DEMA Annual Report 2016

Table of Contents What is DEMA? ........................................................................................................................ 4 DEMA Consumer Marketing Committee: Kristin Valette, Chair ............................7 2016 Finance Committee: Tom Leaird, Chair ........................................................... 12 2016 Manufacturers’ Committee: Scott Daley, Chair ............................................ 13 New Professionals Task Force: William Cline, Chair .............................................. 14 Public Policy Committee: Dan Orr, Chair ...................................................................20 Retailer Resource Committee: Scott Taylor, Chair ................................................. 29 DEMA Show Committee: Jenny Collister, Chair...................................................... 33

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What is DEMA? The Diving Equipment and Marketing Association is a non-profit trade association. The association’s activities are all funded by monies earned through the Industry’s participation in the annual DEMA Show, sponsorships, and from DEMA Memberships. Unlike for-profit organizations which typically raise money at trade or consumer shows/events and then funnel much of it AWAY from the Diving Industry, DEMA channels proceeds earned BACK INTO the Diving Industry including market and industry research, handling legislative legal issues impacting the Industry, disaster assistance, marketing and PR programs, and other Industry efforts, all for the benefit of DEMA Members.

Business and trade associations perform several functions. DEMA, as a trade association, provides value to its members by seeking out ways to collaborate from within the Industry and though business outreach; DEMA promotes recreational scuba diving and snorkeling through PR activities, delivers educational programs for members and consumers, lobbies on behalf of the Diving Industry, and performs many other functions. DEMA is a (501 [c] 6) California Corporation.

Description

Worldwide Trade Association for the Recreational Diving and Snorkeling Industries; Includes more than 1,400 member companies 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 on 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: The process of creating and delivering 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 • Research • Appropriate Standards • Creating opportunities for the DEMA community to advance personally and professionally through collaboration

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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 which promote non-commercial diving of all kinds, create new customers, 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: a. Define the universe of divers. b. Determine the rate of erosion among existing divers. c. Determine the number of entry level scuba certifications which take place in the United States and Caribbean each year. d. Seek opportunities to obtain global data on diver certification and participation. e. Provide retail operational data.

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

Committees:

DEMA Committees are an opportunity for qualified DEMA-Member volunteers to participate in the activities of the Association and to have an impact on the effectiveness of the Association. 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.

In 2016, there are several committees helping 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 non-profit 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.

2016 Committee Members Consumer Marketing Committee William Cline Stuart Cove Scott Daley *Doug McNeese Kristin Valette, Chair Finance Committee Mike Hollis Tom Leaird, Chair Tim Webb Public Policy Committee *Jeff Nadler Dan Orr, Chair *Al Hornsby *Carlos Santana *William Ziefle

DEMA Show Committee *Jenny Collister, Chair *Neal Watson *Linda Sue Dingel Manufacturer’s Committee Scott Daley, Chair Mike Hollis

Research Committee William Cline, Chair *Ronny Roskosch

*Not a current Board Member.

New Professional Award Task Force William Cline Scott Daley Stuart Cove *Katherine Brooks *Brittney Butler Nominations Committee William Cline Scott Daley Werner Kurn Kristin Valette Tim Webb, Chair Retailer Resource Committee William Cline *Bill Cole *Davis Graham *Patrick Hammer *Floyd Holcom *Sid Stovall *Scott Taylor, Chair

DEMA's Board Committees are generally determined at the first meeting of the year using an application process. DEMA member companies with an interest in serving on future committees please contact membership@dema.org.

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The 2016 DEMA Board of Directors A1-Manufacturing Scott Daley, Body Glove Mike Hollis, Pelagic

A2-Training Organizations Tom Leaird, SEI, PDIC (Treasurer) Kristin Valette, PADI

A3-Media, Consulting & Non-Retail Services William Cline, Cline Group Dan Orr, Dan Orr Consulting (Senior VP)

A-4, Retailing Seat Vacant Werner Kurn, Ocean Enterprises (Secretary)

A-5, Dive Travel, Liveaboards Stuart Cove, Stuart Cove Diving Tim Webb, Caradonna Dive Adventures (Board Chair)

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DEMA Consumer Marketing Committee: Kristin Valette, Chair The Go Dive Now Campaign

Among DEMA’s primary goals is to develop valuable marketing tools which DEMA Members can use to acquire new customers and encourage previous customers to return to diving. DEMA also seeks to engage consumers directly and drive them into Member businesses.

Using data gathered by the DEMA Research Committee in 2014 and 2015, which included input directly from DEMA Members at the 2015 DEMA Show, the Consumer Marketing Committee developed the Go Dive Now campaign to promote recreational diving by using pay-per-click advertising and advertising on social media sources such as Facebook, Instagram and YouTube.

DEMA launched the Go Dive Now advertising campaign and website on May 24th!

The DEMA Consumer Marketing Committee consists of individuals from the DEMA Board of Directors and from the DEMA Membership. For 2016 the DEMA Consumer Marketing Committee included, William Cline (Cline Group Advertising), Stuart Cove (Stuart Cove’s Diving); Scott Daley (Body Glove); Doug McNeese (SSI); Kristin Valette, Chair (PADI); Laura Walker (Bonnier), and DEMA Staff members Nicole Russell, VP of Operations & Tom Ingram, President and CEO. The Go Dive Now campaign is now in full swing and has generated substantial attention from potential diving consumers.

Here is a sampling of the analytics as of the beginning of October, 2016 (about 120 days into the campaign): • Website Sessions: 106,321 • Unique Website Users: 61,920 • Dive Store Finder Completions: 33,409 • Dive Vacation Finder Completions: 1,060 That’s more than 270 DIVE STORE FINDER COMPLETIONS PER DAY by potential diving customers since the campaign launched! Social media is producing the most traffic to the Dive Store Finder (“Dive Store Finder Completions” are defined as clicking through to locate a dive store). On Facebook alone there have been more than 2.5 million consumer views.

YouTube videos are also receiving substantial attention with many of the views the result of YouTube advertising. As of November 10, the videos have been seen by thousands of potential consumers:

• • • •

Experience the Lifestyle – Video was uploaded on May 25 and has received over 13,000 views.

Learn How to Dive video was uploaded on June 30th and has received over 142,000 views.

Dive into a Bigger World video was uploaded on August 10th and has received over 64,000 views.

Winter Vacation Destinations video was uploaded on October 28th and has received over 10,000 views.

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Who is DEMA Targeting?

Critical to this campaign is the need to target a consumer that will become a certified diver, buy equipment, buy dive travel and liveaboard boat trips, dive locally and return to the retailer for continuing diver education.

To understand this very active diver, DEMA first looked at the demographics and life stage data of more than 470,000 current active divers, then reached out to more than 20,000 additional dive consumers for “behavioral” information. The result was a more complete understanding of “who” divers are, where they live, their family and household situations and their diving activities.

Armed with this incredible data set, DEMA determined that the most productive promotional approach was to reach households like those already purchasing equipment, dive travel, local diving and certifications.

This household targeting approach is somewhat different than perhaps has been used in the past. Recognizing that the dive retailer, and indeed the entire Industry, needs to have access to consumers who are willing to fully engage in the sport (buying equipment, diving locally, traveling to dive and purchasing diver certifications), and understanding that there is also a need to find a younger audience of potential divers, approaching households that look like the ones with currently active divers gives the Industry access to families, including young people in their teens, and affluent adults with time and money to spend and a willingness to get their kids and grandkids involved in diving. These so-called “lookalike” households are the key to growing the Industry in a manner that benefits all stakeholders.

