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May 2020    Download the Entire Issue (PDF) Vol. 35, No. 5   RSS Feed for Undercurrent Issues
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Tough Times in the Dive Travel Industry

resort and boat owners to tell us how they are managing

from the May, 2020 issue of Undercurrent   Subscribe Now

Even if we manage personally to dodge COVID-19, few of us will escape the financial ramifications of the coronavirus crisis. With more than a hundred countries enforcing travel restrictions, it's not just losing of money we might have laid out on trips: Many people have lost their livelihoods.

With cruise liners docked for months ahead, countries locked down, and far fewer flights, the travel industry has been particularly hit -- and the dive travel industry even more so. Why? Well, when you consider that their income has disappeared, it's apparent that, unlike big corporations, many dive businesses might not be able to weather this storm.

After we spoke with Peter Hughes, a previous leader among liveaboard operators, who expressed the thought that he was happy to get out of the travel industry when he did, Undercurrent wrote to some of the dive centers and liveaboard operators in the remoter parts of the world to ask how they were coping. (Peter reckons his old Dancer Fleet partner who now operates MY Galapagos Sky has enough resources to survive and has his fingers crossed for him.)

In La Paz, Baja California, Luke Inman (Cortez Expeditions) told us that his few staff remain and receive their salaries, and meanwhile, he will offer discounted eLearning courses, workshops, and online conferences. James Curtiss (The Cortez Club) was more specific, saying, "As you can imagine, this is not only the worst ever scenario for a traveling scuba diver, but even a worse one for an owner of a dive resort where no one is allowed to travel, nor is there even an indication of when travel will reopen or when travel bans are to be lifted.

"It is my opinion that with being so close to the U.S., this will largely depend on Americans, and I am hoping and optimistic that this will change sometime in mid- to late May 2020. Some centers will suffer more than most and be forced to close their doors and may find ongoing costs too much of a burden to absorb and have no alternative but to declare bankruptcy.

"The sad and unfortunate outcome is that so much fear has been instilled into each and every one of us that we may never see international travel go back to what it was once before by most nations."

Alison Dennis runs a small business out of her island Cozumel home (Scuba with Alison) with two full-time employees and herself. With one boat, two pickups, and an SUV, she owns enough tanks and rental gear to suit up eight divers, the maximum load on her fast boat. She has no debt, she told Undercurrent, but "I do have a financial obligation to pay salaries and the mandatory government medical insurance for my two employees. They also rely on tips to feed their families and dependents."

It's not the case with some other dive centers on the island, she says. "I think that when this is over, some dive operators will throw in the towel and find something else to do. This may be a great opportunity for someone who wants to buy a small dive operation in the paradise of their choice when this is all over. Their workers are just out of luck. A lot of lower-paid employees are trying to sell belongings on Facebook to feed their families."

We may never see international travel go back to what it was once before.

In Indonesia, times are just as hard. Mike Veitch, who, with a partner, runs Underwater Tribe in Bali, wrote, "As you can imagine, we have a lot of fixed overhead such as staff salaries every month, and without tourists, it makes it difficult. We are still paying our staff full salary and medical coverage, so we are happy to support their families at this time. Of course, who knows how long this will go on? As you can imagine, we have run only our daily Bali trips, but also group trips throughout Indonesia on liveaboards and resorts, and it's very difficult to predict if those will happen or not.

"We are keeping ourselves and our staff busy with social media. We have trained our dive guides to help out with our Instagram account and interact with fellow divers and photographers out there. As guides, they know marine life very well and are happy to spend the time doing so. This helps our social media stats, which is, of course, important. We are also taking the time to create more work online. We are offering 'One to One' underwater photography coaching sessions via the net.

"I know that a few dive centers in Bali have closed their doors temporarily. I don't think any have gone out of business. However, many have laid off staff or put them on half time/half pay. With Indonesia being closed to tourists and a local ban on diving, there is no business. Everyone throughout Indonesia is highly affected by the global situation. Once we hit mid-May is when things will start to really hit home and re-evaluate what is in store for the rest of this year, or even next."

