Is space tourism primed for takeoff?

Currently amidst an incredibly turbulent economy, the space tourism industry seems destined to boom with investors running to get in at the ground floor. 

The space tourism industry is still fighting to overcome the clear barriers to entry: cost. Private flights currently cost reportedly upwards of  20 million dollars. Due to exorbitant prices of supplies, non-reusable rockets, and rocket fuel (Daehnick and Harrington 2021).

Currently, the “space tourism race” (Reuters 2021) is dominated by the so-called “billionaires club," who  have  poured exorbitant amounts into their respective companies. Elon Musk’s SpaceX, Jeff Bezos’ Blue Origin, and Richard Branson-backed Virgin Galactic are some of the leading players all trying to break the field wide open.

While space tourism is clearly still in the budding stages of development, economists are still predicting large economic growth. By 2030, analysts predict that the industry is expected to be worth at least 3 billion dollars USD, and by 2040 it’s estimated to be able to generate 1 trillion dollars USD of revenue (Morgan Stanley 2020 and Taylor 2021).

Without a doubt, the future of space tourism looks incredibly promising, but should you invest in it? This is a tricky question, but let's take a deeper look into it. 

Currently, space tourism is a glorified bet on new technology continuing to develop that will allow for easier, and less expensive travel to space. At a bare minimum, there are clear safety risks. Space travel is “regarded as an inherently dangerous activity” (Langston 2020) and as such, there are minimum requirements in regards to physical health and fitness along with liability and consent waivers. Ultimately, space tourism is currently a big risk for participants. 

It is also believed that the first kind of space tourism to truly materialize will likely be suborbital space travel. Bezos’ Blue Origin has already made headway in this sphere. Blue Origin has  been experimenting with technology that will allow humans to be shot to the boundary of the upper atmosphere and then parachute back down. However, there is a minimal demand for this type of space travel as  the trip itself is incredibly short lived, costs are high, and there are obvious safety hazards (Taylor 2021). This market will be capped pretty quickly, especially with advancements in other, more interesting parts of space travel, but it is still a pioneering technological advancement. 

Shockingly,  anywhere from 50-70% of the economic growth of this market won’t have anything to do with people traveling to space. Actually, it will be generated from satellite broadband internet access. Sending broadband satellites into space will drop the cost of data, possibly less than 1% of what it is today (Morgan Stanley 2020).

Another part of the industry being looked into extensively are orbital vacations. This would be sending people into space for one full orbit of Earth. The cost of this currently is in the millions as well, but the costs of the trips will fall as costs of production fall. Companies like Boeing, SpaceX and Axiom Space are already planning on sending small groups of people into orbit around earth for a few days before the end of 2022 (Taylor 2021).  

The final main component in the near future is lunar space travel. With billionaire Yusaku Maezawa’s $110 million dollar SpaceX trip planned for 2023, this is the most expensive option at the moment, but the maiden trip should spring lunar space travel forward tenfold, paving the way for more trips to the moon.

Private sector firms are making massive developments in technology, as  the ultimate goal of most companies is to send people to the moon and Mars.  Elon Musk, CEO of SpaceX has said multiple times that his goal is to colonize Mars. Currently, SpaceX is working diligently on reducing costs of space tourism by developing reusable rockets. They are making significant strides on this, as recently they have successfully landed on the moon with one of these reusable rockets, which will likely eventually land on Mars (Associated Press 2021). 

The key to advancing in this industry lies in reusable rockets. While Elon Musk has already had some success in this field, Jeff Bezos-backed Blue Origin is also making great strides. Their BE-4 Engine will power both of their spaceships they are attempting to use: New Glenn and ULA’s Vulcan (Wainscott and Sargent 2019). Elon Musk famously stated that his launches would only cost $62 million dollars for the Falcon 9 rocket, but he’s also stated that the ability to launch a reusable rocket would decrease this cost by another 30%. This was just the initial goal stated 5 and a half years ago. So far, reusable rockets have decreased prices by closer to 40% of that $62 million dollar price of launch (Smith 2020). The future of space tourism lies in the ability to continue to decrease these costs even further. 

As expected, interest in the public sector is greatly increasing. Many people have started to purchase tickets to travel to space with the only downside continuing to be the sky-high costs to travel to space. The growth of this industry is completely predicated on the ability of the various companies connecting the increasing interest in space travel to the actual product. The industry is waiting to erupt, but it won’t happen tomorrow. Years are needed for the technological advances that decrease the costs of production to a point that more people can travel to space. 

As appealing as space travel sounds, as technology continues to advance, there is a growing concern for the environment. The growing number of rockets being launched can contribute to climate change and harm Earth’s atmosphere. At the forefront of sub-orbital space travel are companies like Virgin Galactic, but, “a single Virgin Galactic suborbital space tourism flight, lasting about an hour and a half, can generate as much pollution as a 10-hour trans-Atlantic flight” (Pultarova 2021). 