The data points indicate that there are multiple target household types. While these households are similar in some respects, there are also substantive differences, making it possible for DEMA and DEMA Members to select from a variety of targets, choosing households that provide the greatest return on promotional investments, and selecting appropriate neighborhoods near DEMA Member dive centers.

Members can learn more about the profiles of the three target households recommended by the DEMA Research Committee.

Targeting using the marketing information system AnySite, and the predictive data points that help identify these “lookalike” households, DEMA can reach a wide audience effectively while containing costs. Using social media advertising to reach these households also reduces costs, made even more effective because social media sites like Facebook also use AnySite and the segmentation software Personicx for their audience insights targeting data.

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How Does DEMA Locate Target Households?

One of the great advantages of DEMA’s methodology is that the greatest concentrations of target households can be located by postal code, using data from the AnySite/Personicx marketing information system.

To reach a non-diving audience and drive them into those Member stores, DEMA advertises Go Dive Now on Facebook, Instagram and YouTube, using as a basis for the ad location the address of each DEMA Member retail store. DEMA utilizes the Go Dive Now campaign materials and the zip code locations of the target households from the AnySite/Personicx database system, and plugs these into social media advertising.

As consumers click on Go Dive Now ads, they are taken to the Retail Store Finder where DEMA-member stores are listed in first-priority/proximity order. In effect, this means that the Go Dive Now campaign drives consumers directly into DEMA Member stores.

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To implement the advertising effort, DEMA conducted the necessary analysis of each Member retail dive center address and located the target clusters nearby using AnySite/Personicx. A custom report developed with Pitney Bowes, the database manufacturer, reaches out using a drive-time from each store address and reveals the target cluster household locations by zip code.

Zip Code

Cluster 02 HHs

Cluster 07 HHs

Cluster 17 HHs

15001 15017 15044 15090 15102 15106 15108 15116 15143 15205 15215 15216 15217 15227 15228 15234 15237 15241 15243 15317 16046 16066 TOTAL AVERAGE

41 168 812 1,449 122 89 384 86 1,104 86 413 72 921 3 454 101 673 1,121 312 865 331 264 9,871

618 181 484 257 675 150 656 268 286 138 136 177 163 192 313 155 644 319 237 574 466 1,127 8,216

619 403 530 132 1,064 492 1,031 566 251 588 228 534 343 958 372 478 1,128 242 325 728 272 625 11,909

Total GoDiveNow HHs in Zip Code 1,278 752 1,826 1,838 1,861 731 2,071 920 1,641 812 777 783 1,427 1,153 1,139 734 2,445 1,682 874 2,167 1,069 2,016 29,996

2016 Total Households 13,712 7,262 10,251 8,401 12,229 9,143 17,341 5,994 8,395 10,561 5,671 10,915 11,930 12,607 7,163 6,629 17,995 7,877 5,653 15,440 5,717 10,924 221,810

Percent of GoDiveNow HHs 9.3% 10.4% 17.8% 21.9% 15.2% 8.0% 11.9% 15.3% 19.5% 7.7% 13.7% 7.2% 12.0% 9.1% 15.9% 11.1% 13.6% 21.4% 15.5% 14.0% 18.7% 18.5%

2016 Total Population

2016 Per Capita Income

32,169 15,900 27,393 22,692 29,474 19,036 41,265 14,563 20,718 22,306 12,512 23,425 26,757 28,470 16,855 14,537 41,752 20,699 13,206 37,990 14,900 29,747 526,366

$28,720 $45,656 $43,726 $56,198 $35,920 $33,937 $36,600 $36,828 $46,807 $33,989 $45,154 $33,365 $45,112 $28,048 $42,744 $34,743 $41,566 $45,917 $41,344 $37,270 $49,498 $44,880 $40,365

While conducting the analyses, drive times around each store varied but most were conducted using a 30-minute drive.

DEMA’s previous research has indicated that about 95% of the customers from most stores live within this 30-minute drive area. The drive time range can change when there are more or fewer stores in the area, and when there are larger populations nearby the store. In no case did the drive used for the analysis fall below 15 minutes or exceed 60 minutes.

In areas where the population was sparse, the analysis was extended to include at least 100,000 households or 60 minutes, whichever came first.

To maximize the use of limited resources, the number of target households in each zip code was also reviewed and those zip code areas that contained zero target households were removed from the final data charts. In addition, using per capita income as a proxy for affluence in the zip code area, a comparison was made of the average per capita income with the number of target households in each zip code.

Using a statistical decision-making tool, only those zip codes with the best overall household-per capita income scores were retained for advertising purposes. An additional benefit of using this decision-making tool is that DEMA can provide this information to each Member retailer, including the zip codes which attain the highest “scores� (shown in the above chart in yellow highlight). Should they choose to do so, these are good prospect locations for the retailer to conduct their own social media advertising campaigns.

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DEMA Members Use Go Dive Now Materials for Free

All DEMA Members are invited to conduct their own campaigns, tagging onto the Go Dive Now brand for their own stores, and taking advantage of the national attention the campaign has already generated.

In fact, for Go Dive Now to be truly successful, businesses within the Diving Industry must act as “multipliers” of the brand. Without this, the funds for advertising will eventually run out without achieving the campaign’s goal of increasing the number of new divers. Using social media to advertise is helpful in that it is relatively inexpensive as an advertising vehicle, and DEMA has free social media and video resources which can be used to directly benefit Member retailers to help them act in this multiplier capacity.

The Go Dive Now ad campaign has already proven successful in driving consumers to the Dive Store Finder on the website.

The Consumer Marketing Committee invites questions and suggestions to help DEMA Members use the Go Dive Now campaign tools and data to help their own efforts drive consumers to the store’s website. Go Dive Now is already drawing significant consumer attention and using it and the Go Dive Now brand could make a difference in your business’ ability to reach an affluent audience with a desire to become a diver.

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2016 Finance Committee: Tom Leaird, Chair The Finance Committee provides oversight to all budgetary activities of the Association, approves the budget for the fiscal year, and reviews all Association financial transactions.

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

Giving Back to the Industry

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 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, planning 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.

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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.

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

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

The names and addresses of current members of DEMA are located at the DEMA Office at 3750 Convoy Street Suite 310, San Diego, CA 92111.

In 2016, 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 2016, DEMA paid no loans, guaranties, indemnifications, or advances to any officer or director of DEMA.

2016 Manufacturers’ Committee: Scott Daley, 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 composed of 5% of the gross receipts from DEMA Show each year and is used at the discretion of the manufacturers to promote recreational diving. The allocation of the funds follows a Board-approved process, and the Manufacturers’ Committee has been supportive of many different initiatives over the years.

Helping Fund Promotions for the Industry

The Manufacturers’ Fund allocated $145,400 in promotions for the industry during 2016. Programs supported include: • • • •

$67,400 $40,000 $35,000 $ 3,000

Go Dive Now Consumer Marketing Campaign Go Dive Now Pool Tour Retail Retention & Research/AnySite-MicroBuild Subscription Manufacturing Sales Index (MSI)

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New Professionals Task Force: William Cline, Chair DEMA established the New Professionals Task Force in 2016 with two goals in mind: 1. Develop the types of benefits that will encourage new professionals to join DEMA 2. Develop a recognition program to help bring attention to those individuals in the Industry for five or fewer years, and “making waves” of positive change in the Industry while supporting DEMA’s Mission and Goals.

