The space tourism industry is stuck in its billionaire phase

The spectacle of launching billionaires into space is the beginning of a long road ahead.

By Joey Roulette

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Richard Branson’s extravagant jaunt to space on Sunday signaled the dawning of a new space age — for the few people that can afford it. Jeff Bezos is about to set off on a similar excursion next Tuesday when he launches to space with three others on his company Blue Origin’s first crewed flight. The two billionaires are validating their companies’ tourist-tailored rockets and, they say, fulfilling lifelong dreams to get a brief taste of space.

But what Virgin Galactic’s mission on Sunday proved, and what Bezos’ flight will similarly show, is that space is almost open, not for you and me or the general public, but for more billionaires.

Opening up the cosmos to the masses and normalizing space travel is a goal companies and their billionaire backers have been targeting for years but haven’t yet achieved. There’s economic potential beyond launching rich people to space: microgravity research for scientists and — a much farther goal — rapid transportation between continents. That’s the vision they’re selling with these flashy flights; once exclusive to government astronauts, traveling in space could be a thing for everyone else too.

“It’s tough at the beginning”

“That’s the dream, right? That space isn’t just for NASA anymore,” Kathy Lueders, NASA’s human spaceflight chief who oversaw development of SpaceX’s Crew Dragon astronaut capsule, said during a press conference in April. “I mean, I think that’s what we’re trying to do... what we were hoping is that you would hopefully have so many customers that at one point, the price-point would go down to having it be accessible. It’s tough at the beginning.”

In this beginning phase, flying to space is priced only for the ultra-rich, driven by the high costs of new space technology. Virgin Galactic’s launch of Richard Branson represented one of the final key test missions to validate its shiny six-seated spaceplane, SpaceShipTwo, but it was also a meticulously crafted marketing event, complete with flashy promo videos, inspirational speeches, and a pop concert, all designed to help attract more attention, and more customers.

US-SPACE-TOURISM-BEZOS-BRANSON

To live their own version of Branson’s dream, customers will have to pay at least $250,000 for a seat (the company already has roughly 600 booked passengers). And right now, the quarter-million-dollar price tag is the cheapest option on the market. The price for a seat on Blue Origin’s New Shepard rocket could be higher. And if you want to go into orbit for a few days, a ride on SpaceX’s Crew Dragon capsule will set you back at least $55 million (that could be higher too; SpaceX hasn’t publicly confirmed the real price).

A long road ahead to bringing prices down

While Branson and Bezos’ flights to space mark key moments for their space tourism businesses, the space industry is far from being able to offer its services to the rest of the public. To get there, they’ll have to clear several hurdles: Can these rockets reliably fly humans on multiple missions without a hitch? If there is a hitch, like a fatal accident, can the market survive a damaged reputation? And can someone buy a ticket to space just as they can book an expensive flight (instead of just the ultra-rich)?

Then there’s the court of public opinion, which may be difficult to win over. Bezos, Branson and Elon Musk’s space ambitions have been criticized as another example of billionaires spending money on passion projects when there are places and causes where those funds could arguably be put to better use. The US alone struggles with vast wealth inequities, poor access to healthcare and a rapidly changing climate, among other problems that, when paired with space tourism, makes the activity look insultingly selfish to many. Sen. Bernie Sanders (I-VT), a leading critic of billionaires, has repeated that point as the private space race heats up. “Here on Earth, in the richest country on the planet, half our people live paycheck to paycheck, people are struggling to feed themselves, struggling to see a doctor — but hey, the richest guys in the world are off in outer space!,” he tweeted in March.

“I can understand it,” Branson says of critiques like Sen. Sanders’, speaking on The Late Show with Stephen Colbert on July 14th. “But I think maybe they’re not fully educated as to what space does for Earth.” Branson, like other space advocates, point to the technologies that investments in space have helped propel into the mainstream, like the GPS capabilities wired into smartphones, weather tracking services or climate change research and modeling from satellites in low-Earth orbit. Many of those investments came from public funds — it’s still unclear what spin-off developments might emerge from the still-fledgling private space tourism industry.

“We have to deal with the fact that billionaires trying to make more money are the public face of the space sector right now”

As long as the space industry is dependent on billionaire funds for spacecraft built for billionaire (and millionaire) customers, the perception that this is a hobby for the ultrawealthy will inevitably remain. “We have to deal with the fact that billionaires trying to make more money are the public face of the space sector right now,” Brian Weeden, a director at the Secure World Foundation, said.

SpaceX Falcon-9 Rocket And Crew Dragon Capsule Launches From Cape Canaveral Sending Astronauts To The International Space Station

Putting faces on nascent industries isn’t unusual in itself. Charles Lindbergh, the first pilot to fly across the Atlantic Ocean alone, famously helped propel commercial aviation from its infancy in the 1920s and 1930s. Same with Steve Jobs or Bill Gates at the dawn of the desktop computer at the end of the 20th century.

Those industries, too, had doubters and critics. The US was skeptical of the early planes being built by the Wright brothers and top military officials dismissed aviation as a fad. “Any man who sticks to it is either crazy or else a plain damned fool,” said American Admiral William A. Moffett, who would later embrace aviation under the Navy’s Bureau of Aeronautics. And in 1943, when computers were massive room-sized objects, the chairman of IBM, Thomas Watson, scoffed at their potential: “I think there is a world market for maybe five computers.”

“A fairly large learning curve” from development to routine operations

Flights became commonplace. Computers became less expensive and more widely used. And at each phase of the computer’s evolution, people found new ways to use them as they became accessible to more markets and a wider swath of consumers, notes Carissa Christensen, CEO of BryceTech, a tech and space industry analytics firm.

Amazon Chief Executive Officer Jeff Bezos Introduces The Blue Origin New Shepard System

“There’s going to be a fairly large learning curve as companies go from the process of developing a capability and testing it, to operating it routinely,” Christensen said. It’s possible that space tourism will follow the same path as computers or airplanes, but there’s no guarantee that it will succeed. In part, that’s because there’s no single solution to driving down the cost of launching people to space. Virgin Galactic earlier this year unveiled a new version of SpaceShipTwo that’s tailored for quick production rates, signaling it’s gearing up to accommodate its hefty customer backlog and reopen ticket sales, which have been closed since a fatal 2014 accident during a test flight. (Branson’s presence on Sunday’s flight also served as a visual reassurance to customers that the ship is safe.) Musk is focusing on better rocket fuel efficiency with SpaceX’s Starship, a fully reusable launch system being developed to slash the cost of sending humans to space.

But again, what exactly those next-generation prices will be remain a mystery. Musk hasn’t said how much it’ll cost prospective passengers to fly on Starship. And Virgin Galactic hasn’t said how much it plans to charge for tickets for its newer spaceplane, SpaceShipThree, just like Blue Origin, which hasn’t revealed its New Shepard prices.

Keeping space tourism dreams alive while the price comes down

Currently, you either have to be talented (hand-picked by a billionaire) or lucky to book a ride on one of these rockets without paying the steep price tag. Raffling off tickets, like Virgin Galactic plans to do , and donating seats to space enthusiasts who can’t afford them keeps the public dream of normalized, low-cost space travel alive while the industry races to find the right recipe for bringing prices down. “I think that in any competitive market you’re going to see products improve and/or prices drop,” Christensen added.

The competition has only just begun, and other companies are angling to get into space tourism. Texas-based Axiom Space has plans to build a private space station and arrange private rides on SpaceX’s Crew Dragon capsules. A new rocket under development by Rocket Lab, the California-based launch company that plans to go public, is designed to launch humans to space in the future. Boeing’s Starliner capsule is designed to ferry private astronauts to the space station, too.

At the moment, there’s no telling which one will make it — if any of them do. For now, space tourism is still in a phase controlled by billionaire cash. Whether or not the industry can grow out of the spectacle and into something more mature will depend less on Bezos or Branson fulfilling their childhood dreams of flying to space and more on bringing down the cost of building rockets — and the price we pay to fly on them.

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Your Company Needs a Space Strategy. Now.

  • Matthew Weinzierl,
  • Prithwiraj (Raj) Choudhury,
  • Tarun Khanna,
  • Alan MacCormack,
  • Brendan Rosseau

business model space tourism

Space is becoming a potential source of value for businesses across a range of sectors, including agriculture, pharmaceuticals, consumer goods, and tourism. To understand what the opportunities are for your company, the authors advise you to consider the four ways in which using space could create value: data, capabilities, resources, and markets.

For most companies thinking about their space strategy over the next five to 10 years, data will be the dominant focus. For instance, many companies are turning to remote-sensing satellites for data that will inform business decisions. Whether it’s tracking the number of cars parked in retail locations, detecting costly and environmentally damaging methane leaks from natural-gas wells, or assessing soil type and moisture content to maximize crop yields, creative uses for data gathered from space abound.

Companies looking further ahead will want to explore the value to be gained from conducting activities in space, utilizing space assets, and meeting demand from the new space age.

Businesses engaging with commercial space should be willing to experiment and should look for partners.

Rapidly falling launch costs and fleets of new satellites are opening up big opportunities for business.

Idea in Brief

The situation.

Space is becoming a potential source of value for businesses across a range of sectors, including agriculture, pharmaceuticals, consumer goods, and tourism.

The Explanation

Rocket launch companies like SpaceX, Blue Origin, and Sierra Space have leveraged advances in microelectronics and computing to drive down the costs of getting to space.

The Opportunities

This article examines four ways that companies can create value using space: through data, capabilities, resources, and markets. For most companies thinking about their space strategy over the next five to 10 years, data will be the dominant focus. The other areas hold promise for later exploration. Companies engaging with commercial space should be willing to experiment and look for partners.

In the early 2000s, as the U.S. space shuttle program was winding down, the government’s policy on space moved away from its model of flowing all money and decisions through NASA and the Department of Defense. Instead, it began to allow privately funded companies to compete for public-sector contracts. The Commercial Orbital Transportation Services program (commonly known as COTS) and its successors, for example, gave private companies fixed-price contracts, rather than the cost-plus contracts typically used in the space sector, to provide services to resupply the International Space Station.

  • MW Matthew Weinzierl is the Joseph and Jacqueline Elbling Professor of Business Administration at Harvard Business School and a research associate at the National Bureau of Economic Research. His teaching and research focus on the design of economic policy and the economics and business of space.
  • PC Prithwiraj (Raj) Choudhury is the Lumry Family Associate Professor at the Harvard Business School. He was an assistant professor at Wharton prior to joining Harvard. His research is focused on studying the Future of Work, especially the changing Geography of Work. In particular, he studies the productivity effects of geographic mobility of workers, causes of geographic immobility and productivity effects of remote work practices such as “work from anywhere” and “all-remote.” He is the author of the recent HBR article titled “ Our Work-from-Anywhere Future .”
  • Tarun Khanna is the Jorge Paulo Lemann Professor at Harvard Business School, the director of Harvard’s Lakshmi Mittal South Asia Institute, and the author of Trust: Creating the Foundation for Entrepreneurship in Developing Countries (Berrett-Koehler, 2018).
  • AM Alan MacCormack is the MBA Class of 1949 Adjunct Professor of Business Administration at Harvard Business School. He is an expert in the management of innovation and new product development and a core faculty member in the MS/MBA joint degree program with the School of Engineering and Applied Sciences.
  • BR Brendan Rosseau is a research associate and teaching fellow at Harvard Business School.

