Far Out: Is Space the Tourism Industry’s Final Frontier?

Nearly 70 years ago, the Cold War between the US and the Soviet Union expanded from land-based proxy wars to star wars.

Beginning in the late 1950s, the two countries launched dozens of satellites, spacecraft, and rockets over the next 20 years to gain supremacy in space. All that wasn’t cheap. Between 1960 and 1973, the US spent a whopping $26 billion ($270 billion in today’s money) on Project Apollo. During roughly the same time frame, the Soviets were estimated to have spent about $30 billion on space operations.

Today, the final frontier is also a tourist destination. Companies like BlueOrigin, Virgin Galactic, SpaceX, and others are elbowing each other to bring you into the void — if you’ve got enough cash. But who is this business for, and can it expand to those of us who don’t have a few hundred thousand dollars laying around?

Take your protein pills and put your helmets on as we launch off into the ever expanding universe of space tourism.

Feeling Very Still

What’s clear when you look under the, er, hood, is that the real business of space is still mostly the same unglamorous business of building and launching satellites. It’s just evolved to the private business model:

• Amazon founder Jeff Bezos himself puts $1 billion a year into Blue Origin. Coupled with funding through government contracts — in May it was awarded $3.4 billion to develop lunar landers for NASA’s Artemis program — and Blue Origin is able to work toward what it says are its actual goals: harnessing space’s resources to make life better on Earth and to build self-sustaining space colonies.
• Meanwhile, the majority of business of Elon Musk’s SpaceX business comes from launching satellites and shuttling cargo to the International Space Station. Since 2003, it has received more than $15 billion in government funding.

The booming satellite industry has greatly expanded communications and data collection across the globe. It’s also made Earth’s orbit incredibly crowded. SpaceX has more than 3,500 satellites in its Starlink constellation, and it’s targeting an initial total of 12,000.

Researchers writing in the journal Science recently cautioned against “repeating” the mistakes made in the high seas, ie, treating space as a common area that is somehow self-policing. The researchers noted that the number of satellites in orbit is expected to increase from 9,000 today to more than 60,000 by 2030. They’ll be joining the roughly 100 trillion untracked pieces of old satellites orbiting the planet.

The number of human beings who have boldly voyaged to space since 1957 is far fewer –  about 622. Therein lies the opportunity.

Floating in a Tin Can
Satellites, of course, just aren’t as sexy as human space travel, and so what better inspiration to help keep the lights on than stoking the dream that we’ll all be able to spend weekends having a closer look at the Sea of Tranquility?

The space tourism industry has an estimated total market value of roughly $680 million today, but in 10 years, it’s expected to be worth more than $13 billion, according to Future Market Insights.

For years, prospective passengers have been waiting to buy a seat to the heavens. A 2020 survey from Cowen found that roughly 40% of people with a net worth of more than $5 million are interested in paying at least $250,000 for a Virgin Galactic flight to the edge of space. (The actual price today is $450,000 for a 90-minute trip):

• Over the past decade, Virgin has sold about 800 tickets to space, and its goal is to reach 400 flights per year. Cowen estimated that if Virgin Galactic builds 11 ships by 2030, the company could “potentially fly ~3,400 passengers per year,” with flights nearly every day. That’s a heady forecast for a company that just completed its first commercial flight.

For those preferring the traditional rocket ride, it’ll cost you quite a bit more.

Through a partnership with SpaceX, the Houston-based Axiom Space sent three businessmen on a week’s stay at the ISS last year. They paid $55 million each.

Blue Origin is rather secretive and flexible with its ticket prices — you won’t find them on the company website. While some passengers have claimed they paid nothing to get to space (these are still very famous and influential people, mind you, not your average joe), others have said it cost them nearly $30 million.

Musk has famously said he would eventually like to send humans to Mars and possibly beyond in reusable rockets. Who knows what that would cost.

Roman Chiporukha, cofounder of SpaceVIP, a platform that helps the wealthy book space trips, told the Observer, “It’s not about money; it’s about who you are, your social capital, whether you align with their launch purposes. It’s kind of a package deal.”

Yeah, it’s still about money. And the fact that the price is right for perhaps only the  less than 3% of US households that are worth $5 million or more.

Floating in a Most Peculiar Way

But sure, those looking for a more economical voyage might have some options:

• Instead of rocket engines and superjets, companies like World View and Space Perspective intend to send passengers gently into the stratosphere using balloons. While technically not “space,” riders will still be able to see the curvature of the Earth and the blackness of space. And the capsules are expected to be designed less like a shuttle and more like lounges outfitted with food, cocktails, sofas, music, and mood lighting.
• For these companies, the marketing campaign is that they want as many people as possible to experience the “overview effect” — the profound feeling a person gets seeing the Earth from space. In a recent episode of the podcast Pathfinder, Space Perspective co-CEOs Taber MacCallum and Jane Poynter said the company has already sold 1,300 tickets and plans to be operational sometime next year.

Space Perspective trips will still run passengers $125,000 — roughly one-third a Virgin ticket — while WorldView offers an even greater discount at just $50,000 per person. Though marginally cheaper than other space tourism businesses, that’s still a lot for a six-hour ride.

All of this, of course, assumes that space tourism operators without a core business of satellite launching are going to survive to make it to the space-taxi era.

Despite its successful first launch late last month, Virgin Galactic — which was founded in 2004 — is bleeding cash after years of delays ahead of launching. As the Wall Street Journal recently reported, the company posted $1.5 billion in operating losses between 2018 and 2022. Two years ago, the stock was trading at roughly $56; now it’s below $4.

While launching into the atmosphere is surely a rush, the sector is likely to operate as another toy for the world’s ultra-elite — the type of folks who climb Mount Everest, go on luxury Serengeti safaris, or dive to the bottom of the ocean, occasionally with sad results.

The broader space exploration industry remains focused on goals outside of fulfilling vacation fantasies. Instead, it’s more focused on creating new technology the world has never seen, obtaining resources for a hurting planet, and maybe one day, putting life on Mars. In the meantime, taking Captain Kirk to space is pretty cool PR.