The 2016 New Professionals Task Force included several Board members as well as several professionals who have been in the diving industry less than five years, all from different regions, with each bringing their expertise to the group:

New Professional Task Force Members

Katherine (Cody) Brooks – Texas Dive Center, Houston Brittney Butler – Ascuba Venture, Corpus Christi, Texas William Cline – The Cline Group, Texas Stuart Cove – Stuart Cove’s Dive Bahamas Scott Daley – Body Glove, California Data indicate that most new professionals – those in the Industry fewer than five years – are also younger in age.

Often engagement by these new professionals can assist in bringing in an excited and younger consumer audience.

By understanding the benefits needed by new professionals to advance their careers, and by creating a recognition program for new professionals that also encourages these new persons to be involved with DEMA, the association hopes to also prompt more younger consumers to get into diving.

Benefits that Attract New Professionals

The Task Force determined from data produced by the American Society of Association Executives (ASAE) that people join associations such as DEMA in greater numbers as they progress through their careers. The fact that young people do not join associations does not appear to be new phenomenon tied to the “Millennial Generation.” Rather, joining an association appears to be based on career need and career level; those new in their careers (and typically younger) don’t join associations with the same frequency as when they are further along in their career and older.

Source: ASAE, The Decision to Join. Data indicates that most new professionals are younger.

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This data also indicates that this issue has been the same issue for many generations, with one notable exception confronting DEMA (and all associations) today – this is the first generation to also have easy access to an explosion of online information about their careers and business. As such DEMA must take a different approach to HOW information is provided for EVERYONE, not just new professionals or “younger” people, keeping in mind that some of the youngest will also be “digital natives.”

If joining DEMA benefits a professional’s career or has a direct impact on their financial or work situation, they are much more likely to join.

For DEMA to succeed in getting more professionals to join, the association must consider what is important to these individuals in each stage of their career. This is especially true of new professionals.

The “early-in-career” model addresses several key DEMA issues: • Our desire to bring in more members • Our desire to attract a “younger” professional audience.

• Our desire for new industry members to have “real” industry data – less misinformation.

• Because younger professionals are also likely to attract younger consumers, this approach could also help address this industry issue.

Attracting New Professionals Earlier in their Careers

Most people are looking for more out of their diving career than “just a job.” Today, many who are early in their diving careers have a greater desire to work with organizations that place an emphasis on mission or culture fit – more so than personal income/reward. Many want to have a societal impact as well. These attributes fit well with the professional diving community.

While this task force agrees that the benefits DEMA currently provides are generally appropriate for most Industry professionals, the Task Force wanted to specifically determine the benefits needed by New Professionals.

Such items making data-driven decisions, providing access to marketing and research information to understand their local market, legislative and environmental advocacy, and providing attractive pricing to members for DEMA Show may not be enough.

Research from various association industry resources indicates that earlier-in-career/younger professionals believe the most important functions of an association are: • Providing training and professional development to members (education) • Connecting practitioners in the field to each other (networking) • Representing the field to the public • Providing certification opportunities • Representing the field within the industry DEMA provides some of these benefits now, and emphasizing these offerings may appeal to these new professionals and could be useful in recruiting them.

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To truly understand the needs of new diving professionals, DEMA conducted a Member survey to determine which benefits are most desired, and segmented those responses in several different ways, including by length of time in the Industry.

All Respondents: How important are (would be) the following personal benefits to you when deciding to join DEMA (or renew your DEMA membership)? Rate on a scale of 1 – 5 (5=very important) Top 5 in Red A Conducting marketing campaigns on behalf of the diving industry B. Representing diving within the field (e.g. during industry forums on diving practices or other topics)

3.79 3.62

C. Providing professional/business certification opportunities

3.41

D. Representing the field of recreational diving to the public

4.06

E. Representing recreational diving to government

3.53

F. Creating and disseminating standards of practice (e.g.: manufacturing standards) G. Providing technical information on diving-related business issues H. Reference directory to members/suppliers (electronic or printed) I. Member discounts on DEMA Show – DEMA-Sponsored Seminars

3.28 3.65 3.69 3.70

J. Member discounts on DEMA Show – Registration for Exhibits

3.88

K. Member discounts on DEMA Show – Exhibit Space

3.17

L. Access to products, services and suppliers (e.g., health insurance)

3.63

M. Opportunities to gain leadership experience

2.99

N. Opportunities to network with other professionals

4.10

O. Access to career information and employment opportunities

2.57

P. Professional development/educational programs

3.66

Q. Access to the most up to date diving business information available (research)

4.12 0.00

0.50

Top Five Benefits (All Respondents) • • • • •

1.00

1.50

2.00

2.50

Conduct marketing campaigns on behalf of the diving industry Represent the field of recreational diving to the public Member discounts on DEMA Show – Registration for Exhibits Opportunities to network with other professionals Access to the most up to date diving business information available (research) 16

3.00

3.50

4.00

4.50

New Professional (< 5 years in industry): How important are (would be) the following personal benefits to you when deciding to join DEMA (or renew your DEMA membership)? Rate on a scale of 1 – 5 (5=very important) Top 5 in Red A Conducting marketing campaigns on behalf of the diving industry B. Representing diving within the field (e.g. during industry forums on diving practices or other topics) C. Providing professional/business certification opportunities

3.71 3.50 3.50

D. Representing the field of recreational diving to the public

3.72

E. Representing recreational diving to government

3.28

F. Creating and disseminating standards of practice (e.g.: manufacturing standards) G. Providing technical information on diving-related business issues H. Reference directory to members/suppliers (electronic or printed) I. Member discounts on DEMA Show – DEMA-Sponsored Seminars J. Member discounts on DEMA Show – Registration for Exhibits

3.31 3.50 3.83 3.81 4.08

K. Member discounts on DEMA Show – Exhibit Space

3.69

L. Access to products, services and suppliers (e.g., health insurance) M. Opportunities to gain leadership experience

3.78 3.14

N. Opportunities to network with other professionals

4.19

O. Access to career information and employment opportunities P. Professional development/educational programs

2.86 3.78

Q. Access to the most up to date diving business information available (research)

4.08 0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

Top Five Benefits (New Professionals – Less than Five Years in the Industry) • • • • •

Reference directory to members/suppliers (electronic or printed) Member discounts on DEMA Show – DEMA-Sponsored Seminars Member discounts on DEMA Show – Registration for Exhibits Opportunities to network with other professionals Access to the most up to date diving business information available (research)

In the coming year, DEMA will use this data to encourage new diving professionals and members of diving community at large to get involved with Industry activities and with the trade association.

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New Professionals - Recognition and Award

One area that is known to encourage association membership and participation is developing means of “recognition” and “reward.” The best approach to generating creativity, continued participation and sustained engagement by new professionals is to create a culture that supports that creativity and celebrates innovative thinking.

Recognizing a new professional’s participation in the industry and in DEMA - efforts that go above and beyond the individual’s job, and which recognizes their intent to improve the industry by working with DEMA, will also encourage more new professionals to join the association. In effect, by recognizing the desired behaviors of engagement and membership with the association and engagement in the activities that are important to grow the industry, DEMA is encouraging that behavior.

The New Professionals Task Force recommended, and the Board of Directors approved “Wave Maker” as the name of the New Professionals recognition award.

The Task Force considered that the Wave Maker award should: • Emphasize DEMA’s mission • Recognize new professionals that assume leadership roles early in their career • Be for new professionals working in or owning a DEMA Member company • Recognize new professionals who have made an impact early on to inspire other new diving professionals to also join DEMA and take on leadership roles in the association and industry.

