufacturing output that predicts economic recession or expansion of industries. 2023 DEMA Annual Report

The PMI is a simple measurement tool; companies can report whether specific aspects of the manufacturing business are increasing, deceasing, or have remained unchanged during a given period. In effect this is a “trend analysis.” While PMI gathers data from a long list of categories within the traditional manufacturing sector. DEMA recommended that Dive Manufacturers report an abbreviated dataset, limiting the requested dive manufacturing data to quarterly reporting in the following areas: • New Orders: reflects the levels of new orders from customers. • Inventories: reflects the increases and/ or decreases in inventory levels.

Why is this Important to the Diving Industry? This manufacturing data can assist with critical decision making for ALL parts of the diving industry and can be used in conjunction with data on certifications as well as on other customer data. It is PAST data but can help with trends. For example: Hard goods manufacturers and suppliers: • A regulator manufacturer makes production decisions based on the new future orders it expects from retailers. Those new regulator orders drive management’s purchasing decisions about dozens of component parts such as high-or low-pressure seats/ poppets, hoses, and orings. Existing inventory balances also drive the amount of production the manufacturer needs to complete new orders and to keep some inventory on hand at the end of the month. • Parts Suppliers may also make decisions based on this important data. A parts supplier for a regulator manufacturer follows the data to estimate the amount of 50

2023 DEMA Annual Report

future demand for its products, including raw materials such as plastic or rubber. Parts suppliers may also be interested in seeing an index on inventory, which affects the amount of production its manufacturing clients must generate. • Proposed MPI information about supply and demand affects planning for manufacturing budgets, managing staffing levels, and forecasting cash flow. Other members of the diving industry can also benefit from this important data: • Retailers can use this data as it reflects product availability (especially soft goods) for new customers learning to dive. • The data can be used by certification organizations as an indicator of trends in purchasing. Divers that obtain continuing diver education also tend to purchase more equipment. • Divers with additional education also tend to travel to dive, which can assist with both liveaboard and landbased dive resort forecasting. • This data is also important for current retailers seeking to expand and informs and encourages new business growth for all retailers: brick and mortar and online. • All members of the diving industry benefit because DEMA has data that can be utilized to help legislatures better understand the diving industry. The diving community CANNOT easily discuss or change detrimental laws without being able to discuss the current status of manufacturing and other research-based statistics. Throughout 2023 DEMA has gathered data quarterly using two data points for equipment as defined below:

• As compared to the previous quarter. • As compared to the same quarter in the previous year For example, when reporting whether orders are up, the same or down, the comparison for Q1 2023 will be made first with Q4 of 2022, then with Q1 for 2022. In this way the data will reflect the changes per quarter DURING the year, as well as changes from the same time in the previous year. Combined, these figures help the user understand the seasonality of the dive manufacturing business and how it impacts the reporting companies. All data is reported to a third-party administrator (TPA) under contract with DEMA to maintain anonymity of the data with respect to each reporting company. Only aggregated data is reported to the industry. Neither DEMA nor any individual company sees any individual company’s data. Once committed, DEMA will ask that the company continue to report the selected categories for each quarter for the calendar year and provide rewards for participation as described below. With current labor shortages and shipping issues continuing in this and other sectors, reducing

reporting categories to essentials that help predict the health of the manufacturing sector may prove a more successful data collection strategy than requesting detailed numbers monthly.

How is the Index Calculated? Using the same approach as the traditional Purchasing Manager’s Index (PMI) the DEMA MPI is calculated as follows: MPI = (P1 * 1) + (P2 * 0.5) + (P3 * 0), Where: P1 = percentage of answers reporting an improvement P2 = percentage of answers reporting no change P3 = percentage of answers reporting a deterioration The proposed MPI is a percentage from 0 to 100 and is reported quarterly. An MPI above 50 percent indicates an expansion of new orders or inventories, as compared with the previous quarter. An MPI reading under 50 percent indicates a contraction, and a reading at 50 percent indicates no change. The further from 50 percent (in either direction) the greater the level of change has occurred in the reporting period.