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The space tourism we were promised is finally here—sort of

SpaceX’s first “all-civilian” mission into orbit could create a whole new service in the space economy. But not everyone will be able to participate.

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SpaceX weathered through the onset of the covid-19 pandemic last year to become the first private company to launch astronauts into space using a commercial spacecraft. 

It’s poised to build on that success with another huge milestone before 2021 is over. On Monday, the company announced plans to launch the first “all-civilian” mission into orbit by the end of the year. Called Inspiration4, the mission will take billionaire Jared Isaacman, a trained pilot and the CEO of digital payments company Shift4Payments, plus three others into low Earth orbit via a Crew Dragon vehicle for two to four days, possibly longer. 

Inspiration4 includes a charity element: Isaacman (the sole buyer of the mission and its “commander”) has donated $100 million to St. Jude Children’s Research Hospital, in Memphis, and is attempting to raise at least $100 million more from public donors. One seat is going to a “St. Jude ambassador” that’s already been chosen. But the two others are still up for grabs: one will be raffled off to someone who donates at least $10 to St. Jude, while the other will be a business entrepreneur chosen through a competition held by Shift4Payments. 

“This is an important milestone towards enabling access to space for everyone,” SpaceX CEO Elon Musk told reporters on Monday. “It is only through missions like this that we're able to bring the cost down over time and make space accessible to all."

Inspiration4 marks SpaceX’s fourth scheduled private mission in the next few years. The other three include a collaboration with Axiom Space  to use Crew Dragon to take four people for an eight-day stay aboard the International Space Station (now scheduled for no earlier than January 2022); another Crew Dragon mission into orbit later that year for four private citizens through tourism company Space Adventures; and Japanese billionaire Yusaku Maezawa’s #dearMoon mission around the moon in 2023 for himself plus seven to 10 others aboard the Starship spacecraft.

SpaceX has never really billed itself as a space tourism company as aggressively as  Blue Origin and Virgin Galactic have. While Crew Dragon goes all the way into low-Earth orbit, Virgin Galactic’s SpaceShipTwo and Blue Origin’s New Shepard vehicles just go into suborbital space, offering a taste of microgravity and a view of the Earth from high above for just a few minutes—but for way less money. And yet, in building a business that goes even farther, with higher launch costs and the need for more powerful rockets, SpaceX already has four more private missions on the books than any other company does. 

When Crew Dragon first took NASA astronauts into space last year, one of the biggest questions to come up was whether customers outside NASA would actually be interested in going .

“A lot of people believe there is a market for space tourism,” says Howard McCurdy, a space policy expert at American University in Washington, DC. “But right now it’s at the very high end. As transportation capabilities improve, the hope is that the costs will come down. That begs the question of whether or not you can sustain a new space company on space tourism alone. I think that’s questionable.”

So why has SpaceX’s expansion into the private mission scene gone so well so far? Part of it must be that it’s such an attractive brand to partner with at the moment. But even if a market does not materialize soon to make private missions a profitable venture, SpaceX doesn’t need to be concerned. It has plenty of other ways to make money. 

“I’m not sure Elon Musk cares much if he makes money through this business,” says McCurdy. “But he’s very good at leveraging and financing his operations.” SpaceX launches satellites for government and commercial customers around the world; it’s got contracts with NASA for taking cargo and astronauts alike to the space station; it’s ramping up progress with building out the Starlink constellation and should start offering internet services to the public some time this year. 

“It really reduces your risk when you can have multiple sources of revenue and business for an undertaking that’s based upon the single leap of rockets and space technologies,” says McCurdy. “The market for space tourism is not large enough to sustain a commercial space company. When combined with government contracts, private investments, and foreign sales it starts to become sustainable.”

Space tourism, especially to low-Earth orbit, will still remain incredibly expensive for the foreseeable future. And that underscores the issue of equity. “If we’re going into space, who’s the ‘we’?” asks McCurdy. “Is it just the top 1% of the top 1%?” 

The lottery concept addresses this to some extent and offers opportunities to ordinary people, but it won’t be enough on its own. Space tourism, and the rest of the space industry, still needs a sustainable model that can invite more people to participate. 

For now, SpaceX appears to be leading the drive to popularize space tourism. And competitors don’t necessarily need to emulate SpaceX’s business model precisely in order to catch up. Robert Goehlich, a German-based space tourism expert at Embry-Riddle Aeronautical University, notes that space tourism itself is already multifaceted, encompassing suborbital flights, orbital flights, space station flights, space hotel flights, and moon flights. The market for one, such as cheaper suborbital flights, is not necessarily faced with the same constraints as the others.

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Super fast travel using outer space could be $20 billion market, disrupting airlines, UBS predicts

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  • In a decade, high speed travel via outer space will represent an annual market of at least $20 billion and compete with long-distance airline flights, UBS says.
  • UBS expects the broader space industry, which is worth about $400 billion today, will double to $805 billion by 2030.
  • Long haul airplane flights that are more than 10 hours in duration would "be cannibalized" by point-to-point flights on rockets, UBS said.

UBS believes there will be very lucrative ramifications from the space flight efforts currently led by Virgin Galactic, SpaceX and Blue Origin.

A lengthy UBS report published on Sunday found that, in a decade, high speed travel via outer space will represent an annual market of at least $20 billion and compete with long-distance airline flights. Space tourism will be a $3 billion market by 2030, UBS estimates.

"While space tourism is still at a nascent phase, we think that as technology becomes proven, and the cost falls due to technology and competition, space tourism will become more mainstream," UBS analysts Jarrod Castle and Myles Walton wrote in the note. "Space tourism could be the stepping stone for the development of long-haul travel on earth serviced by space."

UBS expects the broader space industry, which is worth about $400 billion today, will double to $805 billion by 2030 when accounting for these innovations. While these sub-sectors would be a small part of that, Castle and Walton said "the outlook for the space economy, space tourism and long-haul travel using space has become much more bullish."

Private space companies "are investing aggressively across the space opportunity," UBS said, and the firm believes access to space "is the enabler to broader opportunities for investment."

Revolutionizing long distance travel

Long haul airplane flights that are more than 10 hours in duration would "be cannibalized" by point-to-point flights on rockets, UBS said. The firm pointed to SpaceX's plans to use the massive Starship rocket it is building to fly as many as 100 people around the world in minutes. SpaceX said that Starship would be able to fly from New York to Shanghai in 39 minutes, rather than the 15 hours it takes currently by airplane.

UBS estimates that there are more than 150 million passengers a year that fly routes longer than 10 hours. Last year, those routes saw 527,000 routes on airplane that had an average of 309 seats, UBS said.

"If we assume that 5 percent of these flights in the future are serviced by space at $2,500 per trip, the revenue opportunity as of today would be more than $20 billion per year as of today," UBS said

"Although some might view the potential to use space to service the long-haul travel market as science fiction, we think ... there is a large market," UBS said.

UBS noted that "it is unlikely that a rocket will carry over 300 people anytime soon," so the Starship's capacity of 100 will be the maximum for the foreseeable future. However, UBS believes there may be an "increased frequency of space travel during the day to enable the same volume of passengers," the firm said.

Elon Musk reveals his plan to send passengers anywhere on Earth in under 60 minutes, for the price of a plane ticket

"Given the length of long-haul commercial travel, and the rules around crewing and take-off and landing time slot restrictions at airports, we think a re-usable rocket (especially if not land-based) would have materially better utilisation rates than a commercial plane," UBS said.

As a result, UBS believes the $20 billion estimate "could prove conservative," the firm said. More than 10 percent of people in a recent UBS survey said they would choose a spacecraft over an aircraft for long distance travel.

"While the timing of such a long haul service is uncertain, we think our base-case assumptions are conservative," UBS said.

Space tourism's market potential

The billions of dollars pouring into private space companies represents "a high level" of capital formation, UBS said. Even though space tourism "is still nascent," UBS said they believe the sub-sector "will become mainstream as the technology becomes proven and cost falls."

To date, space tourism has largely been limited to the few flights organized by U.S.-based Space Adventures. Over the past two decades, the company has flown seven tourists using Russian Soyuz rockets. At a reported cost of more than $20 million per person, the private clients typically spent over a week on board the International Space Station.

But now "there are a number of commercial space ventures to open up suborbital travel," UBS noted. Virgin Galactic and Blue Origin are leading those efforts, both getting steadily closer to launching paying tourists.

"This area seems to be the market that has the greatest potential to gain traction quickly," UBS said.

Virgin Galactic sends its first test passenger to the edge of space

Virgin Galactic is deep into the development program of its spacecraft. Last month, the space venture owned by Sir Richard Branson sent test passenger Beth Moses on Virgin Galactic's spaceflight – a first for a private U.S. company. Virgin Galactic's spacecraft holds up to six passengers along with the two pilots. As the company has more than 600 would-be astronauts signed on to launch, Moses' work is key to preparing Virgin Galactic for commercial operations. Tickets for Virgin Galactic's flights are priced at $250,000 each.

UBS believes Virgin Galactic's business model, as both a tourism company and manufacturer of spaceships, mimics the growth of businesses in the early days of aviation.

"In this way history could repeat itself as United Airlines today can trace back its roots to the Boeing Aircraft & Transport Company," UBS said.

Blue Origin, the company founded by Amazon CEO Jeff Bezos, is also nearing its first spaceflights with human passengers. Blue Origin is developing the New Shepard rocket system for the company's space tourism business.

As both Virgin Galactic and Blue Origin utilize reusable spacecraft systems, UBS believes the companies will be able to make space tourism "a more common occurrence" as reliability increases and prices decline.

"We estimate space tourism will be a $3 [billion plus per year] opportunity growing at double digit-rates," UBS said. "This would be similar to what happened in commercial aviation, especially after the rise of low-cost airlines."

SpaceX could also see significant cash flow from space tourism, UBS believes, through two different ventures. Elon Musk's company just completed a historic test flight of its Crew Dragon capsule, which will be able to send as many as four astronauts to the space station. UBS estimates that NASA will pay SpaceX about $58 million on average per astronaut, compared to the $81 million per astronaut for flights on Russian Soyuz rockets.

