Lydia Geerlings from New Zealand, diving in the Cayman Islands.

Photo: Justin Uzzell

It’s tough to stay on top.

Or to stay underneath - in the case of Cayman’s diving industry.

According to many who have been around the diving scene here on the Islands for decades, the game has changed. And Cayman hasn’t always been able to keep up.

“Our competitors in the Caribbean and worldwide have learned their lesson from our success and are going quite well,” said Ron Kipp, who owned Bob Soto’s Diving operation from 1980 to 2005.

Competition from other dive sites is just one of the many challenges facing the Cayman Islands dive tourism product as it moves into the second decade of the 21st Century. Many of these factors are outside the industry or even the country’s control.

The recent international economic decline, as well as a series of natural and man-made disasters over the past decade has led to a drop in tourism-related travel and spending. Other problems are more internally driven, such as the question of how the diving product fits in with the plethora of heretofore unavailable options for visitors to Cayman.

And overarching all is the concern about diminishing coral reefs and increasing ocean temperatures, both of which affect the quantity and variety of underwater life upon which the diving industry depends.

There is some good news: Cayman remains one of the easiest and safest places in the world to learn how to dive. It is blessed with deep water close to shore, which means there are a number of spectacular close-in dive sites that visitors don’t need to take a boat to reach. There are virtually dozens of viable shore dive sites all around Grand Cayman.

The warm, calm and clear Caribbean waters make navigation easier and underwater visibility top notch. Cayman also does not have as many problems with over-fishing on local reefs or the horrendous pollution that has paralysed reefs and marine life in south Florida or other parts of the Caribbean.

“There are still beautiful areas all around,” said Cathy Church, an internationally renowned underwater photographer who moved to Cayman in 1972. “The physical joy of being in the water will always be there. Every time I dive I see something new.”

But many, including Mrs. Church, also believe diving in the Cayman Islands may have seen its best days and that the industry will have to paddle hard and receive some help both economically and environmentally, to stay afloat in the coming years.

“The pie is only so big and you can cut it into so many small pieces,” said Peter Milburn, an independent dive operator here since the late 1960s. “It’s not necessarily a growth industry anymore.”

The state of play

Tough economic times of late have hit every corner of Cayman’s tourism industry hard and diving has not escaped.

Those in the industry said a double-whammy of increased costs and declining stay over visitors in recent years made it tough.

According to the Department of Tourism, Cayman had its best single year for stay over arrivals within the past decade way back in 2000, when more than 354,000 visitors stayed here.

That number has fluctuated over the years, plunging to 167,000 in 2005 in the wake of the disastrous Hurricane Ivan – a Category 4 storm that devastated Grand Cayman in September 2004.

Stay over arrivals bounced back above 300,000 in 2008, but fell last year to below 272,000. So far this year, the numbers are trending back up slightly.

With falling air arrivals in 2009 came an increase in fees for things like employee work permits and business licences.

Annual permit costs went from $1,700 to $3,000 for tourism industry management posts. Most lower-paid categories of permits in the tourism industry went from $500 per year to $750 or $750 to $1,000 per year.

Petrol prices on Grand Cayman peaked at more than $5 per gallon in mid-2008 before falling back to just above $3 per gallon. But those costs crept up again to close to $4.30 per gallon in early April of this year.

“So we have fewer people, a lower revenue stream and costs have gone up like 30 per cent,” said Nancy Easterbrook, co-owner of DiveTech in West Bay. “If you look at prices in other Caribbean destinations that would compete with us, you can buy a package for $500 that we’re trying to sell for $1,500.”

Mrs. Easterbrook said many Cayman Islands operators are forced to price their products at or near cost just to compete.

“We’re not getting the price we need for long term sustainability,” she said.

Worldwide, revenues for the diving industry fell in 2009.

A dive industry survey undertaken by William Clein revealed the average decrease in gross revenues across all businesses for the third quarter of 2009 was down 7.4 per cent compared to the same period in 2008. Retailers were hit the hardest with a decrease
of 8.8 per cent.

New certifications were down also, with retailers posting an average decline of 9.3 per cent and independent instructors decreasing in terms of certification by 16.3 per cent.

The number of work permits for dive instructors in the Cayman Islands fell from 253 in January 2009 to 202 in November 2009; a clear economic indicator that the local dive industry is shrinking as well.

How much of that shrinkage is due to macroeconomics and how much is due to local and international interest in the sport is debatable. But one thing is clear: the level of competition for dive operators has grown exponentially in the last 15 to 20 years.

Much like in the world financial services industry, the Cayman Islands has discovered it is no longer the prettiest girl at the ball.

