At a space business forum in June 2008, Dr. George C. Nield, Associate Administrator for Commercial Space Transportation at the Federal Aviation Administration (FAA), addressed the future of commercial space travel: 'There is tangible work underway by a number of companies aiming for space, partly because of their dreams, but primarily because they are confident it can be done by the private sector and it can be done at a profit.'

Indeed, private companies and entrepreneurs are currently aiming to make this dream a reality. While the current economic downturn will likely slow industry progress, space tourism, currently in its infancy, is poised to become a significant part of the hospitality industry.

Unlike the space race of the 1950s and 1960s between the United States and the former Soviet Union, the current rivalry is not defined on a national level, but by a collection of first-mover entrepreneurs that are working to define the industry and position it for long-term profitability. The race includes and depends on technology firms focused on developing the safest, most reliable, and most economical spacecraft, as well as service firms, or space lines, that will ultimately market and provide space travel experiences to willing "Novanauts."¹

In this race to send private citizens into space, the first team to cross the finish line will not necessarily win international bragging rights, but can expect to benefit from establishing a name within the space travel industry. Companies that hope to have any chance at success must first establish credibility and demonstrate reliability and safety to a population that may be skeptical of the prospect of commercial space travel. Specialty firms have announced intentions to develop the technology and/or market commercial space travel to the masses, with some currently collecting deposits for future suborbital flights and, in one instance, lunar missions.

Billionaire Charles Simonyi joined a team of astronauts for his second paid visit to the International Space Station on March 25, 2009. While this experience may currently be available to the world's wealthiest individuals, opportunities for the average earthling to experience space travel are on the horizon. "Space-like" experiences such as the Zero G Jet are currently available, while true space flight opportunities are in development. This article will explore the latest advancements in space tourism and will consider opportunities for this fledging industry. The impact of the current global economic conditions on the evolution of space travel is also considered. We further investigate who the current major players are, review the existing space tourism studies published by industry experts, and provide our expectations for the future of this industry.
 
Commercial Space Travel: Types of Experiences, Major Players, and Offerings

No longer an exclusive endeavor of the government, space travel is being pursued for commercial gains – enabled by the FAA's Commercial Space Launch Amendments Act of 2004² (CSLAA) and further influenced by the $10 million Ansari X Prize³.Within the past decade, private citizens have paid large sums to be among the first to experience a variety of space and space-like experiences, including parabolic flights simulating weightlessness, suborbital flights, and higher-altitude weeklong orbital flights to the International Space Station.

The prices associated with these experiences have ranged from roundly $5,000 per person for a parabolic flight to roundly $20 million for a trip to the International Space Station. The following figure provides definitions for space-like and space flight experiences.

Flight Descriptions and Trajectories


Private investors, companies, and the industry as a whole are currently working towards making space travel possible from a variety of "Spaceports," which would be located around the globe. Locations noted during our research include, but are not limited to, the United States (California, Florida, New Mexico, Texas, and Oklahoma), Kazakhstan, French Guiana, Russia, Sweden, Australia, Singapore, and the United Arab Emirates.

As more spaceports are developed, commercial space travel providers anticipate providing point-to-point global travel. Other projects under way include the development of orbital space facilities that would serve as "space hotels." Ultimately the goal of the industry is to provide a profitable means of offering suborbital, orbital, and possibly lunar-and-beyond expeditions.

The development pace of the more complex service offerings (orbital point-to-point flights, space hotels, lunar expeditions, etc.) will be greatly influenced by the initial success of the commercial space tourism industry's first movers, offering suborbital experiences.

Parabolic Flights and Beyond

Established in 1993, Zero G was the first company to market a simulated space experience, offering tickets for parabolic flights based in major tourist destinations in the United States. Zero G offers passengers the sensation of weightlessness without traveling to space. The company's specially fitted jumbo jets perform parabolic maneuvers to recreate the sensation of Martian and lunar gravity, as well as total weightlessness.

The Las Vegas-based company has flown over 100 flights and currently offers tickets for roundly $5,000 per person, as well as charter flights for groups. In January 2008, Zero G was acquired by Space Adventures, Ltd.

To date, Space Adventures is the only private company to have sent citizens into space – including the "first space tourist," Dennis Tito. Space Adventures sent Tito into orbit for nearly eight days in 2001 via the Russian Soyuz shuttle for a reported $20 million. According to a 2007 article from FOX news, Space Adventures has sold almost $200 million in tourist space flights since 2001⁴. The company is looking to expand its offerings and is currently taking reservations aboard the "first private expedition to the moon" for $100 million per seat.

Others forging their way into commercial space travel include Sir Richard Branson's Virgin Galactic. Virgin Galactic has teamed with X-Prize winner, Scaled Composites, to shuttle private citizens on suborbital flights beginning in 2010. Tickets are currently priced at $200,000, and the company has collected a reported US$30 million as of January 2008⁵. Other companies collecting money for reservations for suborbital flights include Rocketplane for $250,000 per person and XCOR for roundly $95,000.
 
Another player that has received media attention is Bigelow Aerospace. Currently the sole manufacturer for several of NASA's key expandable space station modules, the company is developing a family of modules to serve as the first commercial space habitats. Bigelow plans to launch the first "orbital resort" in the near future but currently has no target timeframe for the launch.

A similar initiative is being pursued by Galactic Suite, a Spanish Company with plans to package pre-space training on a remote island, with space travel to the orbital resort by 2012. A 2007 press release indicated a roundly €3 million per person price for this experience.

With the space tourism industry in its infancy, each prospective operator and space technology development firm is working to set the standards for safety, comfort, and the overall Novanaut experience. One thing can be concluded from our research of existing space tourism companies: Multiple organizations and individuals believe that there is a future for us in space travel.