The second SpaceX opportunity is for early flights of Starship to send tourists on missions beyond the Earth's immediate orbit. In September, Musk announced Japanese billionaire Yusaku Maezawa signed with SpaceX to fly around the moon on Starship. Maezawa expects to fly in 2023, with six to eight guests joining him for the flight.

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Boom in space tourism threatens to boost the amounts of space junk and climate emissions

business model space tourism

Professor of Space Environment Physics, University of Reading

Disclosure statement

Mike Lockwood receives funding from UKRI/Science and Technology Facilities Council and UKRI/Natural Environment Research Council

University of Reading provides funding as a member of The Conversation UK.

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Commercial companies are increasingly becoming involved in transporting astronauts to the International Space Station (ISS), as well as other activities in orbit. Some, such as Houston-based Axiom Space, eventually want to build their own space stations in orbit , where commercial astronauts could make extended stays.

This could also provide more money and opportunities for science to be carried out in low Earth orbit. But it also raises a host of safety concerns, because it will add to the already troublesome issue of space junk. There are also implications for the environment, because rockets produce greenhouse gas emissions that contribute to climate change.

Axiom, which was founded in 2016, was the first company to conduct privately funded missions to the ISS. Under Axiom’s Space Access Program , it has been offering different countries the opportunity to design customised missions to orbit aboard SpaceX’s Crew Dragon spacecraft. As such, it recently signed an agreement with the UK Space Agency for an all-UK astronaut mission to the ISS.

Nasa is increasingly partnering with private companies to accomplish its space missions. However, initiatives such as the one with Axiom to fly multiple tourist missions to the ISS mark a new kind of commercialisation of space.

Axiom’s planned commercial space station will first be built as an add-on to the ISS. It will then be detached so that it becomes independent. Space tourism is a key part of its business model.

Axiom is not alone in its aims. Jeff Bezos’ Blue Origin, aerospace giant Northop Grumman, and smaller companies such as Nanoracks and Sierra Space are all developing their own space station designs. These are aimed at operating in low Earth orbit within the next decade.

Blue Origin, Northrop Grumman and Nanoracks have been awarded US$415 million (£335 million) by Nasa under the agency’s Low Earth Economy strategy to develop their space station concepts. In effect, the Nasa strategy uses public money to enable private companies to bring in commercial money. This private investment then helps provide the infrastructure needed for science and operations in low Earth orbit.

The scientific case for putting humans in space has historically been very weak – though not non-existent. Modern robotics and remote-control systems are now so good that the case is even weaker today than it ever was.

To most scientists, human space missions are vanity projects to do with national prestige. However, most will concede that there are huge benefits in terms of public engagement and inspiration. If they were fully costed, though, it’s unlikely that some experiments would be funded by the peer review panels of the science funding agencies.

Space junk concerns

There are also major concerns about risks posed by the increase in the general number of space missions, particularly because space junk is already a major problem in low Earth orbit. In 1978, Nasa scientist Donald J Kessler described the “Kessler syndrome” – a potential runaway effect where a collision in space could spark many more debris impacts, leading to the destruction of multiple spacecraft, or even the majority of low Earth orbit spacecraft .

Since 1999, the ISS has had to manoeuvre to avoid large pieces of space junk 32 times. Recently, the risk has been raised by a huge increase in the number of craft in low Earth orbit. In particular, since 2019, SpaceX and its competitors, such as OneWeb and Amazon Kuiper have embarked on programmes of launching tens of thousands of satellites into low Earth orbit to provide internet access .

Space debris

However, less than 0.5% of internet traffic is currently carried by satellite communications. Despite the potential benefits to unconnected people in rural areas, upfront and subscription costs mean that Starlink’s current subscribers, make up less than 0.02% of the global population . They include many cruise ships , private jets and luxury yachts .

Environmental concerns

The other area of great concern is the environmental effect of sending more people to space. It would increase the climate impacts of space activities by an order of magnitude . This would exacerbate the problems society is already experiencing.

At present, the richest 1% of humans are emitting about 100 times more CO₂ than the poorest 10%. Internationally, policymakers are increasingly aware of the way that certain populations around the world may be affected more harshly by climate change than others. They are also aware of the pressures and instability generated by mass migration caused by climate change . Space tourism adds to this inequality.

There are other serious environmental concerns. Launches, particularly with solid rocket boosters, cause stratospheric ozone depletion . There are also worrying levels of atmospheric pollution by metals caused by so many launches and so much , re-entering debris .

This is an area that is moving forward with astounding speed. At first sight, it seems that we can harness the excitement and wonder of space travel to fund new opportunities for science and develop technology that’s of great benefit to humankind.

However, it would be wise to take the time to think through the potential consequences carefully. The human, or crewed, element means that the financial model of commercial human spaceflight is vulnerable to just a single failure, as the recent Titan submersible implosion proved.

Even more importantly, activities in low Earth orbit are a hugely valuable, yet vulnerable resource. They provide us with environmental and disaster monitoring systems, weather and climate monitoring, vegetation and crop growth measurements, geolocation and navigation (such as GPS) as well as communications.

Despite my previous comments about their main rationale not being scientific, space stations such as the ISS have provided some unique opportunities for working in zero gravity. There have been some remarkable impacts in, for example, medical and materials research.

We must not destroy the vital resource of low Earth orbit with space junk. And we cannot just ignore the implications for the climate and environmental justice.

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We have liftoff: Space Tourism and the Space Economy

The past year has been revolutionary for the space economy, with space tourism finally becoming a reality. While traveling to the stars seemed like a far-fetched dream, companies like SpaceX , Blue Origin and Virgin Galactic have seemingly made it possible, each having flown their first tourist-focused missions in 2021.  

Following the milestone number of successful commercial space launches in 2021, it seems like every week there are new announcements of plans for space travel. With more private citizens than ever before making the trip outside of the Earth’s atmosphere in 2022, it is clear that Space Tourism is now a reality. But what does the emergence of space tourism mean for the space economy?   

What is space tourism?

Simply put, space tourism refers to the activity of traveling into space for recreational purposes. While to many it seems like an unattainable dream, the concept of space tourism isn’t new, with Dennis Tito, the first space tourist, having paid $20 million in 2001 to go to the International Space Station (ISS) aboard the Russian Soyuz spacecraft.   

While approximately 600 people have traveled into space, only a small fraction of them have been space tourists, meaning they traveled into space for leisure or recreational purposes, and not for any scientific research. Between 2001-2009 eight space tourists reached orbit, each of them utilizing government rockets and/or government space stations for their journey. In fact, the 2021 SpaceX voyage was the first all-private mission to orbit with the crew even planning their own itinerary.   

The rapid growth of interest in space tourism has resulted in many companies researching, designing and testing spacecraft to carry tourists to space on a regular basis. Companies such as SpaceX and Virgin Galactic are leading the space tourism industry in outlining plans to deliver various forms of commercial space travel in the near future. Individuals who one daydream of being space tourists will be able to choose from three different types of space travel; suborbital space tourism, orbital space tourism, or lunar space tourism.   

Suborbital Space Tourism

Suborbital space flights will aim to reach an altitude that will qualify as reaching space but will not achieve a full orbit. The spacecraft will fly at low speeds with its trajectory intersecting the atmosphere of the surface and will fall back to the earth after the engines are shut off. Suborbital space tourists will reach altitudes of approximately 100 kilometers and will have a few minutes in space, they will also experience some moments of weightlessness as the spacecraft free falls back to earth.  

The suborbital space tourism market is currently dominated by two competing companies: Virgin Galactic, which debuted on the public market in 2019 and Blue Origin, the private space company funded almost exclusively by Amazon founder Jeff Bezos. Tickets for Virgin Galactic suborbital space flights are being sold at a cost of $450,000 for the 90-minute spaceflight.   

Orbital Space Flights

Orbital space flights will reach altitudes of over 400 kilometers and orbital space tourists tend to spend days or even more than a week in space. The spacecraft will be placed on a trajectory to remain in space for at least one full orbit and should achieve the orbital velocity to remain in the orbital path. Due to the increased length, speed and distance, orbital space flights are significantly more expensive than suborbital space flights, with SpaceX’s four passengers on their September 2021 orbital space flight allegedly paying $50 million per ticket.  

While in the past orbital space tourism has been largely limited to a few flights to the International Space Station that used Russian Soyuz spacecraft, new companies entering the market are making orbital space tourism more possible. SpaceX, founded by Elon Musk, has been the market leader, having launched the first all-private orbital space flight in 2021. 

Lunar Space Tourism

Lunar space tourism aims to complete full trips to the moon with a suitable lunar spacecraft. While no lunar space tourism flights have yet been launched, plans to launch Lunar tourism on the moon’s surface or around it between 2023 and 2043 have been announced.   

SpaceX announced plans for the dearMoon project in 2021, the first ever lunar space tourism mission. The project is being financed by Japanese Billionaire Yusaku Maezawa, with a proposed launch in 2023. It will make use of a SpaceX Starship spacecraft with the aim of achieving a single circumlunar trajectory around the Moon. The mission is expected to last 6 days and is currently looking for eight crew members to take part in this historic project.  

The space economy

The space economy, as defined by OECD , includes the full range of activities and the use of resources that create value and benefits to human beings while exploring, researching, understanding, managing, and utilizing space. It comprises all public and private sectors involved in developing, providing and using space-related outputs, space derived products and services as well as the scientific knowledge that comes from various space research. Space tourism is a small subsector of the larger space industry that is expected to see exponential growth in the coming decades.  

The space economy can be further divided into two categories, space-for-earth and space-for-space activities. Space-for-earth activities are the activities that produce goods or services in space for use on earth. These activities currently dominate the space economy in terms of revenue and include activities such as telecommunications and internet infrastructure, earth observation capabilities, national security satellites, and more. In contrast, space-for-space activities are the activities that produce goods or services in space for use in space. These activities are currently experiencing high levels of growth, with space tourism opening the door for businesses to start creating an array of space-for-space goods and services over the next several decades.   

The space economy is one that is continuously growing and evolving alongside the development of the space sector as well as the further integration of space into our society and economy.  

Current trends in the space industry including the increasing public interest and investment in space activities worldwide, the unprecedented levels of private investment in space ventures, and the growing space industry revenues have led predictions of the space industry being the next trillion-dollar industry by 2040.  

The space tourism market

Space tourism has finally become a reality, and while the ticket cost is still unobtainable to most, the cost of booking a trip to the stars is expected to gradually decrease as companies continue to find new and innovative ways to make space tourism more efficient and inexpensive.   

