Until recently, it seemed like only astronauts and the uber-wealthy could gain access to space travel. However, the more developed the NewSpace sector becomes, the more enthusiastic companies like Virgin Galactic, Blue Origin, and SpaceX focus on developing opportunities that will allow the masses to eventually go to the cosmos. Space tourism will soon be ready for blast-off.
UBS Financial Services reports that super-fast travel to space could reach a $20 billion annual market as it disrupts airlines and creates a lucrative transportation alternative. The 2019 report identifies that the broader space industry, which is worth nearly $400 billion, will more than double to $926 billion by 2040 with space tourism making up $3 billion of that value.
While space travel of the future may seem very sci-fi, there are already plans to invest in projects adjacent to the space travel sector. As private space companies aggressively seek out investments across space, access to space will become an enabler to broader expansion into the high frontier and help foster its democratization.
An Evolved Form of Long-Distance Travel Takes Flight
In the future, long-distance flights that are over 10-hours in duration could be replaced by point-to-point flights on rockets. SpaceX plans to ultimately use its massive Starship rocket to fly as many as 100 people around the world in minutes. The company said the Starship could fly from New York to Shanghai in only 39 minutes, compared to the 15 hours it currently takes by airplane.
UBS estimates that there are over 150 million passengers per year that travel more than 10 hour flights. Last year, there were 527,000 routes on airplanes with over 300 seats. If nearly 5 percent of these flights are serviced by spaceships at $2,500 per trip in the future, it’s highly likely that the opportunities for the market would be worth more than $20 billion in the future.
The investment firm said that although some will view the potential to use space to service the long-haul travel market as science fiction, they believe a large market will open up.
UBS noted that it’s highly unlikely that a rocket will be capable to carry over 300 people in the foreseeable future, so the Starship’s capacity of 100 will be the maximum for now. However, UBS expects an increased frequency of space travel during the day to enable the same volume of passengers. However, due to the length of long-haul commercial travel, and the rules and restrictions regarding crewing, take-off and landing times at airports, the investment firm also predicts that reusable rockets (especially land-based ones) would have a materially better usage rate than a commercial airplane.
As such, the $20 billion estimates may prove conservative as the interest for public spaceflight is growing as more than 10 percent of people in a recent UBS survey said they would choose spacecraft over an aircraft for long-distance travel.
While the exact timing of such a regular, long haul service is still uncertain, these predictions are merely conservative ones, with the potential growth for intergalactic travel looking more and more promising.
Space Tourism’s Future Market
Billions of dollars are pouring into private space companies. Even though space tourism is still relatively nascent, UBS believes the sub-sector “will become mainstream as the technology becomes proven and cost falls.”
Currently, space tourism has largely been limited to a few flights organized by the U.S. company Space Adventures. Over the past twenty years, the company has flown seven tourists on Russian Soyuz rockets. Private clients have spent over a week on the International Space Station as part of a $20 million ticket, space tourism opportunities that only cater to the uber-wealthy.
Fortunately, many commercial space ventures continue to seek opportunities for suborbital travel. Virgin Galactic and Blue Origin are two such companies focusing on those efforts. Both are edging closer to launching paying tourists. It’s companies like these that believe the space tourism market will have the greatest potential to gain traction quickly.
Virgin Galactic, for example, is deeply focused on the development program of its spacecraft. Last month, the space enterprise sent a test passenger on Virgin Galactic’s spaceflight – a first for any private US-based company. The spacecraft holds up to six passengers, along with the two pilots. While the company has more than 600 would-be astronauts signed on to launch, the test passenger’s work is instrumental in preparing Virgin Galactic for commercial operations. However, current pricing for Virgin Galactic flights is $250,000 each.
As the company focuses on both tourism and manufacturing spaceships, UBS indicates how Virgin Galactic’s business model is similar to the growth of businesses in the early days of aviation, believing that history could repeat itself.
Blue Origin, founded by Amazon CEO Jeff Bezos, is also close to achieving spaceflights with human passengers. The company is developing its New Shepard rocket system exclusively for the space tourism business.
As both Virgin Galactic and Blue Origin employ reusable spacecraft systems, UBS asses that these space companies will be able to popularize space tourism as a common travel option, especially as reliability rates increase and prices eventually decline.
The estimate that the space tourism market will acquire over $3 billion per year will be supported by opportunities for growing at double digit-rates, which is similar to what occurred in commercial aviation, especially once low-cost airlines became prominent.
SpaceX’s two different ventures could also harness significant cash flow from space tourism. The Elon Musk-led company recently completed a historic test flight of its Crew Dragon capsule, which is capable of sending up to four astronauts to the International Space Station by 2021. NASA is projected to pay SpaceX $58 million on average per astronaut as opposed to the $81 million per astronaut on Russian Soyuz rockets.
The next SpaceX goal is for early Starship flights to send tourists on missions beyond Earth’s orbit. In September, Japanese billionaire signed up to orbit the moon on Starship. Maezawa will fly in 2023, with six to eight guests joining him on the flight. This is just the start. While super-rich clients test out space tourism first, the industry is embracing an industry that can enhance the travel patterns of anyone.