Example: Assumes 10 Manufacturers report quarterly to MPI, in the Category of REGULATORS. 6 report an increase in new orders of regulators (P1) 2 report no change from last quarter in new orders of regulators (P2) 2 report a decrease in new orders of regulators (P3) Solution: MPI = (P1 * 1) + (P2 * 0.5) + (P3 * 0) MPI = (60% *1) + (20%*.5) + (20%*0) = 70%. Since this MPI is above 50% for the quarter, it indicates a net positive quarterly growth for new orders of regulators from the reporting Manufacturers. Once aggregated by the TPA, data becomes available to the industry in table format. 2023 DEMA Annual Report

Definitions of Equipment Reported: CATEGORY

EQUIPMENT TYPE

DEFINITIONS

Soft Goods

Masks

All styles of scuba masks. Excludes swim masks and goggles without nose pocket Paddle blade, Split blade, full foot, heel strap, other configurations Any style Sets including at least a mask and snorkel One-piece, two-piece, separate jackets. Excludes hooded vests Any style For use with wetsuits and any units designed for drysuit use. Includes hooded vests. Includes 1st and 2nd stage sets, Octopus or Alternate Air Sources and breathable inflators not attached to BCs. All except technical diving wings and plates. Includes snorkeling vests. Side-mount harnesses, tec “wings” and tec back plates All – wrist, hose/console mount Depth and pressure. Excludes watches and timing devices Clips, anti-fog, fin straps, mask straps, dive flags, tools, reels, mouthpieces, logbooks, slates, etc. All dive gear bags, rucksacks, backpacks, dive-related, mask or other accessory bags

Fins – All

Exposure Protection

Hard Goods

Snorkels Snorkel Sets Wetsuits Drysuits Booties, Gloves & Hoods Regulators BCs – All Technical-related Computers Analog Gauges

Accessories and Bags

Accessories Bags

Data Availability

• Equipment Type Report

Data is now available to members in various ways, including for those participating and those not participating. As required by law, data is also available to non-members at non-member pricing. Data can be obtained from the DEMA Store. Equipment Category Reports are free to members and available at non-member rates for others. Equipment Type Reports, which are more detailed, are available to Members at Member pricing, while others can obtain Equipment Type Reports at non-member pricing.

• Equipment Category Reports

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No equipment-intensive recreation operates long without having access to manufacturing data. It should be obvious that this information is critical to growing the industry. DEMA and the Research and Manufacturing Committees look forward to reporting this data into 2024. ■

2023 DEMA Annual Report

INTERNATIONAL MEMBERSHIP COMMITTEE

PETER SYMES, CHAIR

DEMA’s Mission is “Bringing businesses together to grow the Diving Industry worldwide.” With a “global” or “international” expansion in mind, DEMA formed a volunteer Committee in 2021 to evaluate how it might grow international membership and participation in DEMA Show. In 2023, the DEMA International Membership Committee consisted of Jenny Collister, Reef and Rainforest Travel; Terry Cummins, Terry Cummins International Business Consulting; Cassandra Johnson, Breezeway Bubbles Scuba; Dan Orr, Dan Orr Consulting; Arlindo Serrao, Dive Portugal; Peter Symes, X-Ray Dive Magazine (Chair); and Steve Weaver, Dream Weaver Travel.

COMMITTEE OBJECTIVES

The International Membership Committee’s work objectives include: 54

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1. Acquisition of additional international members by: • Developing the use of an Analysis Framework for evaluating where to find the most likely new international members. • Developing a methodology and plan for targeting potential international members from a location to be determined by analysis. 2. Obtaining improved engagement – using a variety of benefits, including the DEMA Rewards program to obtain increased international participation in DEMA Show as well as engagement with the DEMA trade association’s Committees and Board of Directors. 3. Setting goals for international attendance and exhibit space sales at DEMA Show –

developing methods to achieve these goals. 4. Determining a strategic recommendation for presentation to the DEMA Board of Directors.

CONSUMER DIVE SHOW CONNECTIONS

In addition to the four overall Committee objectives, many members of the Committee believe that targeting consumer dive shows staged in other geographic locations may be helpful in increasing the number of internationally located DEMA Show exhibitors. With this point in mind, Committee Chair Peter Symes attended and provided information to the Committee members on discussions with exhibitors from Germany-based Boot Show as well as an overview of information from the UK-based GoDive Show. Both shows are rebuilding from the pandemic. A DEMA flyer was printed and provided to interested Boot Show exhibitors and there was reported interest from some exhibitors at Boot Show to exhibit at DEMA Show. The next step in reviewing these shows is to determine more about from where international acquisition should take place. To assist in this effort, the Committee developed an Analysis Framework to help narrow the potential target locations.

ANALYSIS FRAMEWORK

The Committee looked at several available data points from DEMA Show and Membership data, and ranked data points to determine which would be most useful in selecting a target location. These included: • Location with the greatest number of registered DEMA Show Buyers – this is the “low hanging fruit.” • Ease with which DEMA can reach the targeted audience – what are the obstacles e.g., language barriers, legal issues, cultural differences, etc?