Reaching Out Awards and Wave Maker Awards – What’s the difference?

The Wave Maker Award is different than the Reaching Out Award; the Wave Maker Award is viewed as recognition for an individual having made an impact on the industry early in their career, which, data indicates, most often coincides with the individual being younger, but which doesn’t exclude those new to the profession regardless of age. The Reaching Out Award is analogous to a “Lifetime Achievement” award.

Specific criteria have been developed to guide the award recipient selection process. The criteria determined by the Task Force strikes a balance between being specific-enough to avoid the political, but broad enough to recognize a variety of individuals who are early in their careers. This should help make awarding the Wave Maker Award as objective as possible.

Wave Maker Award Categories: • Industry Service Award • Mission Award • Industry Growth Award Wave Maker Award Criteria This is an individual who has been a professional in the diving industry for five years (60 months) or less, and has made contributions to the growth of the diving industry during the last two calendar years, in accordance with the criteria listed below*. One Wave Maker Award will be awarded annually.

Prerequisites • Employed by (or owner of) current regular – Class A - Member of DEMA. • Has made substantial contributions to DEMA (through committee participation, board participation, volunteer participation, contributing to membership growth, or other activities and described).

Individual criteria: • Significant achievements on behalf of the employing/owned (diving-related) organization.

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• •

Significant service and leadership in diving-related endeavors and additional professional, civic or charitable organizations, going above and beyond the individual’s job. This criterion recognizes the new professionals’ desire to emphasize mission or culture fit, societal impact and other service areas.

Confirmed participation in business or service educational programs that further advance the individual in the recreational diving industry. Examples include, but are not limited to: o Promoting Travel and Diving o Strategic Business Planning o Human Resources Management o Understanding Customers o Retail Information Systems o The Legal Environment of the Diving o Using Internet, Social Networks and Industry other Electronic Marketing Tools in the o Merchandising Control, Buying and Retail Environment Handling o Product Management o Pricing and Selling in the Retail o Trade show selling Environment o Promotions, Advertising, and Public Relations

Guidelines for Review of Nominations Contributions to the Diving Industry and Employing Organization (Industry Service) • • • •

Level of community service and leadership in other organizations (professional, civic and/or charitable) Extent to which nominee’s accomplishments contributed to the growth the diving industry Extent of nominee’s contributions to the employing organization.

Development of Leadership Role

Contributions to DEMA (Mission) • • • • •

Level and amount of volunteer contribution to DEMA Extent to which nominee’s activities improved the membership base of DEMA and the diving industry The extent to which nominee’s activities develop and increase community awareness of DEMA services Development or effort of the individual in a leadership role The extent to which the individual connected businesses in a manner that created a “collaborative advantage” for members of the diving industry

Participation in Educational Content (Industry Growth) • • • •

Growth and professionalism of the Individual Measurable participation in educational content from DEMA and other sources - Variety of topics Credentials earned in educational programs Application of information and knowledge to improve the diving industry

The first Wave Maker Award will be presented in 2017.

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Public Policy Committee: Dan Orr, Chair Each year DEMA establishes a Public Policy Committee which includes DEMA Board members, DEMA Member volunteers and DEMA staff. The Committee works directly with the DEMA Office to review US and International issues, gathers input from Members of the diving industry, and provides input to government officials and organizations via the DEMA staff.

The Public Policy Committee works for the betterment of the recreational Diving Industry, seeking to engage in activities which promote the health of aquatic resources while protecting diver access to those resources, so that we all have a place to dive that is clean and healthy. The Committee encourages activities which protect the underwater environment, and actively monitors legislation and government administrative activities globally to prevent legislation which may adversely impact diving businesses or dive site access.

Legislative advocacy can require a substantial amount of time, but can be well worth the effort. Advocacy provided through DEMA’s Public Policy Committee provides DEMA Members with a direct voice in the legislative process. When DEMA can act or publicly comment on potential legislation which may have a farreaching impact on the diving industry, DEMA Members have the benefit of receiving advance notifications regarding those changes to federal, state, local, or international laws. One of the goals of this effort is to provide such notification in time for Members to also participate in actions affecting these issues.

DEMA monitors and responds to many pieces of legislation, and many are listed in this report. It is important to note that some legislative attempts in the US may be vetoed, may not pass out of the senate, assembly or legislature, or may pass despite DEMA’s or the Industry’s objections. To the extent possible, the Public Policy Committee reports this legislative activity to the DEMA Membership so that they stay informed of issues that relate to the Industry.

The 2016 Public Policy Committee is composed of Al Hornsby (PADI), Jeff Nadler, (PADI), Dan Orr, Chair (Dan Orr Consulting), Carlos Santana (Hawaiian Islands Recreational Scuba Council), William Ziefle (Divers Alert Network), Tom Ingram DEMA President & CEO, and Bob Harris, DEMA’s Legislative Advocate.

DEMA Public Policy Position Statements for 2016

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

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

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

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Employment Practices and 40-Hour Workweek. DEMA supports flexibility in employment practices for all diving businesses. Legislation will be reviewed if it would increase or restrict employment practices for our members.

Employment practices on which DEMA supports increased flexibility include: number of work hours, minimum wages, non-exempt vs exempt employees, rules regarding independent contractor vs employees, and other labor practices.

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

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

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

Workers Compensation Insurance. DEMA supports reforms that simplify the system making workers compensation insurance more affordable while maintaining high quality services to the injured, and supporting our members’ need to access affordable worker’s compensation insurance programs.

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

Scuba Diving and Snorkeling NOTE: There is currently no “Position Statement” on scuba diving and snorkeling. Using CQ Roll Call software, DEMA conducts weekly searches on key words which may impact the recreational diving industry.

Fair Government Practices NOTE: There is currently no position statement on Fair Government Practices.

Using CQ Roll Call software, DEMA scans for recreational activities that may obtain a competitive advantage over recreational diving due to government policy or regulation, or when government policy or regulation creates an undue hardship on recreational diving. When these are revealed DEMA can act in an advisory capacity to government agencies, or can organize the recreational diving community to combat unnecessary regulation.

During 2016 DEMA devoted resources to several issues impacting the diving industry: • • • • • • • • •

Funding for the Management of Invasive Lionfish (Florida) Diver Warning Devices (Florida) FWC Statutes Regarding Shark Feeding (Florida) Workers Compensation (Florida) Department of Labor Overtime Rules (Federal) Federal Employee Attendance at Meetings (Federal) Dredging in Port Everglades (Florida) Toxic Algae Bloom (Florida) Senate Bill 3099, banning shark feeding except for purposes of harvest (Federal)

Funding for the Management of Invasive Lionfish (Florida) Late in 2015 DEMA proposed to create an alliance that included REEF and several Florida Universities. The alliance would work in collaboration with Florida’s Fish and Wildlife Conservation Commission (FWC), and the goal was to obtain funding from Florida’s general revenue dollars which would be allocated for Research, Control, Market Development and Public Awareness/Education.

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In February 2016 DEMA produced â&#x20AC;&#x153;Dive In Day at the Capitalâ&#x20AC;? in Tallahassee, and brought various resources together to help members of the Legislature obtain more information on the critical need to eradicate this invasive species. This included having a volunteer chef who prepared lionfish nachos for lawmakers at the capital, and sponsoring more than 100 Florida middle school children to travel to Tallahassee to learn more about Lionfish. DEMA also made it possible for DEMA-Member diving businesses in Florida to set up displays on the first floor of the capitol building, all to draw attention to recreational diving and particularly to the issue of the need to fund initiatives to remove invasive lionfish.