Palau had no cases of COVID-19 at the time of writing, but that was because the government acted in a timely manner to stop all incoming flights from anywhere. Tova Harel, who runs Fish and Fins and the Ocean Hunter liveaboards with her husband Navot, told us they do not have any business at all and are just waiting for it to be over.

Fiji, too, seems to be getting off lightly, with few infections thanks to a government that acted swiftly and decisively. Mike Neuman, the owner of Beqa Adventure Divers, wrote to Undercurrent, "We are managing. The government has put the country on lockdown, so we're not even getting any domestic business -- but hey, not complaining, as the government is doing an admirable job and we feel quite safe. The big question, of course, is, 'How can we reopen our borders to tourists and potentially expose our population to the virus? Is it only once there are a vaccine and/or cure and/or immunity IDs?'

"It'll all likely happen gradually and at much lower volumes, and with that in mind, we will shortly be forced to let some staff go so that we can continue to support the others with a bit of money now and a full job later. So far, the government is assisting the redundant staff of tourism operators, which means now the situation is not desperate -- but that is not an open-ended policy, and with tourism being 30 percent of GDP, we're most likely looking at some very tough times ahead. The only good news is that commercial fishing volumes must be down too."

Stalwarts of Diving Tourism are Affected

The Cayman Compass reports that 80 percent of Cayman Islands Tourism Association members' businesses are closed. That doesn't augur well for dive centers. We wrote to several but got no responses so far. Looking to exist on the domestic economy, restaurants are getting a financial shock. As one owner said, "A $55 steak cannot be $55 anymore." Prices must become more realistic of future visitors' reduced spending power.

One of the longest established dive businesses in Grand Cayman, Don Foster's dive shop has been forced to close, and they will sell their six boats. The CDC's extended ban on cruise ship travel was "the final nail in the coffin," owner Mervyn Cumber told the Cayman Compass. He said many of the smaller operators were also struggling to survive, and he expects more to go out of business in the coming weeks.

Grenada, home of one of the Caribbean's best wreck dive, the Bianca C., is under curfew with everyone confined to homes. All the ports are closed, flights have stopped, businesses are closed, and no diving is allowed. Peter and Gerlinde Seupel, who run Aquanauts Grenada, say they are sitting at home, planting their garden and watching their veggies grow. The usual online work carries on, rebooking, cancelations, and refunds. There are 21 known cases on the island, and they don't know when Grenada will open for business.

The big question, of course, is, "How can we reopen our borders to tourists and potentially expose our population to the virus? Is it only once there are a vaccine and/or cure and/or immunity IDs?"

Trapped in Germany by the cancellation of flights, Rolf and Petra Schmidt, owners of Sinai Divers on Egypt's Red Sea, said they had never been away from their business so long in 38 years. Meanwhile, a task group of employees who live in Egypt are getting all the dive center's equipment cleaned and maintained and the garden watered, ready for them to return when flights are reinstated.

Imagine Being Isolated Somewhere Really Remote

There's nowhere more remote than New Britain in the Bismarck archipelago of Papua New Guinea, and Max Benjamin of the Walindi Plantation Resort, MV FeBrina and MV Oceana, wrote to Undercurrent to say he was pleased with the article about COVID-19 and the dive travel industry in the April edition.

He told us, "We are in hibernation -- for how long? We have no idea. While we hunker down and implement austerity measures, we continue to take future bookings, but when the future will start is difficult to predict. With all of our revenue gone for the foreseeable future, we are in a very difficult position of not being able to afford to keep our staff (in excess of 110) employed, and previous loyal guests have donated via GoFundMe page to help with bare necessities during this extremely testing time. We have been overwhelmed by their generosity."