• How can DEMA best build RELATIONSHIPS in the selected target areas? • Given that DEMA, as a US-based non-profit, cannot provide a financial or other benefit to one group to attend or exhibit at the Show, how can DEMA make it easier for international exhibitors and attendees to participate in DEMA Show? • Potential benefits to DEMA for targeting any given country. The Committee also reviewed recommendations from the Center for Exhibit Industry Research (CEIR) on targeting international locations: A. Target territories with a low barrier to entry •

Little-to-no language barrier. It’s much easier for a US-based company like DEMA to use near-identical messages and marketing materials for Englishspeaking audiences in, for example, the UK, Australia, or other similar locales.

•

Close proximity. There’s obviously a geographic advantage of entering foreign markets that aren’t half the world away.

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Similar demographics. Ideally, DEMA’s target audience both at home and abroad should be similar. This rings true when it comes to factors like gender, age, and spending power.

B. Consider the cost and resources involved with expansion, including: • Shipping for exhibit structures or materials • Legal issues, contracts, etc. • Foreign taxes • Translation services (for international social media accounts, multilingual SEO, and so on) 2023 DEMA Annual Report

• New employees (either digital or inperson, including consultants and contractors) • Travel C. Make your market research count by reviewing a target country’s data: •

Economy: Are they on the brink of recession? Or have they been experiencing a recent boom?

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Demographics: Do their consumers mirror DEMA’s?

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Culture: Is the country progressive, conservative, or somewhere in-between? Are there any cultural differences that conflict with DEMA’s brand’s values?

• •

• Number of international companies attending, • International business classifications, • International attendee age ranges, • International attendee - number of shows attended, • Listing of countries from which buyers attended along with percent of buyers from each and percent of members from each.

INTERNATIONAL MEMBERSHIP COMMITTEE FOR 2024

With a framework and data for making the analysis the Committee is now positioned to target Regulations: Are there any legal barriers to at least one country in 2024, while maintaining relationships with those locations that are consider for doing business? currently participating as DEMA Show exhibitors Costs: Will it be cheaper or more and attendees. We look forward to a successful and expensive for operators to exhibit or exciting year ahead! ■ attend abroad? Would costs at DEMA Show be like doing business at home?

After developing an Analysis Framework, the Committee reviewed DEMA Show data, including:

• Number of Retail and Travel Buyers and International Distributors

2023 DEMA Annual Report

2023 DIVING COMMUNITY CHAMPION AWARDS CELEBRATING DEMA MEMBERS THAT UPLIFT THEIR COMMUNITY THROUGH UNIQUE DIVING PROGRAMS

The Diving Equipment and Marketing Association is eager to recognize DEMA-member companies that utilize their recreational diving businesses and positions in the community to make a difference locally or on a wider scale. DEMA has created the Diving Community Champions Award for this purpose. The Platinum, Gold and Silver Diving Community Champion Awards are provided to the top three DEMA-member companies as voted by the DEMA membership. The Awards are presented each year at DEMA Show and help generate public interest in recreational diving by demonstrating that diving can make a difference to communities everywhere. DEMA-member companies from all stakeholder groups have been engaging with others to help one another locally or even globally, 58

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using a variety of activities and we are honored to recognize these efforts! Through social media and other means, DEMA makes a point of letting the entire diving industry and viewing public know about these company-wide efforts! DEMA congratulates the 2023 Diving Community Champion Award finalists: • Dive Pirates Foundation • Jr. Scientists in the Sea • Tim Early Foundation The Platinum, Gold and Silver award winners will be announced during the DEMA Member Update and Annual Meeting taking place on Wednesday, November 15th from 8:30-945 a.m. in Room 391/392 at DEMA Show 2023 in New Orleans, LA. ■

2023 WAVE MAKERS AWARD RECOGNIZING NEW DIVE INDUSTRY PROFESSIONALS MAKING A DIFFERENCE

The Wave Makers Award aims to recognize new professionals who have been working in the industry for five years or less and have made a significant contribution to the industry during that time.

Wave Makers are employees or owners of DEMAMember businesses who have been involved as a professional in the Diving Industry for 60 months or less and who should be recognized for their contributions to the industry, a dive business and DEMA. Nominations must be submitted by someone in a current DEMA member company (self-nominations are not accepted). Member professionals who have been active with DEMA by attending DEMA Show, serving on a committee or task force, or other activities related to DEMA, can qualify. The Wave Makers Award recognizes the top individual as voted by the DEMA membership. DEMA congratulates the 2023 Wave Makers Award finalists: • Jon Brunson, JBO Production, Inc. • Jessica Patterson, Ohana Dive Company • Cynthia Rosselle, One Ocean Scuba The 2023 Wave Makers Award recipient will be announced during the DEMA Member Update and Annual Meeting taking place on Wednesday, November 15th from 8:30945 a.m. in Room 391/392 of the Ernest N. Morial Conventions Center at DEMA Show 2023 in New Orleans, LA. ■

2023 DEMA Annual Report