Unfortunately, in March DEMA received notification that funding would not be made available for the proposed alliance, research or lionfish control efforts, and state funding for controlling invasive species in general would be decreased.

Funding for lionfish in the Florida budget would be limited to the $300,000 given to the FWC every year to help fund lionfish derbies and their control efforts.

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In April FWC approved a two-part lionfish plan ostensibly designed to further encourage removals of the invasive species in 2016. If qualified, participants will have the opportunity to take an additional spiny lobster per day during the 2016 mini-season (July 27-28). FWC also considered allowing the opportunity to harvest an additional bag limit per day of bay scallops during Labor Day weekend (Sept. 3-5, 2016), where population can support harvest. To qualify in the statewide program, participants must remove 50 or more lionfish between Lionfish Removal and Awareness Day (May 14, 2016) and the end of September.

DEMA opposed this plan, primarily because it trades the harvesting of one species (lionfish) for the harvest another, pressured species (Florida spiny lobster). DEMA made suggestions including encouraging the removal of lionfish by reducing or eliminating fishing license fees and other financial incentives. These suggestions were rejected by the FWC. Diver Warning Devices (Florida) In March a bill proposed by DEMA was passed by the Florida legislature, allowing the use of diver warning devices in addition to the traditional dive flag. This was a success for DEMA and the diving industry in Florida, expanding choices and increasing diver safety in that state. The bill can be seen here.

FWC Statutes Regarding Shark Feeding (Florida) In mid-April, a diver spearfishing in Florida was reportedly bitten by a bull shark. The techniques used by the spear fisher included spreading chum on the water, and jumping in to spear the cobia that often accompany the sharks brought up by the chum. The diver, who survived the attack, indicated that there were as many as 30 sharks in the area at the time of the attack.

While spearfishing in Florida is legal, and the technique applied to attract cobia is also considered legal, the question arises regarding the current FWC rules against divers chumming (“feeding”) sharks to attract them for photographic purposes. With this incident DEMA is investigating what may be required to re-open the past discussions of “feeding sharks” for dive trips, versus chumming for sharks for purposes of fishing (spear or hook and line). DEMA will continue to examine the current rules and determine if there is a case for re-opening these discussions with FWC. The shark bite incident and the description of the techniques used to bait sharks for the purpose of spearfishing for cobia can be found here.

In June, federal legislation was proposed by two Senators from Florida, Marco Rubio and Bill Nelson. S3099 would halt all feeding of sharks except for purposes of harvesting these animals. DEMA has already commented on this issue, and additional information on the bill can be found below.

Workers Compensation (Florida) In late April, the Florida Supreme Court declared the attorneys fee provisions of the worker’s compensation law unconstitutional. This is likely to become an issue for the 2017 legislative session.

The Court found that Florida’s current workers’ compensation laws violate the constitutional right to due process by creating an “irrebuttable presumption” that a formula used to calculate attorney fees always resulted in reasonable fees. In the case of Castellanos vs. Next Door Company, that formula would have paid the plaintiff’s attorney at a rate of $1.53 per hour.

“Through the 2009 enactment of a mandatory fee schedule, however, the Legislature has created an irrebuttable presumption that every fee calculated in accordance with the fee schedule will be reasonable to compensate the attorney for his or her services. The $1.53 hourly rate in this case clearly demonstrates that not to be true,” Justice Barbara Pariente wrote in the majority opinion.

The ruling was quickly criticized by business groups like the Florida Chamber of Commerce and the Associated Industries of Florida (AIF, of which DEMA is a member), who said that it would drive up costs in the system.

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AIF called the decision “a significant blow to Florida employers” that will cause a “hefty rate increase for which employers have not prepared or budgeted.” The Florida Chamber has already assembled a “short-term task force” to prepare a “legislative response and remedy” to the ruling.

The court also refused to issue an opinion in another high-profile workers’ compensation case, Daniel Stahl v. Hialeah Hospital, which challenged the Legislature’s decision to eliminate partial disability benefits. That order lets stand a lower court ruling leaving the state’s laws intact.

The Office of Insurance Regulation (OIR) later issued a statement saying that the National Council on Compensation Insurance would have to review the impact of the ruling, although OIR Commissioner Kevin McCarty said that "a legislative remedy will be required to prevent significant increases in rates" for employers.

DEMA will continue to watch this issue closely as it will impact small businesses and increase the already-high cost of workers’ compensation in Florida.

Department of Labor Overtime Rules (Federal) In March Tom Ingram met with a number of California Legislators in Washington DC on the topic of overtime/exempt status issue on which DEMA commented during the summer of 2015. As expected, some were supportive of increasing the exempt threshold to $50,440 from the current $23,660, while others see this dramatic (113%) increase as being too much, especially when compared to the change calculated by increasing the threshold in accordance with the changes in the consumer price index since 2004, when the last boost in this threshold took place.

Ingram met with the offices of the following legislators: • Congresswoman Judy Chu • Senator Barbara Boxer • Senator Dianne Feinstein • Congressman Scott Peters • Congressman Mike Thompson • Congressman Devin Nunes • Congressman Ami Bera The exempt status/overtime threshold rules, as they were originally proposed can be seen here: http://www.dol.gov/whd/overtime/nprm2015/factsheet.htm.

DEMA’s comments in opposition to this proposed rule can be found here: http://www.dema.org/news/250526/DEMASubmits-Comments-Opposing-US-Department-of-Labors-Notice-of-Proposed-Rulemaking-to-Amend-FLSA.htm.

On May 18, 2016, the US Department of Labor released its new rules on the salary threshold for overtime pay. There were some changes made to those originally proposed, but DEMA remains very concerned as these new rules have been established without congressional vote and they more than double the salary threshold below which workers will be eligible for overtime, from its current $455 per week ($23,660 per year) to $913 per week ($47,476 per year). The rule goes into effect on December 1, 2016.

Additionally, the final rule as issued includes a mechanism for automatically updating the salary threshold every three years (a change from the original proposal which included a yearly adjustments). The next automatic update to the salary threshold would be on Jan. 1, 2020, and the new salary level will be announced 150 days before it takes effect. The minimum salary level is set based on the 40th percentile of wages of full-time salaried employees in the lowest wage Census region (currently, the South).

With no changes to the duties test, the basic test for determining who in your organization remains exempt from overtime eligibility under the executive, administrative, or professional exemptions is as follows: 24

• • •

The employee must make over the new salary threshold of $47,476; The employee must be salaried; The employee must perform exempt duties (executive, administrative, or professional).

While DEMA supports the principle of modernizing and streamlining the Fair Labor Standards Act, including the overtime rules, DEMA’s written public comments, filed in September, 2015 expressed our concerns that this rule, as proposed (and as now enacted), contains a threshold which is too high and that the minimum salary level for exempt employees should instead be keyed to government data on regional cost-of-living differences or to the changes in the Consumer Price Index. Such a dramatic increase will create the necessity for many workers in every sector of the diving industry to be re-classified as hourly, increasing costs, with the result being that it will be difficult to allow these individuals to attend educational and technical conferences that are critical to maintaining their expertise and their positions with an employer. DEMA’s comments also pointed out that these rules may cause employers to consider reducing their work forces, and they do nothing to help employers and employees account for the way people work today; the rules discourage the concept of working remotely; they favor elimination of mid-level management and entry-level administrative positions, and they make it more difficult for lower-level employees to climb the professional employment ladder. The rules attempt to create a one-size-fits-all framework in a modern work environment that otherwise rewards flexibility.