Due to significant technological innovations coupled with the increased interest in having access to space, the space tourism market is expanding at a rapid growth rate.  

business model space tourism

(Graph 1: 2021 Global Space Tourism Market Share)  

The global space tourism market size was valued at USD 598 million in 2021, with the commercial space tourism market dominating in 2021, gaining a market share of 56.7%. In 2021 alone, there were thirteen commercial spaceflight missions undertaken, with Virgin Galactic, Blue Origin, SpaceX, and NASA having undertaken the majority of spaceflight missions to transport non-astronaut individuals across space and bring them back to Earth after a certain period.  

business model space tourism

(Graph 2: U.S. Space Tourism Market Size 2020-2030)  

North America led the overall market in 2021, with a market share of 38.3%. The U.S. Space tourism market is the largest globally, valued at USD 191.6 Million in 2021. Factors including advancements in technology, rising interest in space travel, and increased focus on research and development activities for space tourism are some of the factors fueling the growth of the market. The U.S. Space tourism market is expected to expand at a compound annual growth rate (CAGR) of 37.1% from 2022 to 2030, meaning the space tourism market is predicted to be a multi-billion-dollar market in the coming decade.  

The future of Space Tourism  

Space tourism is expected to grow far beyond tourists traveling to space just for the ride, with orbital space flights involving tourists staying in space for a period of time, while the international space station is the only habitable structure in space now, companies have begun to look beyond this.   

Designs for Voyager Station , the first ever space hotel were released in 2019 by the Gateway Foundation. The project is now being overseen by Orbital Assembly Corporation , a space construction company, who has recently taken over the project from the Gateway Foundation and is now aiming to launch two space stations with tourist accommodation: Voyager Station, the original design, as well as a new concept design Pioneer Station . Voyager Station is scheduled to open in 2027 and will accommodate an expected 400 tourists. The Pioneer Station is expected to open in three years, housing 28 tourists at a much smaller capacity. While the international space station is primarily a place of work and research, Orbital Assembly’s space hotel fulfills a different niche; they offer a destination for space tourists. While collaborations between Orbital Assembly and the companies organizing space flight such as Virgin Galactic, Blue Origin and Elon Musk’s company SpaceX have not been publicly announced, they are expected.  

It is likely that space tourism will continue to grow in the years to come, and competition between private space companies for leadership will intensify. There is no doubt that private space tourism will have a substantial economic impact. While space tourism is currently a small subsector of the larger space economy, it will redefine it in the coming decades.   

It is likely that the space tourism industry will evolve during the next decade, as barriers to entry will be reduced, competition will grow, costs will be lowered, and eventually, space travel will be affordable for everyone. The future of space tourism has the ability to positively impact many socioeconomic factors on Earth including creating jobs, educating citizens about space and fostering further innovation in the space economy.  

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Why Big Business Is Making a Giant Leap into Space

June 4, 2019 • 12 min read.

As the 50th anniversary of the first moon landing approaches in July, big business is taking space more seriously -- and interest is quickly moving from the fringe to the mainstream.

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For decades, relatively easy access to space and the big profits to go with it have dangled elusively just over the horizon. With a little more R&D money and a few more advances in the technology, the thinking went, space would be ours.

Are we there yet? More than a few signs are pointing in the direction of a robust, varied space age of viable commercialization — as well as more audacious goals than we’ve seen in generations.

On the practical side, advances in reusable rockets, lowered per-launch costs and miniaturization of satellites are opening up business opportunities well beyond aerospace and defense, and into IT hardware and telecom, according to Morgan Stanley. The global space industry is expected to generate revenue of $1.1 trillion or more in 2040, up from the current $350 billion, according to a recent report by the firm.

On the dream side, Amazon founder Jeff Bezos recently outlined a long-term vision for putting a trillion people in space colonies with one small step coming soon: an infrastructure starting with lunar lander Blue Moon. “We are going to build a road to space,” Bezos said at a May unveiling of his plans, “and then amazing things will happen.”

Amazing things already are. One indication that big business is taking space more seriously is that interest has moved from the fringe to the mainstream, says Wharton management professor Anoop Menon. While space retains an undeniably speculative aspect, especially around development of business models, a number of factors are coming together now to suggest that big business’s foray into space is here.

“I don’t think we are necessarily a long way away — it’s a matter of being creative,” said Menon, co-author with Laura Huang and Tiona Zuzul of “ Watershed Moments, Cognitive Discontinuities, and Entrepreneurial Entry: The Case of New Space .” Satellites that capture geospatial data are potentially quite lucrative, he says, tracking shipping movements, deforestation or the location of mining deposits. “This is an interesting one,” says Menon of another idea: “Taking pictures of parking lots at Wal-Mart and Target and selling that to hedge funds, since traffic is a pretty good leading indicator of economic activity.”

A sustainable business model for many is clearly the goal. For others, though, sustaining losses is a small price to pay for the pursuit of something larger and potentially more meaningful. Bezos, for instance, has said he is willing to sell a billion dollars of Amazon stock per year in exchange for adventure and knowledge in space.

Says Nicolaj Siggelkow, Wharton management professor and co-director of the Mack Institute for Innovation Management : “The main driver for these people I think is much more an aspirational goal. Here we are clinging to this speck of dust moving through the universe and there is this idea that we might be able to escape that. That is ultimately what drives their wanting to succeed.”

Space: Province of Billionaires

Three individualistic billionaires — Bezos, Elon Musk and Richard Branson — have increasingly turned their attention in the last two decades to space, which is defined by NASA and other Earthlings as beginning at 50 miles above sea level. Last month, Musk’s SpaceX launched a rocket that released 60 500-pound satellites into orbit. SpaceX intends to launch others, creating Starlink, a web of satellites supporting a global internet service.

“This ‘data-driven’ aspect when coupled with the rest of the space-industry ecosystem could make it more robust.” –Anoop Menon

Thousands more satellites are being readied. Telesat LEO (low-earth orbit) will launch a “constellation of highly advanced satellites [to] seamlessly integrate with terrestrial networks,” trumpets the company’s promotional literature. “The global network will deliver fiber quality throughput anywhere on earth.”

A partnership of OneWeb Satellites and Airbus will begin launching 900 satellites into low orbit in 2019 to deliver affordable global internet access. Amazon’s Project Kuiper will place 3,236 satellites into orbit with the stated intention of providing “low-latency, high-speed broadband connectivity to unserved and underserved communities around the world,” Amazon said in a statement to GeekWire.

“Data is everything these days,” says Menon. “There are data companies whose business models are about processing the data that comes out of the satellites, and there is this whole set of companies coming up around this idea,” which is one reason he believes that the new space race is here to stay. “This ‘data-driven’ aspect when coupled with the rest of the space-industry ecosystem could make it more robust.”

Back on Earth, demand for data only promises to increase with the proliferation of AI, development of self-driving vehicles, virtual reality and video.

At the same time, costs for commercial applications are dropping for just about everything — hardware components, software development — enabled by using commercial technology and standard architectures, says Ellen Chang, co-founder of LightSpeed Innovations. “When costs have dropped by about 60% to 80% in whatever industry, I would say you have an opportunity. It started with the inception of the CubeSat, when different commercial off-the-shelf components were used instead of space-qualified components. Over time, more and more engineers adopted the form factor.”

“Here we are clinging to this speck of dust moving through the universe and there is this idea that we might be able to escape that. That is ultimately what drives their wanting to succeed.” –Nicolaj Siggelkow

Recently, the cost of launching a satellite has declined to about $60 million from $200 million because of reusable rockets, reports Morgan Stanley, with a potential drop to as low as $5 million. Satellite mass production could decrease the cost from $500 million per satellite to $500,000.

But more data and better internet service are just the beginning. Companies like Bigelow Aerospace are developing orbital space stations. Axiom Space has staked out plans to build the first international commercial space station — with a Philippe Starck-designed interior — that aims to be a “microgravity laboratory where educators, scientists and researchers conduct life-improving research.”

Other firms are chasing space tourism or mining asteroids for rare minerals. Morgan Stanley notes that privately held space exploration firms are pursuing goals like landing humans on the moon, as well as airplane-borne rocket launchers that could put small telecommunications satellites into low Earth orbit at a far lower cost, and with far greater responsiveness, than ground-based systems.

“It used to be a space race between countries, and now it’s a space race between billionaires,” says Menon. “Musk is running SpaceX with the goal of colonizing Mars and making humanity a multi-planetary species. Bezos, with all of the might of Amazon behind him, is doing it with Blue Origin. He sees it very differently, a space-based civilization rather than colonizing planets, building space stations, and moving heavy industry off-planet, and he is slowly building the pieces for it.”

“These far-out ideas — ‘let’s mine water on the moon, let’s build these big colonies out there’ — that to me I find fascinating and inspirational and aspirational,” says Siggelkow. “And I think that is what allows these firms to attract really good people. It is really cool to be working on something amazing, it’s how you attract great talent. Whether these big projects will become commercially attractive and at what point is another question, but that might be secondary to most people working on these projects.”

“It used to be a space race between countries, and now it’s a space race between billionaires.” –Anoop Menon

There are other reasons for pushing ahead with ideas that may seem pie-in-the-sky, says Wharton management professor David Hsu. “It’s like Google funding big science projects and trying to push the technology frontier,” he says. “That has a signaling purpose in the marketplace — ‘we may be making 99% of our money from your searches, but we are thinking about the future and pushing the frontier a bit.’ They are really trying to work on the harder problems, and maybe we haven’t thought of all of the uses for a particular technology in all cases. They are on the road toward that. You want to be able to show technological things that people didn’t necessarily understand were feasible or possible.”

A certain amount of momentum for ideas hinges on perception, especially regarding a future for the space-tourism industry, Siggelkow notes. “We know this is a really complicated and to a certain extent dangerous endeavor, and the general public’s risk appetite is very low. Think about self-driving vehicles and accidents. At what point do we feel they are safe? There is something similar here. If something happens, I am afraid it will slow down space tourism quite a bit.”

Branson’s Virgin Galactic has already suffered a visible tragedy. One pilot was killed and another injured in 2014 when experimental spaceflight vehicle VSS Enterprise broke up during a test flight and crashed in the Mojave Desert. Several other initiatives have failed, such as Israel’s Beresheet Spacecraft, which in April crashed into the moon.

For now, investors are taking a relatively rosy view of the prospect of making money in space. In the first quarter of 2019, $1.7 billion in equity was invested into space companies — nearly the double the amount invested in the last quarter of 2018, according to Space Investment Quarterly, published by Space Angels. Total funding since 2009 exceeds $20 billion invested in 435 companies, the space-centric financial services firm says.

“With SpaceX, Boeing, Virgin Galactic, and Blue Origin all inching closer to making history as the first privately funded companies to launch commercial passengers into space, we believe that 2019 will most certainly be the Year of Commercial Space Travel,” the report said.

Rekindled Ambition

In terms of the march of progress, mindset matters. In their research paper, Menon and his co-authors proposed that the New Space market was catalyzed by a set of “emotionally resonant” events. These moments — events like the 2003 Space Shuttle Columbia disaster, or when SpaceShipOne in 2004 became the first privately developed spacecraft to take a pilot into space twice within a two-week period — challenged or reinforced existing notions, and led to new solutions.