Another big issue is the absolute uncertainty of space travel on climate change. There just isn’t enough known about what will happen with all these new emissions to the atmosphere. It is a dangerous game to wait and see what happens. Virgin Galactic is already making efforts to reduce their carbon emissions and footprint, especially  experimenting with cleaner fuel options. There are clear issues here that need to be addressed for this industry to continue to expand.

While there are clear hurdles that need to be considered, there is no denying the excitement surrounding this industry. There is little point in trying to predict what types of advances we will see in technology in these next years. There is no way to tell if this market will explode by 2040. But there are very clear, positive signs. The interest is there. SpaceX isn’t a publicly traded company, but Elon Musk has publicly claimed the company's valuation is $100 billion dollars (Sheetz 2021). Virgin Galactic had to delay another flight, causing a drop in stock price, but it’s still an exciting company valued at over $6 billion dollars currently. Blue Origin isn’t publicly traded either, but has been gaining traction recently. However, if one wants to get into the space tourism industry, large defense contractors like Lockheed Martin, Northrop Grumman, Leidos Holdings, and L3 Harris also all hold large business in the space industry (Bizouati-Kennedy 2021).

Not one company has a monopoly on space travel. Companies like SpaceX, Blue Origin, Virgin Galactic and others are on the forefront, are all competing with each other to provide the best experience possible to those who are able to travel to space, which should hopefully drive prices down as well. 

There are major causes to be excited about in the space tourism industry. Elon Musk and SpaceX seem primed to breakthrough with their advances in reusable rockets. There are many trips planned already, and more will continue to occur.  

References

Bizouati-Kennedy, Yaêl. “As William Shatner Takes off in Blue Origin's Rocket, Space Stocks Gain Attention Once Again.” Yahoo! Finance, Yahoo!, 13 Oct. 2021, https://finance.yahoo.com/news/william-shatner-takes-off-blue-171217511.html. 

Daehnick, Chris, and Jess Harrington. “Wall Street to Mission Control: Can Space Tourism Pay off?” McKinsey & Company, McKinsey & Company, 21 May 2021, https://www.mckinsey.com/industries/aerospace-and-defense/our-insights/wall-street-to-mission-control-can-space-tourism-pay-off. 

Langston, Sara M. “Space Tourists Will Face Big Risks, as Private Companies Gear up for Paid Suborbital Flights.” Space.com, Space, 10 Aug. 2020, https://www.space.com/space-tourists-big-risks-on-suborbital-flights.html. 

McDonald, Bob. “First Private Trip to the Moon Could Be a Tremendous Boost or Bust for Space Tourism | CBC Radio.” CBCnews, CBC/Radio Canada, 5 Mar. 2021, https://www.cbc.ca/radio/quirks/first-private-trip-to-the-moon-could-be-a-tremendous-boost-or-bust-for-space-tourism-1.5937240. 

Person, Reuters. “Factbox: Bezos, Branson and Musk: Who Is Winning the Space Tourism Race?” Reuters, Thomson Reuters, 7 July 2021, https://www.reuters.com/technology/bezos-branson-musk-who-is-winning-space-tourism-race-2021-07-06/. 

Press, The Associated. “SpaceX Launches and Lands Starship in First Successful Flight.” NBCNews.com, NBCUniversal News Group, 6 May 2021, https://www.nbcnews.com/science/space/spacex-launches-lands-starship-first-successful-flight-n1266476. 

Pultarova, Tereza. “The Rise of Space Tourism Could Affect Earth's Climate in Unforeseen Ways, Scientists Worry.” Space.com, Space, 26 July 2021, https://www.space.com/environmental-impact-space-tourism-flights. 

Sheetz, Michael. “Elon Musk's Spacex Hits $100 Billion Valuation after Secondary Share Sale.” CNBC, CNBC, 8 Oct. 2021, https://www.cnbc.com/2021/10/08/elon-musks-spacex-valuation-100-billion.html. 

Smith, Rich. “How Much Cheaper Are Spacex Reusable Rockets? Now We Know.” The Motley Fool, The Motley Fool, 5 Oct. 2020, https://www.fool.com/investing/2020/10/05/how-much-cheaper-are-spacex-reusable-rockets-now-w/. 

“Space: Investing in the Final Frontier.” Morgan Stanley, 24 July 2020, https://www.morganstanley.com/ideas/investing-in-space. 

Taylor, Dylan. “The Future of Space Tourism: Op-Ed.” Space.com, Space, 31 Mar. 2021, https://www.space.com/future-of-space-tourism-op-ed. 

Verdon, Michael. “Why the Future of Space Tourism Has Already Arrived.” Yahoo!, Yahoo!, 29 Aug. 2021, https://www.yahoo.com/now/why-future-space-tourism-already-130000421.html. 

Wainscott-Sargent, Anne. “The Coming of Space Tourism.” The Coming of Space Tourism - Via Satellite, 22 July 2019, http://interactive.satellitetoday.com/the-coming-of-space-tourism/.