Another Max, Max Ammer, was one of the first to set up in business in Raja Ampat, one of the more remote dive areas in the world. He developed the Kri Eco Resort, followed shortly after by Sorido Bay, on Kri Island. A resourceful man who originally built his resorts using only local materials and labor, he survived the long haul of business from the days when nobody had heard of the area nor had any desire to go there. He recently wrote in the Bird's Head Seascape blog: "Right now we are focusing on some of the most urgent maintenance issues. We expect it to be six months before we have any business to speak of." His staff is building new catamarans as dive tenders. They don't have to be particularly fast, as Kri is at the epicenter of the good diving in the area, with the confluence of several currents, so the best iconic dive sites are nearby. One of the three new boats will be electrically driven.

The doomsday scenario is that COVID-19 proves to be the death of the international tourist industry.

The Indonesian Liveaboards Association issued a letter undersigned by the owners of more than 40 vessels stating they could not afford to refund customers nor allow rescheduling without the possibility of additional fees. In it they said, "We expect our boats will be sitting empty for at least six months (or more), and we cannot afford that 40 percent (or more) of our trips in 2021 will be filled with rescheduled guests who do not generate income in 2021.

"Our fixed costs for salaries, marketing, boat maintenance, yearly mandatory dry docking, fuel, and insurance continue to accrue, creating huge losses expected by end of this year. All of us have dedicated and loyal crew on our ships. They and their families depend on us, since unemployment benefits do not exist in Indonesia. Therefore, we continue to pay their salaries or otherwise support them financially. If bookings do not resume in the summer or second half of 2020, many of us will be forced to shut down our businesses."

Elaine and Simon Wallace, the British owners of the Oasis Dive Resort & Spa at Bunaken, North Sulawesi, told Undercurrent they left on March 20 on the last flight from Manado. "We left behind a small luxury resort and around 80 full-time team members, all of whom were undoubtedly concerned about their continuing employment. With no revenue coming into the business, our survival meant that difficult decisions about staffing and salaries needed to be made. We proposed that all team members would work fifteen days per month, for which they would be paid 50 percent of their salaries so that we'll be ready to welcome international tourists when they return.

"In the end, we ducked/fudged/avoided the long-term thinking in favour of a medium-term solution: we would maintain the status quo described above until the end of September, by which time we'd hope to have a much clearer idea of if, or when, the dive travel industry would be getting back to some semblance of normal. We gave the staff the reassurance of continued employment until 30 September.

"The doomsday scenario is that COVID-19 proves to be the death of the international tourist industry. If that's so, and if there's little hope of any likely resurgence, then 2020 might be our last year of operation. But we don't believe it will play out this way: we think that travel and tourism may look very different in the future compared with what we've been used to."

Meanwhile, the Indonesian government has banned both international and domestic flights through to June.

Some Dive Operations Will Not Survive

In the Mediterranean, Pete Bullen, a Brit who runs Gozo & Malta Photo Safaris, wrote, "A lot of people in my Facebook feed are complaining about lockdowns. They moan about civil liberties being infringed; they suggest that people die every day anyway. Let's all get a grip, stop being selfish, stop kidding ourselves that this is just some bad flu. Let's try and get this thing properly under control by doing what is clearly working where the strongest measures have been put in place. There are 56 licensed dive centers on the islands of Gozo and Malta. In the next few months, there will be some very cheap dive gear being sold off as they go broke."

Cline's Diving Industry Special COVID-19 Survey reveals 24 percent of businesses surveyed said they would suffer significant impact on their businesses with zero or near-zero income within the next two months, while 23 percent said the same for the next three months. Five percent expected to go out of business. Seventy-two percent of businesses surveyed were based in the U.S.A.

Many Undercurrent subscribers who can afford to, have written to say they are happy to write off the deposits they have paid as a way of supporting their favorite dive businesses abroad, on the assumption that this money will go toward supporting the staff of those businesses. After all, it's the people that we remember when we visit.

- John Bantin

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