Overtime Rules – Legislation that may Block Implementation of the Rules There are now multiple bills in Congress that would delay or modify implementation of the rule.

In September, the House passed H.R. 6094, The Regulatory Relief for Small Businesses, Schools, and Nonprofits Act. This legislation would delay implementation of the rule until the middle of 2017. A companion bill was introduced in the Senate, S. 3462.

H.R. 5813, The Overtime Reform and Enhancement Act, was introduced in July by Rep. Kurt Schrader (D-OR) and would incrementally phase in the new salary threshold over the next three years. The bill would also eliminate the automatic update provision. H.R. 5813 has bipartisan support in the House but has not progressed yet.

Senate bill 3464, the Overtime Reform and Review Act, was introduced by Senator Lamar Alexander (R-TN). This legislation would phase-in the DOL’s new salary threshold in four stages over five years. The legislation includes a “pause year” in 2017 to allow organizations time to adjust for the changes in this rule. Further increases to the salary level would occur annually thereafter, until reaching the final rule’s new threshold of $47,476 on December 1, 2020. The bill also prohibits the final rule’s automatic increases to the salary threshold, yet allows the DOL to propose changes to overtime regulations in the future through the customary notice and comment process.

DEMA is continuing to follow these bills and will issue recommendations to the DEMA membership on support.

Please plan to attend the session at DEMA Show on this very important issue. The session is being held at 1:00pm on Friday November 18, in room S231.

Federal Employee Attendance at Meetings (Federal) In March, while meeting with Legislators and their staff members in Washington, Ingram also discussed the issue of allowing federal employees to attend private sector meetings (such as DEMA Show). Starting in 2012 the federal government implemented a rule which substantially restricted the attendance at these private sector events, and since implementation DEMA Show has experienced a 50% drop in attendance from among employees/personnel from the US Navy, US Army, Army Corps of Engineers, NOAA and other federal agencies. As the military sector is a large customer to many of DEMA’s manufacturing members and others, this is a critical issue for the diving industry overall and certainly for DEMA Show. Federal employees are missing the education on new products, services and maintenance of their current equipment, and DEMA Members are losing revenue from these important sources.

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At this writing the current rule from the Office of Management & Budget (OMB) is that all spending on education and meetings must be held to 70% of 2010 levels, and while DEMA applauds cost containment, this ruling was put into place primarily because of the 2012 incident with the GSA, during which videos of bad government-employee behavior at a conference in Las Vegas surfaced on YouTube (demonstrating again, the power of social media!). The current OMB rule is due to sunset at the end of fiscal 2016, and in Washington, DEMA encouraged the concept of allowing the rule to sunset. Although such rules are unlikely to be completely loosened under a Republican lawmaker majority, many staff members expressed understanding and seemed in favor of relaxing the current rules, allowing more federal employees to take advantage of the education available from the private sector, including DEMA. Dredging in Port Everglades (Florida) In April 2015 DEMA wrote to the US Army Corps of Engineers expressing concerns about plans to dredge the area in the immediate vicinity of Port Everglades Florida. DEMA’s concern is the effect this plan would have on physical damage to the living coral reef in the area as well as the effect of siltation on the local underwater environment and the resultant impact on the South Florida Diving Industry. Dredging is taking place at many ports along the US eastern seaboard, including Miami and Port Everglades, due to the increase in the number of large ships traveling through the expanded Panama Canal.

While we understand that while some detrimental impacts from this dredging project are inevitable and will be permitted due to the physical nature of dredging, DEMA believes that a well-designed and well-managed effort may not significantly impact a large area. However, “well-designed” and “well-managed” must be mandatory.

The Army Corps of Engineers submitted a Final Environmental Impact Statement for the Port Everglades dredging project which indicates that the “turbidity and sedimentation effects associated with the Port Everglades Navigation Project Recommended Plan (will be)…similar to those seen at the ongoing Miami Harbor expansion project.” Further, the Environmental Impact Statement indicates that, “the material disposed in the Port of Miami project is the same type of material being dredged at Port Everglades…and should result in similar conditions regarding associated sedimentation and turbidity generated by the material.”

Dr. Richard Dodge, Executive Director of the National Coral Reef Institute and Dean of the Nova Southeastern University Oceanographic Center, indicates that “it appears that the Port of Miami project has caused negative effects on the environment” (with potential negative impacts on the local diving industry). DEMA is deeply concerned that the Port Everglades project may encounter or create similar issues. Should damage to the natural and artificial reef structures in the Port Everglades area be similar to the damage already found as a result of the Port of Miami project, significant environmental and economic consequences would occur. The loss of revenue to hotels, restaurants, marinas, touristrelated small businesses, as well as to diving businesses could result in the loss of thousands of jobs, and millions in tax revenues to the state of Florida.

DEMA Joins Lawsuit to Require a New Environmental Study In 2016 the Army Corps of Engineers submitted their EIS to Congress for approval, without adjustments to account for the siltation and reef damage problems that occurred in Miami. In June, with a unanimous vote of the Public Policy Committee and the DEMA Board of Directors, DEMA filed a 60-day notice of intent to sue the Army Corps of Engineers over the potential destruction of the close-by living coral reef in the planned expansion of Port Everglades. The DEMA Board has asked DEMA staff to closely monitor cost and must approve all expenditures that exceed the initiallyapproved budget of $12,000. The expansion of the Port is expected to begin in 2018.

Included in the notice of intent are: Miami Water-keeper, the Center for Biological Diversity, Florida Wildlife Federation, Earth-justice and DEMA Member, Sea Experience. The filing states that there is a need for a new environmental review, given the damage caused by a recent and similar dredging operation at the Port of Miami. An environmental estimate made at Miami’s Port prior to dredging operations there, and using the same methodology as used during a preestimate in Port Everglades, indicated far less potential for damage than occurred.

The lawsuit was filed in federal court on August 18, 2016.

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The Army Corps of Engineers has issued a statement which indicated, in effect that the dredging operation would not take place until further consultation took place with National Marine Fisheries Service, with the aim of amending the existing biological opinion (EIS) for the Port Everglades project. The Army Corps indicated that this decision was made because: •

In the original biological opinion NMFS showed that the project may affect endangered coral species, which included staghorn (Acropora spp.) corals, as well as six additional coral species that were proposed for listing as endangered at the time of the opinion. These six species have since been listed. (The original biological opinion determined that the project’s direct and indirect effects on those corals species “will not likely jeopardize the continued existence” of the coral species.)

•

The Corps implemented a sedimentation transport model, designed to identify areas that the sediment from the project might affect. This model showed that the project may affect an area different than the area that earlier assessments and modeling had identified. The incorporation of sediment transport modeling into project planning is a significant difference from the Miami Harbor project, and was outlined in the lawsuit filing.

•

The listing of the six additional coral species, the results of the modeling and the information derived from the Miami Harbor project constitute “new information” in assessing effects to listed species. “New information” requires the Corps to re-initiate consultation with NMFS and request an amended Biological Opinion. As part of this process, and to ensure transparency, we will release any new information to the public though the National Environmental Policy Act process in an Environmental Assessment.

DEMA is monitoring the latest actions by the Army Corps and is continuing with the lawsuit. DEMA will keep Members of the Industry informed as the situation progresses.