“This, in turn, drove the emergence of a previously unimaginable market in aerospace,” they wrote.

“It’s really relevant with the 50th anniversary of Apollo 11 to remember that it’s not easy to throw some resources at a problem and expect that it’s a given you will have success.” –David Hsu

Menon says what while momentum lagged in recent years, the pace has now picked up — at NASA as well as in other countries. “The European Space Agency was in crisis mode because of the launch cost savings Musk achieved and the market share he was able to carve out so rapidly. In England, there is Reaction Engines. They have a very interesting concept, the Skylon Spaceplane, a single-stage-to-orbit plane that goes to space directly. India is interesting because they’ve been able to do a fair bit on a much lower budget. They got to Mars at a fraction of the price it took us to get there. The Chinese space program is a big part of their national prestige right now.”

Chang points to the U.K. Catapult concept as inspiration in the way it “drives innovation in the space sector and other sectors,” she says. “It’s a little bit beyond NASA. NASA is government for government. This is more supporting new business formation, new ideas. It seems like it works well. Other countries are setting up space agencies and enacting public-private partnerships inspired by national missions — and potential tax revenues — in order to develop organic space capabilities. This is another example of the drop in costs — cost of materials, hardware, software and know-how.”

NASA is seeking to add more than $1 billion to its $21.5 billion budget to help meet an accelerated goal of returning astronauts to the moon — including what would be the first woman on the moon — by 2024.

If it meets that deadline, it would be more than a half-century since the last time a human stepped foot on the moon. To many, such talk signals a renewed level of ambition generally. Better internet access is all fine and good, but there are, after all, more substantial gains to be had through space travel.

Says Hsu: “It’s really relevant with the 50th anniversary of Apollo 11 to remember that it’s not easy to throw some resources at a problem and expect that it’s a given you will have success. I’m not trying to diminish the value of social networking. Those are valuable businesses. But I think we also need to not forget as a society that for human progress, in government and industry, people have to worry about the big stuff, the hard stuff, the intractable problems. There are many domains in which we want to devote some attention to have these big breakthroughs.”

This new era of space also arrives now as a way of moving forward around a potentially positive and unified national goal.

“The tremendous strength of this country is technology, and a new space industry is happening here, it’s not happening in many other places,” says Siggelkow. “We have resources and support systems that allow these developments to occur here. We have an entrepreneurial infrastructure and world-class scientists from all over the world to work on these issues.”

More broadly, the current focus on space is reaffirming of science. “For us to solve important problems, science has been a pretty good tool for the human race,” he says. “Obviously there are two sides to many technologies. But it has allowed us to achieve incredible things.”

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Hopes are high in the private space sector that the rapidly falling costs of accessing space will yield a wide range of profitable activities. In the near term, Earth observation and telecommunications opportunities will capitalize on swarms of newly-launched small satellites. Farther out, space manufacturing at scale, resource mining, and even solar energy capture bring out the optimist in many (and the skeptic in many others). Each year, billions of dollars are being poured into space startups to pursue these visions.

The business model for space that best captures the public’s attention is tourism or, as many industry leaders would have it, space adventurism. As this preference implies, a trip to space is not a vertical cruise; it will require pre-training, substantial risk tolerance, and a strong stomach. But none other than Jeff Bezos is betting that enough Earthlings will sign up for the thrill—and transcendental experience, as astronauts describe it—of seeing Earth from the outside.

Private space adventurism is nearly two decades old, and it thus spans a remarkable era of change in the space sector. In 2001, the American entrepreneur Dennis Tito paid $20 million to the Russian space program for a ride to the International Space Station. It was a controversial arrangement that drew NASA’s opposition, but it happened to come at the start of a revolution. In 2004, Paul Allen’s private company launched and returned a spacecraft designed by Burt Rutan 100 km off Earth (the standard boundary of space) twice in two weeks, winning the Ansari X Prize. Their technology would be purchased by Richard Branson and become the basis for Virgin Galactic, the first company to promise routine space access for the public.

Around the same time, an era of public-private partnerships began when NASA inaugurated the Commercial Orbital Transportation System to spur the private development of alternative technologies for resupplying the International Space Station. That program would be crucial for the growth of SpaceX and Blue Origin, both of whom have also promised to take private citizens to space. Together, these three companies have become the leaders of the space adventurism sector.

Past promises of space tourism have generally been delayed, but it seems the tide has turned. Both Virgin Galactic and Blue Origin appear to be on the cusp of taking passengers above the line of space in the next couple of years. While the precise timing and scale are uncertain, it does seem that we are finally reaching the point at which space adventurism will become more than a promise.

Is space adventurism a viable business model? The tourism industry as a whole is enormous; estimates of global high-end tourism spending are in the hundreds of billions of dollars annually. And tourism—especially of the extreme variety, like space travel—is certainly a luxury good, so demand for it will only grow as the world gets richer. As important, the cost of space adventurism is falling rapidly as reusable rocket technology matures and leaner business models proliferate in the sector. While ticket prices aren’t public, a reasonable guess for Blue Origin or Virgin Galactic’s trips is $200,000—just one percent the price of Dennis Tito’s trip 20 years ago (not adjusting for inflation).

If another two decades brings a similar reduction, space adventurism will cost no more than a trip to Disneyworld—a major expense to be sure, but well within the range of the global upper-middle class. Of course, Dennis Tito spent eight days on board the space station, and these flights would be short-duration with no stopover. But for your typical traveler, the surrounding training and experience would likely make for just as exciting and rewarding experience. And in the long run, the insatiable demand we Earthlings seem to have for new experiences will likely lead to the development of space hotels and excursions, including flights around the moon such as that SpaceX has reportedly sold (for a 2023 flight date) to Yusaku Maezawa, an entrepreneur from Japan.

While space adventurism might generate substantial profits for space businesses, it has an even bigger payoff for society. By tapping into the wallets of millions of people on Earth, space adventurism will help fund the development of technologies and expertise that will make the broader economic development of space possible. Given the potential benefits for humankind that such development may bring, it’s a journey we can all enjoy together.

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A commercial space traveler laughing with friends on a spaceship.

Make your reservations now. The space tourism industry is officially open for business, and tickets are going for a mere $20 million for a one-week stay in space. Despite reluctance from NASA, Russia made American businessman Dennis Tito the world's first space tourist. Tito flew into space aboard a Russian Soyuz rocket that arrived at the International Space Station on April 30, 2001. The second space tourist, South African businessman Mark Shuttleworth , took off aboard the Russian Soyuz on April 25, 2002, also bound for the ISS. Greg Olsen , an American businessman, became tourist number three to the ISS on October 1, 2005.

On September 18, 2006, Anousheh Ansari , a telecommunications entrepreneur, became the first female space tourist and the fourth space tourist overall. She was also the first person of Iranian descent to make it into space. Charles Simonyi , a software architect, became the fifth space tourist on April 7, 2007.

These trips are the beginning of what could be a lucrative 21st century industry. There are already several space tourism companies planning to build suborbital vehicles and orbital cities within the next two decades. These companies have invested millions, believing that the space tourism industry is on the verge of taking off.

business model space tourism

In 1997, NASA published a report concluding that selling trips to space to private citizens could be worth billions of dollars. A Japanese report supports these findings, and projects that space tourism could be a $10 billion per year industry within the two decades. The only obstacles to opening up space to tourists are the space agencies, who are concerned with safety and the development of a reliable, reusable launch vehicle .

If you've ever dreamed of going to space and doing what only a few hundred people have done, then read on. In this article, you'll learn about the spacecraft being designed as destinations for space tourists, and how you may one day have a chance to cruise through the solar system.

Commercial Space Travel

Space accommodations, who gets to go.

business model space tourism

Russia's Mir space station was supposed to be the first destination for space tourists. But in March 2001, the Russian Aerospace Agency brought Mir down into the Pacific Ocean. As it turned out, bringing down Mir only temporarily delayed the first tourist trip into space.

The Mir crash did cancel plans for a new reality-based game show from NBC, which was going to be called Destination Mir . The Survivor -like TV show was scheduled to air in fall 2001. Participants on the show were to go through training at Russia's cosmonaut training center, Star City . Each week, one of the participants would be eliminated from the show, with the winner receiving a trip to the Mir space station. Mir's demise rules out NBC's space plans for now. NASA is against beginning space tourism until the International Space Station is completed in 2006.

Russia is not alone in its interest in space tourism. There are several projects underway to commercialize space travel. Here are a few of the groups that might take you to space:

  • Bigelow Aerospace , formed by Budget Suites of America hotels owner Robert Bigelow, hopes to make "habitable space stations affordable for corporate communities."
  • Space Island Group is going to build a ring-shaped, rotating "commercial space infrastructure" that will resemble the Discovery spacecraft in the movie "2001: A Space Odyssey." Space Island says it will build its space city out of empty NASA space-shuttle fuel tanks (to start, it should take around 12 or so), and place it about 400 miles (644 km) above Earth. The space city will rotate once per minute to create a gravitational pull one-third as strong as Earth's.
  • The X Prize is a national contest that offered $10 million to the first private company to develop a reusable launch vehicle (RLV) capable of carrying the general public into space. In October 2004, Scaled Composites, a California based company, won the prize with SpaceShipOne. See How SpaceShipOne Works to learn more.
  • According to their vision statement, Space Adventures plans to "fly tens of thousands of people in space over the next 10-15 years and beyond, both orbital and suborbital, around the moon, and back, from spaceports both on Earth and in space, to and from private space stations, and aboard dozens of different vehicles ..."
  • Even Hilton Hotels has shown interest in the space tourism industry and the possibility of building or co-funding a space hotel. However, the company did say that it believes such a space hotel is 15 to 20 years away.

Anousheh Ansari has invested in her interest in space before -- she and another relative contributed to the $10 million XPrize, and she hopes that her experience on the ISS will help her to develop spacecraft that make space tourism more affordable. Ansari dislikes the term "space tourist," because she and the first three explorers had to go through rigorous training to make the trip. "I think tourists are people who basically decide to go to some place and put a camera around their neck, and basically buy a ticket and go there. They don't prepare...I spent six months [training in Russia], and had to learn many different systems, and many new different technologies to take this journey, so I don't think tourism [does] justice to this event," Ansari said [ ref ]. You can learn more about Ansari and read about her adventure on her Web site .

business model space tourism

Initially, space tourism will offer meager accommodations at best. For instance, if the International Space Station is used as a tourist attraction, guests won't find the posh surroundings of a hotel room on Earth. It has been designed for conducting research, not entertainment. However, the first generation of space hotels should offer tourists a much more comfortable experience.

