The Emerging Orbital Space Tourism Industry: New Insight into Demand and Prospects for Success

The orbital space tourism industry is beginning to gain traction with significant progress made by leading companies such as Space Adventures, Virgin Galactic, Rocketplane-Kistler, Space Exploration Systems (SpaceX), and Bigelow Aerospace. A host of other organizations are seeking to contribute to this future of spaceports, space trips, and space training. However, with a limited number of tourists to date, the orbital space tourism industry is still very much in its embryonic stage, and there is a great deal of uncertainty about the size, composition, and viability of the market. SpaceWorks Engineering, Inc. (SEI) investigated two Low Earth Orbit (LEO) space tourism case studies, space tourism without an orbital hotel destination and space tourism with an orbital hotel destination. An online internet survey of select experts and the general public and a spreadsheet based economic simulation of supply and demand were conducted. The survey posed both qualitative and quantitative questions in an effort to contribute to the current knowledge about demand for orbital tourism. Unique by comparison to surveys of the past, this survey also sought to quantify the uncertainty surrounding this market. Survey participants were asked a series of general questions about orbital space tourism, followed by questions about the expected number of potential customers at price points of $10, $15, and $20 million. Participants were also asked about the degree of certainty they had in their estimates. Modeling and simulation considered both the demand and supply aspects of space tourism to determine the market conditions and price points necessary for an orbital space tourism vehicle operator to be financially successful. The model is unique in that it considers the business case for orbital space tourism, not just a forecast of demand. Both a deterministic and a probabilistic analysis were completed to account for uncertainty in factors such as costs of the orbital space tourism company and growth rate of the market. The results demonstrate that orbital space tourism companies can be successful, measured in terms of net present value (NPV), with a price per passenger in the $12 to $20 million range (FY 2006).