“With travel opening up around the world, there was a lot more opportunities for people to get to more exotic places,” said Rod McDowall, operations manager of Red Sail Sports in Grand Cayman. “So where there used to be a lot of repeat business here, you kind of started to lose that.”

“All of a sudden now, they have the ability to go to southeast Asia or the Mediterranean or the Red Sea.”

The nature of the business changed in Cayman over the past 30 years as well. Mr. Kipp said that many of the dive-oriented hotels that were booming during the 1980s, among them, Cayman Islander, Sleep Inn, Indy Suites and Cayman Diving Lodge are all gone.

Very few hotels that cater specifically to the diving crowd are left on Grand Cayman, Mr. Kipp said.

Mr. McDowall put it this way: “Divers just aren’t as hardcore as they used to be.”

“In the 80s, you had groups that came down, they were here to dive and that was what their vacation was about. Now it seems like with families and the variety of opportunities on the Islands to do other things, they want to come down for a six or seven night stay and only dive two or three times.”

Mr. Milburn believes that diversification on Grand Cayman should be looked at as an opportunity for the diving operators.

“A lot of my divers golf,” he said. “They dive in the morning and then go golfing in the afternoon.”

“We should have a very big golf tourism factor here. Bermuda has, what, nine or ten golf courses and they’re full year round. One (public) golf course is not going to cut it.”

Mr. Kipp said he believes sales of discount packages for a stay over dive and golf holiday could work, but it would require marketing and support.

“The government would have to make a change in philosophy and reinstate diving as a core market, not just a niche market,” he said.

Conservation

Another phenomenon that has affected the diving industry everywhere is the relatively rapid degeneration of the coral reefs due partly to the growth in algae from pollution, and partly due to a process known as acidification – the increase of carbon dioxide in the ocean waters.

Underwater algae make it next to impossible for juvenile corals to establish themselves and grow. Coral reefs will not form in areas overrun with algae.

Greenhouse gasses, some of which seep into the oceans, interfere with the ability of corals to produce calcium carbonate - to grow. That occurrence is known as acidification.

While your typical open water diver may not care as much about seeing corals as they do about seeing a variety of marine life, it is the coral reefs and the nutrients they provide that draw those fish to diving areas.

The degeneration of coral reefs in Cayman within the past 15 years is well documented.

A long-time Cayman Islands underwater observer, Mrs. Church said there is really no comparison between what she was taking photographs of in the mid-70s and what she is able to find now.

“It is heart-breaking and it’s like this all over the world,” she said. “The (carbon dioxide) levels in some areas are so great that (corals) can’t maintain their carbonate structures. So they’re dissolving. The sort of things that start to take over is jellyfish.”

Reef degeneration has occurred over the past decade in Grand Cayman and in the Sister Islands.

Mrs. Church said it’s not just a concern for the diving industry.

“If you lose your coral reefs, they degrade,” she said. “As they degrade you have storm waves, storm waves come closer and closer onto shore and cause more damage when they hit shore. I’m talking longer-term, but long-term might only be 100 years or so.”

Department of Environment Assistant Director Tim Austin said Grand Cayman is down to about 15 per cent healthy coral cover around the Island. The first study of coral cover done here in the mid-90s put that number in the high 20s or even 30 per cent in some places.

But Mr. Austin said, compared with the rest of the world’s coral reef losses, those figures are pretty good.

“What gives us a lot of advantage is we don’t have a lot of other social pressures that reefs have in the poorer parts of the Caribbean,” he said. “They’ve been very heavily fished or polluted by poor water quality practices. Our reef recovery potential is greater.”

Of more concern locally, according to Mr. Austin, is the prominent use of septic tanks on Grand Cayman.

“The water table is very close to the underlying ground level,” he said. “Anything that gets put into the ground eventually makes its way into the marine environment.”

That nutrient rich soil seeps into the water around the shore and leads to growth of seaweed and the like.

“They call it the ‘island-halo’ effect, because all the water comes out at about 30 feet around the Island and you start to see this noticeable difference in algae makeup where these waters are exiting,” Mr. Austin said.

Luckily, Grand Cayman has not seen a massive proliferation of algae in one or two coral reef areas. However, Mr. Austin said there has been an across-the-board increase in algae growth around Grand Cayman.

“That may just be an artefact of declining coral cover,” he said.

Scientists at the Central Caribbean Marine Institute on Little Cayman have documented a rebound in coral cover, even with a significant reef “bleaching” event that occurred in October 2009.

Bleaching of coral reefs occurs when the ocean water temperature reaches around 29.5 to 30 degrees Celsius and the ocean waters are still and calm enough for the sunlight to filter through to the shallow water reefs. The existing corals in those areas will bleach white and die in a matter of weeks.