In regard to a concept for a space hotel initially planned by Space Island, such a hotel could offer guests every perk they might find at a hotel on Earth, and some they might not. The small gravitational pull created by the rotating space city would allow space-tourists and residents to walk around and function normally within the structure. Everything from running water to a recycling plant to medical facilities would be possible. Additionally, space tourists would even be able to take space walks.

Many of these companies believe that they have to offer an extremely enjoyable experience in order for passengers to pay thousands, if not millions of dollars to ride into space. So will space create another separation between the haves and have-nots? In the next section, you'll find out if you'll be able to go to space even if you don't have a million dollars to spend on a vacation.

business model space tourism

Will space be an exotic retreat reserved for only the wealthy? Or will middle-class folks have a chance to take their families to space? Make no mistake about it, going to space will be the most expensive vacation you ever take. Prices right now are in the tens of millions of dollars. Currently, the only vehicles that can take you into space are the space shuttle and the Russian Soyuz, both of which are terribly inefficient. Each spacecraft requires millions of pounds of propellant to take off into space, which makes them expensive to launch. One pound of payload costs about $10,000 to put into Earth orbit.

NASA and Lockheed Martin worked on a single-stage-to-orbit launch space plane , called the VentureStar, that supposedly would've been launched for about a tenth of what the space shuttle costs to launch. However, the program was canceled in late 2001 after a prototype suffered problems during testing as well as scheduling issues and cost overruns. Perhaps NASA's latest spacecraft project, the Orion Crew Exploration Vehicle, will replace the shuttle as a means to transport tourists to space. Check out How the Orion CEV Will Work to learn more.

In 1998, a joint report from NASA and the Space Transportation Association stated that improvements in technology could push fares for space travel as low as $50,000, and possibly down to $20,000 or $10,000 a decade later. The report concluded that at a ticket price of $50,000, there could be 500,000 passengers flying into space each year. While still omitting many people, these prices would open up space to a tremendous amount of traffic.

If you don't want to wait for space hotels and cruise ships, Space Adventures offers passengers an array of options, such as:

  • Zero-gravity flight program
  • MiG-25 Edge of space program
  • MiG-21 High-G flight program
  • Spacewalk adventure program

Although most of these programs also include a two- or three-night stay in Moscow, prices start at close to $10,000 and go higher. Still too much money for your budget? Some, including Apollo 11 astronaut and ShareSpace Foundation chairman Buzz Aldrin, have proposed a space-trip lottery system to give everyone a chance to go.

Since the beginning of the space race, the general public has said, "Isn't that great -- when do I get to go?" Well, our chance might be closer than ever. Within the next 20 years, space planes could be taking off for the Moon at the same frequency as airplanes flying between New York and Los Angeles.

For more information on space tourism and related topics, check out the links on the next page.

Lots More Information

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Space tourism and commercialization.

Mike Read, International Space Station Commercial Space Utilization Manager, discusses NASA's new directive that further opens up the station for commercialization and space tourism with the goal of developing a robust economy in low-Earth orbit.​ HWHAP Episode 103.

Space Tourism and Commercialization

Listen to the Podcast

Space Tourism and Commercialization

If you’re fascinated by the idea of humans traveling through space and curious about how that all works, you’ve come to the right place.

“Houston We Have a Podcast” is the official podcast of the NASA Johnson Space Center from Houston, Texas, home for NASA’s astronauts and Mission Control Center. Listen to the brightest minds of America’s space agency – astronauts, engineers, scientists and program leaders – discuss exciting topics in engineering, science and technology, sharing their personal stories and expertise on every aspect of human spaceflight. Learn more about how the work being done will help send humans forward to the Moon and on to Mars in the Artemis program.

Episode 103 features International Space Station Commercial Space Utilization Manager, Mike Read, who discusses NASA’s new directive that further opens up the station for commercialization and space tourism with the goal of developing a robust economy in low-Earth orbit. This episode was recorded on June 18, 2019.

For more information on this directive check out the Low-Earth Orbit Economy webpage!

Houston, we have a podcast

Gary Jordan (Host): Houston, we have a podcast! Welcome to the official podcast of the NASA Johnson Space Center, Episode 103, “Space Tourism and Commercialization.” I’m Gary Jordan and I’ll be your host today. On this podcast we bring in the experts; NASA scientists, engineers, astronauts, all to let you know the coolest information about what’s going on right here at NASA. So on June 7, 2019, NASA announced a new directive that further opens up the International Space Station for commercial use. This means a really brand new way that business is done in space. And it widens the possibilities for commercial companies to explore different markets, to manufacture goods, to test their own habitable structures, to conduct marketing and sponsorship activities, and to send more people to space through space tourism and private astronauts. This announcement was a big deal for us because it’s a significant shift from how we normally do things. But why do this at all? Well, NASA’s going full speed ahead to make a landing of the first woman and the next man on the moon a possibility. And developing a robust economy in low-Earth orbit, or basically creating a space in space, for companies to succeed, is a good way to make that happen. Developing this economy with many companies means NASA can focus its resources on Moon exploration. We’ll still need low-Earth orbit, but with this model, we can purchase services from companies in low-Earth orbit at a much lower cost than doing everything ourselves, because the ultimate goal would be to be one of many customers in a self-sustaining economy. The idea here is not to make money or reduce cost, just to enable this to happen. But really, this is all just skimming the surface; this announcement was densely packed with tons of details and nuances. So today, we’ll be talking more in depth about these efforts on the International Space Station with our guest, Mike Read. He’s the commercial space utilization manager for the International Space Station Program here in Houston. Mike is great at explaining all of this in a way that makes sense. So I was excited to bring him on. So here’s everything about space tourism, commercialization and marketing, with Mr. Mike Read, enjoy.

Host: Mike, thank you for coming on the podcast today.

Mike Read: Well, thanks for inviting me to do this.

Host: I know you’ve been waiting a long time for this to happen and I know just back and forth from the time that we’ve been working together, this is, this idea of commercialization has, is not new. We’ve been, we’ve been working on it for a while, right?

Mike Read: Actually we’ve been working on it longer than I even thought.

Mike Read: So this, this goes all the way back into the days of shuttle where we launched commercial communication satellites, we flew payload specialists from Hughes, Gregory Jarvis, who passed away on 51L, was a commercial astronaut, maybe the first commercial astronaut. And then in the ’90s we flew SPACEHAB missions on shuttle, I think we flew about a dozen, at least, of those through the Mir Program as well, Shuttle-Mir. And then we’ve been doing commercial research in space for all of that time and through the 2000’s to date, we’ve had a number of commercial companies, especially since we started the National Lab back in 2011, started operating it for commercial purposes.

Host: And I think that’s important to know, this is, this is something that’s existed for a long time, the idea of commercialization. I think some of the more, some of the things we’ve been announcing recently are a little bit new, and we can go into those later, but give us kind of more of that historical perspective. What is, what is the traditional model of how we’ve been working with these commercial companies, like you’ve been saying, over the past couple decades?

Mike Read: Well, so the traditional model of research is government funded, it’s through academia, through other government agency where we issue grant announcements and we select peer reviewed science and we go do it. The commercial aspect of it is different in that it’s more towards improving products or developing products perhaps. Proctor and Gamble’s been doing research on colloids, which are the micro elements inside of a fluid to keep things from separating, keeps your ketchup from having water and tomato spots on the shelf, right? For instance. But they’ve been doing colloids for probably about 15 years with us. Merck is now doing protein crystal growth, we’ve got pharmaceuticals companies doing rodent research, so it’s really, it’s really growing to where they’re covering their costs, whereas before, it was grant funded. We still help them with the implementation partner cost because it’s expensive to adapt a research investigation from terrestrial to space, and so we, we help with that, help them to prove that there’s goodness in doing research in space. And that’s a totally different model than a traditional grant funded model.

Host: Yeah, and a lot of this, is a lot of this through the ISS National Lab?

Mike Read: It is.

Host: Okay, so where does, where does that come in? The difference I guess, for those who don’t, may not understand the difference between ISS National Lab and research like you’re talking about, and some of the stuff that NASA’s doing.

Mike Read: So, so NASA we go by what we call the Decadal surveys. And so that is, it’s done as it suggests, about every 10 years and it influences the kind of research that the community believes we ought to be tackling and funding. So we have our own fundamental and applied research interests, and that’s half of all of the research that we do. The other half falls under the National Lab, which is other government agencies doing things similar to NASA, but driven by different goals. It’s academia and then it’s most importantly the commercial sector. So companies that want to do research to help their product development would come in through the National Lab and that’s the other half of all the research.

Host: Yeah, it’s the idea that the International Space Station is a laboratory in and of itself, but the difference is that you take microgravity out of the equation and there’s a lot of things that you can figure out by doing so.

Mike Read: Yeah, sometimes it speeds things up, sometimes it slows things down. So, the colloidal separation in gravity is much quicker, it’s minutes, because of the gravitational pull, but in space, it’s days. And so when you slow down that sedimentation, you can really see the interactions between the different elements that are within those fluids for instance. Flames are totally different, there’s no convection so heat doesn’t rise in space, and so a flame is much more uniform and it’s much different studying things like that in space without the gravitational pull.

Host: Yeah. And a lot of this, like you’re saying, is for researching, is for figuring out what exactly is happening, then later down the road, the idea is to commercialize something that you have figured out through that research.

Mike Read: On the commercial side, it would be, I mean their goals are going to be whatever their business model says they should be, right?

Host: Right.

Mike Read: And so if they can, if they can find a way to build a product that doesn’t separate, meaning it doesn’t look, it doesn’t look as attractive to a potential purchaser on a store shelf, well that’s to their benefit. Or if they can figure out elements of muscle wasting or you know, bone deterioration that can lead to a treatment for that, then that would be in a pharmaceutical companies’ interest. But doing things in space just allows you to take a little bit different approach than the long traditional 10 year, 12 year drug development program on the ground.

Host: Yeah, I know definitely drug development is one of those areas that’s particularly interesting for microgravity. But the, going back to this idea that commercial activity in space is not new, in fact, it’s something that we’ve actually invested in and it’s become regular as part of operations. I know particularly is commercial cargo transportation. Now, you know, what used to be the space shuttle, taking up cargo to the International Space Station, now we have SpaceX Dragon, now we have Northrop Grumman’s Cygnus, we have commercial vehicles as part of that. Was it partly the success of that program that kind of sparked this idea of, huh, maybe commercialization in space can actually, can actually be something we should look into?

Mike Read: I think that definitely is where we’re at now. What we did with the Commercial Cargo Program when we first released an announcement in 2006 for that. I think the first actual cargo delivery was in 2012, so about a half a dozen years later. Commercial Crew was announced in 2009, it fed off of how we, what we learned and how we did commercial cargo. But I think all of those were in a, those were set in a different time when we knew shuttle was only going to fly so long. At the time, we didn’t know when the last shuttle flight was going to be. But we also knew that doing this the traditional government program way was probably not going to be affordable in the long term. So those are the first big steps was in getting NASA away from paying for the vehicle, launching the vehicle, operating the vehicle, it’s a totally different model because our commercial partners now do that and will soon do that for Crew.