The following figures provide details on a selection of players in the space travel industry as of the time of our research.

Please click on the link below to find more charts in a new windown (PDF format).

www.hvs.com/Jump/?f=2925.pdf&c=4178

Understanding the Market Potential

As Space Tourism has yet to establish itself as a viable industry, there is little tangible evidence to conclude that a substantial market exists. However, an in-depth market study was conducted to forecast potential demand and revenues for space tourism activities through 2021 by Futron, a U.S.-based firm specializing in technology management consulting.

In 2006, Futron revisited an extensive market study they conducted in 2002, adjusting for the year, ticket prices, and updated population wealth statistics. The original study was based on a pool representative of those able to purchase such a luxury experience – surveying 450 wealthy⁶ individuals to determine their interest in space tourism and willingness to take part in such flights at a number of price points. Such luxury travelers are estimated as 3% of the total international tourist arrivals worldwide, yet account for 25% of total international travel expenditures – totaling US$180 billion in 2006.

Considering the world population of people wealthy enough to afford space flights, as well as their fitness and interest levels, Futron used a 40-year maturity model to forecast demand and potential annual revenue from suborbital services in 2021 to reach 13,000 passengers and an estimated US$676 million – taking into account declining ticket prices due to economies of scale and applying the Fisher-Pry S-Curve⁷ to the potential demand pool. The original study also estimated orbital flights to generate $300 million per year, generating a $1-billion industry by 2021.

While Futron's updated forecasts for 2006 are down from 2002's estimate of 15,000, the study concludes "despite a delayed introduction of commercial passenger suborbital flights, and an increase in initial ticket prices over earlier expectations, demand for suborbital space tourism remains strong." In addition, one should note that the FAA's Office of Commercial Space Transportation has set no specific health or fitness requirements for passengers, suggesting a wider range of acceptability. In addition, the updated study does not take into account any changes in "the public's perception of, or level of interest in, suborbital space tourism," which is likely to have changed since the Ansari X Prize was awarded and companies like Virgin Galactic announced their plans.

Although the Futron study cannot provide us with certainties for the future of commercial space travel, the report does give us a sense of potential revenues and scale of the primary demographic. As of the summer of 2008, over 250 people had put deposits down or paid the full price for Virgin Galactic's suborbital flight tickets, while another 600 had signed up to buy tickets once flights begin. As with any new innovation, these individuals will lead the way for the industry's expansion, eventually creating economies of scale, lowering ticket prices, and increasing accessibility to a wider demographic.

Impact of the Current Economy and Future Trends for the Space Tourism Industry

Is there enough demand to warrant long-term success of the commercial space travel industry? Only time will tell. With the current economic recession, technological advances and the launch of regularly scheduled suborbital (and beyond) flights are likely to be delayed.

However, when we consider the forecasts from the Futron study and the inclinations of a large population towards adventure tourism and activities generally perceived as higher risk, or extreme (i.e., skydiving, scuba diving, rock climbing, etc.), the authors foresee the progression of commercial space travel as a viable industry in the long term. While information is limited on the payoff and functionality of each company's plan and proposed operating models, long-term success will rely on basic critical factors such as safety, reliability, service differentiation, and value.

As spaceports are built and ticket prices lowered as a result of economies of scale, we predict point-to-point space travel to spur demand and a sustainable source of business. As demonstrated by the cruise industry, combining a destination with the travel experience may justify this mode of travel for some and support repeat purchases, avoiding the possibility of becoming a once-in-a-lifetime experience. In this case, destinations may include "hotels" in space or locations across the globe that can be reached quickly and conveniently.

We also predict that existing and new luxury brands will partner with space technology developers to offer upscale service and accommodations for affluent travelers in the first space hotels and hotels located proximate to space training and launching sites. We expect to see tourism centers (hotel accommodations, entertainment, and restaurants) to be developed adjacent to spaceport locations to house guests during space training. These supportive developments will be especially necessary in remote Spaceport locations.

As the first space flights are expected to be affordable to only the wealthiest individuals, who are accustomed to the finest accommodations, we expect that these hotels will be in the luxury segment.

For some, the dream of space travel could be a reality within the next decade. The innovators in the space tourism industry will do much to define the future experiences of prospective Novanauts, setting the standards for safety, creating realistic expectations of the in-flight experience, and developing packages and experiences that will represent the most value for the target market.

The start of the second space race is currently under way, with possibilities that are truly out of this world!

Notes:

¹ Novanauts term coined by the article authors in reference to new, citizen astronauts.
² CSLAA was signed on December 23, 2004, by U.S. President George W. Bush. The CSLAA makes the Federal Aviation Administration responsible for regulating human space flight in addition to establishing an experimental permit regime for developmental reusable suborbital rockets.
³ The Ansari X Prize was awarded on October 4, 2004, to aerospace designer Burt Rutan and financier Paul Allen, who led the first private team to build and launch a spacecraft capable of carrying three people to 100 kilometers above the earth's surface, twice within two weeks.
⁴ David, Leonard. "Space Adventures Plans Private Trips Around Moon." FOXNews.com 29 June 2007. 8 Jan. 2009 .
⁵ Virgin Galactic. "Plans for Spaceport Sweden." Press release. News. 4 Mar. 2008. 8 Jan. 2009 .
⁶ Those with an annual income of at least $250,000 or a net worth of at least $1 million
⁷ Market experience has shown that the adoption of new technological services, such as commercial aviation, typically follows an established pattern popularly known as an S-curve, characterized by slow absorption as the market becomes familiar with the product, followed by a period of accelerated adoption as the market embraces the product, and culminating with a deceleration in adoption as the market nears a saturation point.

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