Toxic Algae/Cyanobacteria Bloom (Florida) In June, a bloom of toxic cyanobacteria (often referred to in the media as an “algae” bloom) occurred in Florida’s Lee, Martin, Palm Beach and St. Lucie counties. DEMA submitted a letter to Florida Governor Rick Scott expressing concern over the negative impact this bloom will have on the recreational diving businesses in these counties, as well as the reputation of Florida as a premier recreational diving location, and asked for additional action to be taken that will help mitigate future problems.

On June 29, an Executive Order declared the presence of this bloom to be an emergency situation in Martin and St. Lucie counties, and subsequently extended the emergency to cover Lee and Palm Beach Counties. Although it is difficult to measure the direct impact the cyanobacteria bloom will have on residents participating in diving, DEMA expressed concern that the bloom could have a direct impact on the local dive industry economy in aspects of the number of diving travelers, hotel occupancy, and long-term consequences such as the loss of Florida’s reputation as a premier US diving destination.

DEMA’s letter to the Governor of Florida asks that direct and decisive action be taken to address the current situation, and future problems by continuing to work with the federal government on the problem of water storage and discharge from Lake Okeechobee, as well as work to reduce the effects of pollution that includes sewage runoff and discharges from the phosphate mining industry and agriculture, all of which appear to contribute to this year’s need for emergency action. DEMA stressed how Florida’s local recreational diving industry, hotels, restaurants, marinas and other businesses associated with diving activities are all dependent on the availability of quality diving and snorkeling sites.

Senate Bill 3099 (Federal)- Including a Shark Feeding Ban (Federal) During the summer, bill S. 3099 – the “Access for Sportfishing Act of 2016” – was introduced in the US Senate by Senators Bill Nelson (D) and Marco Rubio (R) both of Florida. The bill contains a provision which, if enacted, would prohibit feeding sharks for any purpose other than harvesting them, and would become the law in all federal waters around the U.S. 27

DEMA is actively opposing this bill. The premise on which this bill is based – the concept that “provisioning ecotourism” (introducing small amounts of food in the water to interest sharks for the purpose of observation) - somehow “conditions” sharks to associate swimmers, divers and even kayakers with food – is erroneous.

The bill unnecessarily eliminates the opportunity for thousands of divers each year to actively and safely engage in observing sharks and prevents divers from gaining a better understanding of this creature. Research by independent and credible scientists indicates that provisioning ecotourism does NOT create an increased risk for non-divers and swimmers not directly engaged in provisioning ecotourism activities.

By prohibiting shark feeding for essentially all purposes except harvesting them (killing the sharks), the bill will have a detrimental impact on consumers and on the shark population in the US, and will adversely impact businesses that serve the recreational diving industry, including dive operators, vessels used to transport customers to diving locations, hotels, restaurants and transportation services. The economic effect will be most easily observed in coastal states, but this bill will also have negative effects on dive operators selling travel to any US state or territory where a consumer could otherwise participate in a shark diving experience.

As is suggested by researchers in the 2015 study published in Marine Pollution Bulletin, a better approach than is found in S. 3099 is to implement safe marine interaction practices. Many years ago a group of leading experts in the industry, the Global Interactive Marine Experiences Council (GIMEC), which included operators and scientists, developed safe interactive practices, many of which are incorporated into the experiences used by operators in the US today. Use of the GIMEC Guidelines would be a better alternative to banning provisioning ecotourism, and not denying thousands of US citizens the opportunity to participate in a marine experience that changes the lives of both the citizen and the shark.

DEMA has already submitted comments opposing the bill to Mr. Rubio and Mr. Nelson on behalf of the Industry, including the GIMEC Guidelines. The comments can be found here.

DEMA is following the progress of the bill and has issued an Industry Alert, asking Members of the Industry to write to their Legislators to oppose this bill. DEMA anticipates that the bill will be voted upon following the fall elections.

Dive Flag and Dive Buoy – Public Service Announcements Through the Public Policy Committee, DEMA re-issued its Dive Flag/Buoy Public Service Announcement (PSA) in May. The updated PSAs are available in two time versions; 15 seconds and 30 seconds, as well as in English and Spanish, increasing the opportunities for television air time. The PSA’s are available for Member use on their websites.

•

Divers Down Flag – English 30-second PSA 15-second PSA

•

California Lobster Season – English 30-second PSA 15-second PSA

•

Divers Down Flag - Spanish 30-second PSA 15-second PSA

• California Lobster Season –Public Service Announcements Last year DEMA produced two versions of this PSA specifically for the opening of the California Lobster season. The PSAs themselves remind divers to get their equipment checked and to upgrade their skills to prepare in advance for the lobster season which began in October. The California Lobster Season PSAs are available in two time versions; 15 seconds and 30 seconds, and in English and Spanish.

•

California Lobster Season – Spanish 30-second PSA 15-second PSA

2016 has been a busy legislative year and the trend for active legislation of this sort promises to continue into 2017.

DEMA and the Public Policy Committee recommend that all diving businesses become involved with these important issues.

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Retailer Resource Committee: Scott Taylor, Chair DEMA established the Retailer Resource Committee beginning in late 2014 with the goal of focusing on developing retailer resources and supporting education, access to pertinent and actionable data, and, ultimately, business growth.

The Resource Committee consisted of six retailers of varying sizes and training organizations, all from different regions, with each bringing their expertise to the group:

Retailer Resource Committee • • • •

William Cline – The Cline Group, Texas Bill Cole – Sea Experience, Florida Davis Graham – Texas Dive Center, Texas Patrick Hammer – Scuba Emporium, Illinois

• • •

Floyd Holcom – Astoria Scuba, Oregon Sid Stovall – Ascuba Venture, Texas Scott Taylor (Chair) – A1 Scuba, Colorado

Among the projects for this year’s Retailer Resource Committee were: • Project One: Retail Advertising Survey • Project Two: DEMA Sponsored Seminar Review and Selection • Project Three: Input and Assistance with the Go Dive Now Campaign.

Project One: Retail Advertising Survey

The Retailer Resource Committee, with the input of the DEMA Research Committee, developed an advertising survey for retailers to help the Industry understand more about how much and where retailers advertised to bring in new dive customers.

Many dive retailers do little advertising on their own. Data indicates that more than 60% of retail dive stores spend less than 4% of their gross revenue on advertising. Although the amount spent on advertising varies greatly among all types of specialty retailers, especially those situated in high-end locations (where the location itself acting as a means of advertising), many successful retail operations are known to utilize an advertising budget of between 5% and 7% of gross revenues. Results of the advertising survey indicate that dive stores tend to spend less:

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Data also indicate that few retailers spend anything on â&#x20AC;&#x153;conventionalâ&#x20AC;? advertising, but are more likely to promote their businesses on social media, which is a good cost savings measure. Very few retailers seem to consider paid social media advertising, but it is considered effective when used (although they also spend very little there).

How much do you estimate your store spent on advertising to increase traffic for the following services and activities in 2014? Include ad production and placement costs.

$0.00

$1.00 to $2,500.00

Open water dive classes Continuing education Dive-related overnight travel (all) Local (single day) diving trips Dive club or social activities other than diving (ie: parties or other gatherings) Equipment repair and service

9% 15% 29% 27% 36% 33%

62% 66% 52% 57% 50% 52%

Free Facebook appears to be considered the most effective social medium, followed by paid Facebook advertising, Google + and YouTube.

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How much do you estimate your store spent in 2014 on diving-related SOCIAL MEDIA ADVERTISING? Include production and placement costs.