Host: Yeah, that’s right. That’s the Commercial Crew, we’re talking SpaceX in Boeing developing Crew capabilities, and that’s obviously you know, NASA’s a big part of that because we want a ride to the International Space Station, but that idea of a commercial company like you’re saying, owning and operating their own vehicle, now it opens it up for more opportunities beyond just providing that service for NASA.

Mike Read: Well, and the next step of course is a commercial destination, I mean that’s what we really want to see. I mean we’re always going to have a need to be in low-Earth orbit and the space station for certain is going to be the last U.S. government driven platform in low-Earth orbit, it’s just, it’s not affordable to sustain a government program when you want to go do a deep space or a moon mission.

Host: Yeah, it’s definitely an important thing, and I definitely want to get into the nitty gritty of this, especially the recent commercial and marketing policies that have come out. But, you know, kind of going back to the general idea, this is something that’s important, right? Why is it important to allow business opportunities in low-Earth orbit?

Mike Read: Well, it’s self-serving, it’s totally self-serving for us as an agency. Because we are always going to need a LEO platform, a low-Earth orbit platform. We’re going to need to do our fundamental and applied research, we’re going to need to do crew training and proficiency because we’re not going to send a crew to the moon on their very first mission. That’s just not going to happen. And we’re always going to need to test new systems because systems and fluids, they operate differently in microgravity than they do in 1G and we have learned so much about what we didn’t know, by running systems over long periods of time on the space station. So, it’s a, it’s a commercial and business test bed, but it’s also critical to us in our exploration needs. So, given that ISS will be the last government driven program and given that we’re always going to need to have a place in LEO, if there isn’t other demand for this, we’re stuck holding the bag for the entire operating cost of whatever the next destination looks like. And that’s not tenable either, so, we are doing this in our own best interest to help companies, leveraging the assets of the space station to help them see if there’s a business model in space. Whether it be for tourism, for marketing, for cell line development, personalized medicine, in space manufacturing, we don’t know, but we’re, we want to enable them to try out those ideas and see if there’s, if there’s goodness in doing things in microgravity, if there is, then those kind of things are scalable. They’ll need a good bit of the next destination in space. And that way we become one of many customers, rather than the only customer.

Host: Yeah.

Mike Read: Which is critical to our ability to continue to afford to do exploration.

Host: Yeah, which is at the very core of the reason why this policy change is more of that enabling part. The idea is to, is to, at least make available the opportunity for an economy to grow and become something robust so that we can get to that point. Like you’re saying, one of many customers.

Mike Read: So, policy was a big change in direction for us. It’s been, as you mentioned at the outset, it’s been a lot of years coming. And frankly, it’s taken the administration, the hill, it’s taken a lot of people to nudge us in that direction, telling us it’s okay, this is what we want to see you do. And so the policy was developed over, over a number of years but it all kind of came together in the last year. So, it’s really different for us, you know, the Russians have done space flight participants, a number of those, back in the 2000’s when they were doing those, it was difficult for us because it was an interruption in our mission. It was an interruption in the day to day ops on station and frankly we weren’t enamored of it at all, to say the least. But, we did a bunch of commercial studies last fall and one of the things that they, they all pointed out, virtually all of them pointed out, was that you know, allowing private astronauts, tourists, to professional astronauts from other countries, to access space station was a big portion of revenue that could close a business model.

Host: Mm hmm, yeah so, and that was part of those studies that, and you kind of listed off a couple of them already; you talked about in space manufacturing, you talked about drug development, these are some of the areas where we said as NASA, hey commercial sector, hey private sector, if you were to make money in space, where would be your opportunities? And I guess yes, space tourism, space flight participance is a big place for the commercial sector to thrive.

Mike Read: And we came, we came full circle on this one. You know, we, not only does it help stimulate demand for a platform, but it also drives demand for the access to space, transportation. Which, the more you sell of anything, economies of scale will tell you, the cheaper it’s going to get, which benefits us as well. So, that was, that was a very important aspect of deciding to allow these standalone private astronaut missions to access the space station.

Host: Yeah, yeah, and that’s part of the economy is, up front it’s going to be, it’s going to be a little bit more difficult but eventually the idea is the more frequent it becomes, the, and the more regular it becomes, the cheaper it’ll get, which is huge for us. And I think you mentioned cost already, cost I think is probably one of the greater barriers to entry for a company to start becoming I guess, commercial, or profitable in space, right?

Mike Read: Well yeah, access to space is the long pole in a tent.

Mike Read: The cost of doing business in space, the biggest cost is access, so one of the things we rolled out in our commercial strategic plan a couple of weeks ago, was a solicitation looking for ways to drive down that very thing. The cost of getting to space. So, we’ll see what the private sector has, you know, has in mind for how we can tackle that, how we as a government agency doing things that are inherently governmental but we can bring a special project together to maybe drive down whatever the technologies are that make this so difficult. Maybe it’s supply chain management. We don’t know, maybe it’s financial incentives to do business in space that don’t exist right now, so we have multiple government agencies working with us; FAA, commerce, and others, are all, they’re all on board in wanting to help enable us because they recognize it’s not just a NASA thing, it’s a U.S. thing.

Host: Yeah, yeah, very much so. So let’s go into the nitty gritty, let’s talk about what, let’s talk about what has been announced most recently. I think one of the top things is the policy itself, on commercial activities and what can, what now can and cannot be done regarding commercial activities and the time allocation that we’re dedicating to doing that. So what’s happening there?

Mike Read: So we’ve never allowed marketing on the ISS, other countries have done it, the Japanese have done it, the Russians have done it, ESA has done it, the European Space Agency. We’ve never participated in that and there’s been reasons for it, because we had a research mission, right? We had a systems development mission. But we also recognized that it’s important to us to enable it because there might be additional demand for space as I said earlier. So we’re going to allow some marketing activities that are revolve around things that are being done up there already. Let’s say, let’s take Procter and Gamble. They’ve been doing colloidal research on space station for years. If they wanted to do a marketing campaign using some of our cameras on space station and showing their hardware, talking about it, our crew can’t be in that, we don’t, we can’t be seen to endorse things, but we can be operating the camera, and we can downlink the data to them, and that’s not a problem, because that’s tied to something that they’re doing on space station. When private astronauts are up there, they’ll be able to go one step further, which is do things such as marketing, of products that don’t have anything to do with things going on on space station. So if McDonald’s wanted to do an advertisement filmed in space, those private astronauts could do that. Our crews cannot, but they could. And so that’s, it’s a huge shift that we’re, we’ve come out and said now, not only are we not going to fight this, but we’re actually going to announce that we’re going to enable it. Which I think is pretty cool.

Host: Enable it and dedicate time to it. I think that’s a big, that’s a big part of this whole thing is you said, you know, why couldn’t we do some of these activities before is because we had a research mission and if you wanted to do something else besides that research, that’s time, that’s time that you’re taking away from research. Now we’re actually using a part of NASA’s time, to actually do that, to pick, to have an astronaut pick up a camera and film something or to do something like that.

Mike Read: We have, we still have a research mission, we always will.

Host: Sure.

Mike Read: Crew time has been and likely will be again, one of our limiting resources, but we felt it was equally important to help stimulate a nascent demand for LEO that we’ve never tried before. So we’ve set aside about 90 hours a year for these commercial marketing activities. And we’ve set aside some kilograms of upmast too, to support whatever their needs might be as well, small, it’s about 5% of what we have available to us, so it doesn’t impact our research, the crews do a marvelous job of getting more time in than what we actually schedule for them. They work, they work Saturdays quite often, they work long days so, it really, it will not impact our research mission but it’s equally important to see if this can develop.

Host: Mm hmm. So at least we’re, you know, we’re dedicating that time and I think that’s the majority of the commercial and marketing activities is saying that this is something that we’re going to allow and it’s a big, I guess, caveat what you said between what a NASA astronaut can do, it has to be related to space and it, you can’t have the astronaut in front of the camera–

Mike Read: Correct.

Host: Personally endorsing anything. A little bit more freedom when it comes to private astronauts, which, like you said, space tourism, space flight participants, this is a big, this is a big commercial opportunity. So what’s happening there in the world of private astronauts? How’s it all going to work with I guess the difference between, that’s a big question I know that we’re getting in our office is, you know, how does this work? What do you have to do to become a private astronaut? Do you have to train? Which companies do you go for? What do you ride on? You know, how’s this all working?

Mike Read: The beautiful part about it is it’s all business to business.

Mike Read: We have to enable them on our side, there’s a lot of things that we have to do but we’ve pointed them to the two crew providers, crew vehicle providers that we have already, or will have already flight certified, once they fly, and that’s Boeing and SpaceX. If another one develops, and we certify it, then well okay we got three of them now. But they have to go to a U.S. provider, we’ll get away from our citizens paying for a ride on a Russian Soyuz vehicle, which doesn’t do our economy any good. We will have to work them into the flight plan, so it’s probably, and for training purposes, it just entirely depends on what they want to do. If they’re, if they’re a country that doesn’t have a presence on the ISS now, that want’s a space program, they could have, select one of their astronauts. They’d become what we would call a sovereign astronaut. They could train professionally, just like our crew does, to be able to do research and other things on board. They wouldn’t need to know how to operate the systems because that’s what our crew and the Russians crew, and our partner crew do. But, and that could be easily a 2 year program, to train. And it’s probably that long for us to get it in planned in the flight sequence anyway to accommodate them. We think we can accommodate maybe two of these a year, less than 30 days, any longer than that you start getting into some medical requirements and exercise requirements and things that are going to be hard for us to accommodate because our crews have subscribed that. But if you want to go up there and be a space flight participant, what we call space tourist, it could be a lot less time than that. We teach you how to use the comm system, the internet, satellite phone if you’re going to use that, how to use the galley, and the waste and hygiene compartment, and what not to teach here, here, and here, right? So that’s a lot less time than what it would be if you’re going to go up there and you’re going to operate as one of our crew would operate.

Host: Yeah. Yeah, I mean the idea is no matter what, there’s going to be some training involved.

Mike Read: Absolutely.

Host: At the very bare minimum you have to know how to work stuff and then an event of emergency, you have to know how to properly get out of there.

Mike Read: Exactly. You know, training using our emergency equipment will be another thing that they would do, maybe a bit of the medical, but it’d be minimal.