Little Cayman re-searchers found a 28 per cent coral reef cover on 10 sites there in 1998, which had dropped to about 16 per cent by 2004. Today, coral reef cover at five of those sites is back above 21 per cent.

“We haven’t seen a further decline since 2004, and that’s really, really good,” said CCMI Research Associate Amber Little. “Reproduction is happening, juvenile corals are growing.”

CCMI scientists, as well as the Department of Environment on Grand Cayman, are keeping a close watch on another menace to the diving industry – the lionfish.

The voracious predator, virtually unheard of before the middle part of this decade in the Caribbean, hit Cayman with a vengeance last year.

Mr. Austin said divers have caught more than 1,000 of the creatures and more than 300 local volunteers have been trained to catch the fish, which can now legally be eaten in the Cayman Islands.

The Department of Environment is now working on a comparative study in Grand Cayman to determine whether the proliferation of lionfish has adversely affected the population of other marine species that are potential prey. They won’t have the results back until later in the year.

CCMI Marine Biologist in residence Flower Moye, was in the Bahamas for the first Caribbean lionfish invasion in 2006, said the creatures are definitely here to stay.

“But they’re still in our grasp to be controlled,” she said.

Accumulating interest

Another issue somewhat beyond the control of the Cayman Islands diving industry is the general perception that interest in the sport itself – from an international perspective – has peaked.

Former Cayman Islands Tourism Association President Steve Broadbelt – who also owns Ocean Frontiers diving operation in East End – said last year that the average age of the world’s certified divers was increasing.

“We need to do more to make it interesting for the younger crowd,” Mr. Broadbelt said, also lamenting the fact that so few Caymanians appear to have taken an interest in diving.

Mrs. Easterbrook, of DiveTech, knows the feeling. Her company employs 16 dive instructors – the majority of which come from outside the country.

“It doesn’t seem to be an industry that we have much success in attracting locals to,” she said. “It’s not the best-paying job in the world…and you also have to work weekends, holidays. Our busiest days are Christmas and Easter.”

Diving is also a lot of work for trainees, who are required to study a manual that’s hundreds of pages long as well successfully complete mathematical calculations involving depth and pressure to gain open water dive certification.

“You can go skiing tomorrow, just strap on a pair of skis and, well, maybe they won’t start you from the black diamond run, but you can just go,” Mrs. Easterbrook said. “We’ve always tried to make it surreal and quite and relaxing, all the things the young kids have no interest in.”

Mr. Kipp believes competition from other “extreme sports” such as snowboarding, skiing, bungee-jumping and kayaking and many others also cut into the diving industry’s market. But he said, by and large, those industries today have also leveled off as far as general interest.

“The kids today don’t want to get off their fannies in front of the TV video games and actually experience the real thing,” he said. One issue that frequently comes up in marketing Cayman’s dive industry is who will pay and how much will be allocated.

Mr. Kipp said this is another area where the changing face of the local dive operators has played a role.

“A lot of little dive operators – one boat and one or two guys, in my opinion very undercapitalised – got into business (in the late 80s and early 90s) via Cayman fronts. Some of them survived and some of them didn’t.”

“The big guys – Bob Soto’s diving, Parrot’s Landing, etc – they’re gone now,” Mr. Kipp said. “And no one is spending the money to promote in the North American marketplace and that’s what it took.”

Mr. Milburn, one of the self-professed “little guys” in Cayman’s diving industry said he believes the future of the business here is with smaller local operators.

“The days of the big operators, and I don’t want to tick anyone off here, but I think their days are numbered,” he said. “The trend now is that people are moving toward the smaller dive operators more and more.”

“A slightly disturbing trend is that we’ve got so many new smaller operations starting up all of a sudden. The downside of that is…the pie is only so big.”

Mr. Milburn and other dive operators said one area the Cayman Islands government could assist the dive industry in is the quick passage of the long-debated Environmental Conservation Law.

“If we don’t protect what we’ve got…let’s face it; the environment is the only thing we’ve got to bring people here.”

Another major project that tourism industry officials believe will be a major boon to the dive industry is the sinking of the USS Kittiwake to form an artificial reef in the Cayman Islands.

The planned wreck dive was described by Mr. Broadbelt as “the best thing we’ve done since Stingray City” for scuba divers and snorkellers.

Mrs. Easterbrook is the project manager for the Kittiwake effort. The wreck is scheduled to be sunk here in July.

“Government has done a tremendous amount of support on the Kittiwake project. I guess any business could say it always wants more from government,” she said. “Our advertising budget has decreased a lot, but it’s just a matter of where you want to spend limited resources.”

“We don’t have enough money to promote golfing and diving and boxing and skateboarding and honeymoons and leisure and, and, and…” Mrs. Easterbrook said.