$0.00

Paid Facebook Advertising Google AdWords Campaign(s) including Google Search, Google Display and YouTube Networks Twitter Advertising Instagram Advertising Pinterest Promoted Pin(s) LinkedIn Advertising Other Social Media Advertising

51% 56% 88% 91% 91% 90% 82%

The complete survey and results are available for FREE to DEMA Members and $250.00 for non-members. Download the survey at: https://dema.site-ym.com/store/ViewProduct.aspx?id=6281172

Project Two: DEMA-Sponsored Seminars

Seminars sponsored and produced by DEMA during the annual DEMA Show are staples of education for members of the Industry. In 2016 the topics and speakers for these DEMA-sponsored seminars were selected by members of the Retailer Resource Committee.

To determine the 2016 seminars and speakers, a rating system was developed and a call for seminar proposals was announced. Speakers who submitted proposals were rated on past DEMA Show performance, on videos they submitted, on the proposed topic, topic outline and description, the proposed seminar’s educational objectives, and the needs of the DEMA Show Attendees.

28 seminars were selected by the Retailer Resource Committee for DEMA sponsorship: Session Title Harness the Power of Mobile

Speaker Ken Countess

What It Takes to Be a Five Star Dive Shop Service Sells — Creating Services That Add Value, Generate Sales and Inspire Happy Customers for Your Dive Business!

PostCard POWER Standout Email Subject Lines — Get Open, Get Read, Get Results You Can Hire a Manager, but You Can't Hire an Owner Keynote Session: Retail Trends and How They Affect Your Business Wowing Customers and Winning Dollars: How to Get Your Dive Shop Customers Off the Internet, Out of Big Box Stores and Through Your Front Door How to Turn Your Website into Your Best Salesperson Social Media 101: Why Use It, Which Channels to Use and What to Say Attracting Talent: Still Haven't Found What You're Looking For? The Eight Essential Elements of Managing a High-Performance Selling Floor 31

Company The Countess Group — Marketing & Communications Tom Shay Profits Plus Solutions Lynn Creative Business Consulting Switanowski Group Larry Mersereau PromoPower Ken Countess The Countess Group — Marketing & Communications Tom Shay Profits Plus Solutions Larry Mersereau PromoPower Lynn Switanowski

Creative Business Consulting Group

Wendi Swanson Ken Countess

High 5 Promotions The Countess Group — Marketing & Communications

Shelli Hendricks Wendi Swanson

Blue Horizon Solutions The Friedman Group

Session Title Speaker The Business of Dive Travel — Enhancing Sales Efficiency between Kenneth Knezick Suppliers and Sellers of Scuba Diving Travel The Power of Video Marketing — YouTube, Vimeo and More Ken Countess Developing Talent for the Future “Can I Help You?” “Are You Finding Everything All Right?” and Other Retail Tragedies How to Be Successful with Google Adwords CUBA: Bottom Line and Bottom Time Youth Engagement in Diving: An Invitation to the Next Generation Dinosaur Wisdom Navigating the Waters of Payment Processing: Understanding What You're Paying to Take Money, and Learn How to Pay Less Effective and Time-Saving Strategies for YOUR Online Marketing The Best Free Social Media Tools for the Dive Industry Stop. Think. Manage!

New Department Of Labor Overtime Rules and How They Impact Your Business How to Organize and Sell Group Trips How to Acquire and Use Online Reviews in the Dive Industry The Current State of Shark Dive Tourism: The Good, The Bad and the Future Lionfish Update and Panel Discussion

Shelli Hendricks Wendi Swanson

Company Island Dreams Travel The Countess Group — Marketing & Communications Blue Horizon Solutions The Friedman Group

Wendi Swanson Amy Houghton Warren Angela Cowan

High 5 Promotions Cuba Scuba

David Fellman Clifford Devereaux Amy Houghton Warren Steve Huskey David Fellman Bill Ford

David Fellman & Associates Desormais Management, LLC

Steve Weaver Steve Huskey Rick MacPherson Panel

NAUI Worldwide

Cuba Scuba High 5 Promotions David Fellman & Associates SESCO Management Consultants Dream Weaver Travel High 5 Promotions Sustainable Shark Diving REEF, DEMA

Project Three: Input and Assistance with the Go Dive Now Campaign

In September, the Retailer Resource Committee and local DEMA Member retailers within 150 miles of San Diego were invited to attend the third quarter DEMA Board meeting. The objective was to gather feedback on the Go Dive Now Campaign which had been launched in May. Several members of the Committee attended including Committee Chair Scott Taylor, Bill Cole, Davis Graham and Floyd Holcom.

Retailers and DEMA Board reviewed the current advertising program, including the ad images and messaging, as well as three videos meant for use by DEMA members to help “multiply” the Go Dive Now message and promote the brand.

The Retailer Resource Committee made the following recommendations: 1. One of the videos should be modified to ensure that it points potential consumers to the dive center using the video, rather than to the Go Dive Now Retail Finder. This modification has been made.

2. DEMA Staff must conduct programs at DEMA Show which take potential Go Dive Now users through the stepby-process of using the campaign materials, including how to download the materials from dema.org, how to select the ad locations near their retail store, and how to post the ads on social media. These educational programs are being conducted at DEMA Show 2016.

For 2017 the Retailer Resource Committee will continue assisting the Industry in supporting education, providing access to pertinent and actionable data, and, ultimately, business growth.

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DEMA Show Committee: Jenny Collister, Chair A New DEMA Show Schedule

Under the direction of the DEMA Board and Show committee, DEMA staff worked with venue contacts to adjust the schedule of DEMA Show from a Wednesday-Saturday show to a TuesdayFriday Show. The new schedule will begin with DEMA Show 2021 as follows: DEMA Show 2021* DEMA Show 2022* DEMA Show 2023*

November 16-19, 2021* Las Vegas Convention Center South Halls Las Vegas, NV November 1-4, 2022* Orange County Convention Center South Halls Orlando, FL November 14-17, 2023* Ernest N. Morial Convention Center Halls G-J New Orleans, LA

Security Plan

Considering recent events in areas near the staging of DEMA Show, the Board approved a new security plan beginning with DEMA Show 2016. To increase the safety of DEMA Show registrants DEMA will begin implementing additional security measures, including bag checks and added local security presence.

DEMA Show Among Top 250 Shows!

DEMA Show was once again recognized as being one of the top 250 tradeshows in the US in 2015 by Trade Show News Network. The Show Committee thanks all who participate in DEMA Show, making it possible to help keep costs down for everyone!

DEMA Show Timing and Location Selection

DEMA Show locations and timing are determined using Attendee and Exhibitor surveys as well as by researching convention center and hotel availability. DEMA Show is one of the 250 largest trade shows in the United States and as such, there are a limited number of convention facilities large enough to hold the annual event. When evaluating and selecting the convention facilities, city, and hotels, DEMA uses Board-approved criteria including: • The city must have cultural or entertainment attractions and special event venues appealing to the diving professional. There should be a variety of restaurants and other entertainment within a 10-minute walking distance of the host hotel/convention center.

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

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

• The convention facility must meet DEMA’s exhibit and meeting space requirements, and be in a location convenient to major hotels, an international airport and city points of interest. The minimum conventions center size is 500,000 gross square feet.

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

• There must be first-class hotels convenient to the convention and exhibit facility for 10,000 attendees. Hotel facilities should accommodate a minimum of 1,200 to 1,400 rooms peak night pick up, with 6,000 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.

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