Host: Yeah. But the idea is that now we’re at least opening up the International Space Station, allowing the commercial and marketing activities enabling the space tourism and private astronauts, more professional astronauts depending on the training, but this whole idea of destinations and I think this is a very exciting one, like you said, you know, this International Space Station is not going to be there forever, let’s develop this space, this LEO, low-Earth orbit, where there can be commercial destinations flying and the idea is we are enabling the ability to test those things. So what’s the, what’s a destination? I think that’s a, that’s something that we kind of throw out there but it might not be kind of something that people really grasp onto.

Mike Read: A destination could be a commercial module, a commercial element on space station, which I’ll come back to in a minute, it could also be a free flying platform, it might be in proximity to the space station so that it could take advantage of the cargo vehicles that are already going to space station, maybe they visit space station and then they visit the Free Flyer commercial, commercial Free Flyer, and then you know, come back and return or it could look like several of those, I mean we’re going to always have a need for space and so we want that platform, whether it’s tested on ISS and then separates or whether it goes direct to Free — Flee Flyer, it’s easy for me to say [laughter] — whether it goes direct to Free Flyer, it doesn’t really matter as long as it is capable of functioning and providing the research accommodations that we need. So that’s the long-term goal. Part of that, part of the strategic plan roll out the other week was to enable both of those things. And those solicitations should be hitting the street this week to announce that we’re soliciting proposals to put a commercial module on the Node 2 forward port of the ISS, to extend that it would operate as an element of ISS but it would have different rules of the road if you will on things that they can do inside, especially with private crew, such as those pure marketing activities that we were talking about. Which that’s probably going to be the easiest thing to enable because it doesn’t really require any other equipment other than whatever props they’re going to use in the spot, right? Our video equipment, our cameras and all that, are onboard and they can be used for that, so either one of those are important and like I said, those will eventually provide the services that we require.

Host: Mm hmm. So the idea is, we don’t know exactly what that destination, what that commercial module could look like, so let us know what you think would be a commercially viable thing. That’s the, what we’re kind of requesting there.

Mike Read: And that’s pretty much the case. Well, we’ve, part of the roll out the other week was we quantified what our long-term needs were going to be in low-Earth orbit, and companies can look at that and say okay, what of those things does it make sense for me to try to provide so that I can get the government as a customer. Because they, the studies we did they, not all of them but most of them, need the government as a primary customer in some way, shape, or form. The ones that have business models that look like they could work, have us as maybe, maybe a large customer but not the majority customer. Other ones that need us as 80-90% customer is probably not, probably not very attractive to us. Same reason that you don’t want to be the only big box store at the mall and have everything be empty because you’re going to pay the whole cost of operating the mall. We don’t want to do that. And that’s just not, that’s not a good recipe for a robust economy in low-Earth orbit.

Host: So who can participate in this? I know this is another big question that we’ve been, we’ve been getting a lot, is I believe it’s, this is a U.S. company endeavor so when we’re talking about all these different commercial companies that can do this, that, and the other thing, this is a U.S. company thing.

Mike Read: Absolutely is. I mean the American tax payers have put billions of dollars into developing and operating and doing research on space station. The creation of the National Lab was to start providing some return to the U.S. economy in the form of commercial research on space station. That was important. But for the long haul, we’re going to enable the, using the resources that we have rights to, we, NASA have rights to on station, we’re going to enable a broader participation by the U.S. economy, U.S. commercial sector, in developing these elements and doing scalable research on ISS and in developing the Free Flying platforms.

Host: Yeah. But that’s not to say that, you know, the customers don’t necessarily have to be U.S., it’s the businesses themselves. So like you’re saying for the example of private astronauts, if a company, if a different country wants to have their, a representative of their country as the first astronaut from whatever country it may be, they will just have to go through these U.S. companies to make that happen.

Mike Read: That’s absolutely true. We’ve got commercial companies that own and operate their own hardware on space station right now, that bring in users, researchers from all around the world. NanoRacks, located right here in Houston, they did a, they’ve done investigations for I don’t know how many countries but they had a Beijing Institute of Technology investigation last year. They had Vietnam, schools in Vietnam have done research on there. They’ve deployed CubeSats for other countries, so it’s happening right now. It’s just were scaling it up in size.

Host: Yeah, so let’s look a little bit towards the, towards the future because I think that will kind of lay out what the ultimate goal is, you know, we talk about developing this robust economic in low-Earth orbit, let’s just say, let’s just say timeline X and let’s go to the very end of that, we have completed all of our mission, what does low-Earth orbit look like in this scenario?

Mike Read: In the best case, there’s multiple destinations operated commercially that each can satisfy some of NASA’s needs for systems development, crew training, and research, two or more, let’s put it that way. It’s going to be an expensive environment to sustain a business model in, but if it’s a, it’s a multifaceted business model, it’s probably got the most likelihood of success and for sustainability.

Host: Mm hmm. So that’s the idea, is the destinations are commercially operated, NASA is, doesn’t have a thing in space but we are purchasing services that already exist, or purchasing transportation, or purchasing capabilities onboard the destination. And the idea I think is because we’re focusing a little bit further out.

Mike Read: That’s exactly right, you know, we want to go back to the Moon. We’ve been given a charge to do that by 2024, which is going to be very aggressive but, it’s going to be very exciting. We have got to be able to utilize space station so companies can learn to do business and then they can sell services to us. That’s the end goal, we have to be able to do that. When, back in the 1870’s we built the transcontinental railroad. The government had a need for something but didn’t have the funds to do it. So private companies, consortium, built that from east to west, west to east, and they met in the middle. We backed it with bonds, promises to pay, right? And we gave away resources. We gave away land for every mile of track. We’re doing the same thing with space station in low-Earth orbit. We have a need to see destinations appear in space, as I said, for our own self-interest, and long-term needs, and we’re giving away resources. We’re giving away the upmast and the crew time, and the power and data, and the on orbit volume and all of that, because it makes sense to do it.

Host: Yeah. The transcontinental railroad of low-Earth orbit. I think, one of the other I think good benefits of doing this, especially in low-Earth orbit, especially with the International Space Station, is it’s, I think it’s a good representation, it’s a good model for what we can do again on the Moon. International Space Station, we’ve been working with international partners, were working with commercial companies, it’s not new. We’re doing it, and we’re getting pretty good at it I think. So I think using low-Earth orbit as a test, which has been the purpose of low-Earth orbit really, is to test different capabilities and systems. You can take a lot of those same concepts and apply that to the Moon. The administrator has already talked about working with commercial companies to actually make this Moon landing and this Artemis program a success. It’s something that’s needed.

Mike Read: Yeah, well the administrator has multiple degrees in business and finance so it’s not, it’s not a surprise that he is onboard with this commercialization, this commercialization effort.

Host: Well Mike, I think that’s a very good snapshot really, and just in depth description of all of this low-Earth orbit commercialization efforts. It’s a very exciting time, and a unique model for the way that we’re actually doing human space exploration. So I really appreciate your time.

Mike Read: You bet! This will be interesting to see how this all plays out going forward.

Host: Hey, thanks for sticking around. I hope you really enjoyed this discussion with Mike Read. He did a great job, I think, of explaining everything about that went into not just this announcement, but a little bit of history of all the commercial activity that’s been happening in space over these past couple decades. But if you really want to know more about this announcement specifically, and everything that has to do with it, there is a lot of information and we made it all available online. It’s on NASA.gov/LEO-economy , if you go to that site, you can really dig into all the different elements of what’s gone on, I guess because of this announcement and then all of the opportunities that are available for you to do onboard the International Space Station. Otherwise, if you’re curious on what is the International Space Station, I hope you check out some of our other podcasts that really go into depth there, but otherwise, you can just go to NASA.gov/iss . Check out our International Space Station and NASA Johnson Space Center pages on Facebook, Twitter, and Instagram, use the #askNASA on your favorite platform. To submit an idea for the show, make sure to mention it is for Houston, we have a podcast. This episode was recorded on June 18, 2019. Thanks to Alex Perryman, Norah Moran, and Pat Ryan. Thanks again to Mr. Mike Read for coming on the show. We’ll be back next week.

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Tourism Review

ISSN : 1660-5373

Article publication date: 20 November 2017

Business models and the business model concept have become a fixture of scholarly and managerial attention. With a focus on how actors create, capture and disseminate value, business model research holds the promise to inform the tourism sector’s search for ways to innovate and change outdated business practices. Yet, the concept has inspired little research tackling the contingencies of the tourism context. The purpose of this paper is to address this gap in this review and research agenda on business models in tourism.

Design/methodology/approach

In this paper, the authors review and synthesize contributions from publications in EBSCO, Emerald Insight, ProQuest and Science Direct databases, that make explicit use of the business model concept in tourism (anytime up to September 2016). We conceptualize the identified articles as a coherent body of knowledge on business models in tourism with the objective of identifying common themes that characterize existing contributions.

From the review of 28 qualified articles, the authors identify four emergent themes: sector-specific configurations, the role of different value types, design themes for consistency and regulatory contingencies. These themes inform three domains in which the authors present avenues for tourism-specific studies on business models, as well as their management and innovation that the authors position in relation to the general business model literature.

Originality/value

This review details how researchers across disciplines conceptualize the business model. Together with the identified directions for further research, this literature review thus establishes a common conceptual basis and stock of knowledge for the study of business models in tourism research.

  • Value creation
  • Business model
  • Research agenda
  • Value capture

Reinhold, S. , Zach, F.J. and Krizaj, D. (2017), "Business models in tourism: a review and research agenda", Tourism Review , Vol. 72 No. 4, pp. 462-482. https://doi.org/10.1108/TR-05-2017-0094

Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

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Book cover

Handbook of e-Tourism pp 1–30 Cite as

E-Business Models in Tourism

  • Stephan Reinhold 5 ,
  • Florian J. Zach 6 &
  • Christian Laesser 7  
  • Living reference work entry
  • First Online: 01 April 2020

726 Accesses

3 Citations

The purpose of this chapter is to reflect on business models employed by online travel service providers since the beginning of online travel until 2019. In lockstep with technological development, this study identified three time periods of development. For each period, we investigate cases that best represent e-business model development. Employing Wirtz’s four business-to-consumer business model subtypes, we found that the commerce-type model (focus on trade transactions) dominated online travel agencies until 2000, while the next period was characterized by the advent of Web 2.0-enabled content-type models (providing online content, specifically user-generated content) and context-type models (aggregation of already existing online content) for information search portals. Finally, the increased complexity of the Internet in the last decade is also captured in multiple online business models, including the connection-type model (establishing real or virtual connections) pursued by platform businesses. The chapter offers avenues for future research that relate to theoretical issues across the three identified periods and an outlook of future tourism business model developments.

  • E-Business model
  • Value creation

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Reinhold, S., Zach, F.J., Laesser, C. (2020). E-Business Models in Tourism. In: Xiang, Z., Fuchs, M., Gretzel, U., Höpken, W. (eds) Handbook of e-Tourism. Springer, Cham. https://doi.org/10.1007/978-3-030-05324-6_71-1

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