Commercial space travel (or space tourism), once confined to the realm of science fiction, has entered a new era of serious investment and development.
Figure 1 below shows the cumulative number of human spaceflights from 1961 to November 2023, marking a clear rise in government-led and private space missions. For much of the 20th century, space exploration was dominated by government space agencies, steadily increasing the number of human spaceflights. However, from the early 2000s onwards, private companies have started to contribute more significantly, and their presence has surged, especially in recent years. This growth mirrors the ongoing development in space tourism as pioneering private firms like SpaceX, Blue Origin, and Virgin Galactic spearhead technological advancements, making the dream of ordinary citizens voyaging to space more likely to become a reality.
Figure 1: Cumulative Human Spaceflight (1961 – 2023)
As exciting as these latest developments are, significant technological, economic, regulatory, and environmental barriers remain that must be addressed before space travel becomes widely accessible.
This article will explore the current landscape of commercial space travel, the challenges hindering its progress, and the potential solutions.
Written by: Shirley Mabasa
The current commercial space tech landscape
Technological advancements in satellite technology, launch vehicles, and increased space exploration missions by commercial players and government agencies have been the key drivers of the space market's growth and expansion.
The commercial use of space technologies (currently estimated to be between 60-70% of all space travel) has seen remarkable growth compared to the two other traditional uses of space tech, i.e., government (30%) and military (8%). This trend has driven the explosion in the number of space tech firms and investments in space tech start-ups globally. Private sector investment will continue to be an important driver of innovation and growth for the space tech sector. Since 2015, the global space tech sector has attracted over $47bn (£32bn) in private capital. The UK has been the second-largest beneficiary of this funding (behind the US), with roughly 17% of this figure received.
The global space technology market size was valued at $443.2 (£332.4) billion in 2023 and is expected to reach around $916.85 (£687.6) billion by 2033 (CAGR of 7.54% from 2024 to 2033). PWC estimates that the number of unique investors into space companies grew from 274 to 558 between 2020 and 2022.
Figure 2: Space technology market size
Source: Precedence Research
The Players Driving Innovation in the Commercial Space Sector
In the last decade, several ground-breaking innovations have materialised, primarily driven by three key players: Space X, Blue Origin and Virgin Galactic. These innovations and developments helped propel this sector's growth projections into the stratosphere.
SpaceX, revolutionised orbital travel through its Dragon spacecraft and plans for missions that could one day take private tourists to Mars. Their work not only furthers space tourism but also provides the technological foundation for broader space exploration. Looking ahead, SpaceX aims to enable lunar tourism and even missions to Mars with its Starship rocket, which is designed for longer journeys and greater payloads.
Blue Origin, with its New Shepard system, has focused on suborbital flights, offering passengers a brief experience of space beyond the Kármán line with unparalleled views of Earth. Blue Origin is also working on more ambitious projects, including lunar exploration and heavy-lift rockets like New Glenn, positioning itself as a significant player in both space tourism and broader space missions.
Virgin Galactic, with its SpaceShipTwo (VSS Unity), provides suborbital flights that include moments of weightlessness, targeting the tourism sector more directly with shorter, accessible trips. Virgin Galactic completed its first fully crewed flight in 2021, marking a milestone in making space tourism a reality.
As has been the case in many other industries, the most significant advancement in the commercial space industry has been the integration of Artificial Intelligence (AI).
AI plays a crucial role in improving the safety and efficiency of space travel. AI-driven systems monitor spacecraft functions in real time, predicting and preventing potential failures before they become critical. For example, predictive maintenance algorithms can analyse spacecraft data to detect issues, allowing for timely repairs that reduce the risk of mechanical failures during a mission. These advancements minimise human error and ensure space flights are safer for crew and tourists.
AI also enables autonomous navigation of spacecraft, optimising flight paths and making in-the-moment decisions to ensure smooth and efficient journeys. This reduces the reliance on ground control and enhances the reliability of space missions. Spacecraft like SpaceX's Starship incorporate AI to assist in real-time decision-making, which is essential for future long-duration space missions.
AI is also reshaping the tourist experience itself. Space tourism companies are integrating AI-powered concierge services that offer personalised experiences to passengers. These systems can manage everything from adjusting the environmental settings inside the cabin to offering customised virtual reality experiences that enhance the overall journey. By providing tailored experiences based on individual preferences, AI helps make space travel more immersive and enjoyable.
Lastly, AI could further reduce costs in future and make space tourism more affordable and accessible to a larger group of people.
Despite the progress made, significant barriers remain
Technological Barriers
One of the biggest challenges for commercial space travel is reducing the cost of spaceflights. Early space missions used expendable rockets, where most of the vehicle was lost after each launch, making each mission exorbitantly expensive. SpaceX’s innovation in rocket reusability has addressed this issue to an extent. However, while reusable rockets can significantly cut costs, they are still in their infancy and require substantial engineering advancements to be sustainable for mass commercial use.
Another hurdle is the lack of space infrastructure. Currently, human spaceflight is dependent on a small number of space stations like the International Space Station (ISS) and government-controlled facilities. For commercial space travel to expand, there will need to be a wider network of space stations, refuelling depots, and potentially even spaceports orbiting Earth and beyond. Building this infrastructure will require international cooperation, private-sector investment, and significant technological innovation.
Regulatory Barriers
The commercial space industry operates under a complex web of national and international regulations. In the U.S., for example, the Federal Aviation Administration (FAA) is responsible for issuing commercial space licences, while other agencies like NASA and the U.S. Department of Defence regulate space activities.
These regulatory frameworks are essential for ensuring safety, but they also create significant hurdles for private companies. The process of obtaining launch licences can be lengthy and expensive, and regulations often vary between countries, making it difficult for companies to operate internationally. Furthermore, space treaties established during the Cold War, such as the Outer Space Treaty of 1967, were not designed with commercial space travel in mind, so new international agreements may be necessary to facilitate this emerging industry.
Safety Concerns
For space travel to be viable for civilians, ensuring safety is paramount. Currently, spaceflight still carries significant risks, even for highly trained astronauts. Incidents like the 1986 Challenger disaster, the 2003 Columbia accident, and, more recently, the failed Virgin Galactic test flight in 2014 serve as reminders of the dangers inherent to space exploration. While space agencies and private companies have made great strides in minimising risks, they have yet to achieve the level of safety required to gain widespread public trust.
Continued innovation in rocket reusability, space infrastructure, and safety technologies will help bring down costs and make space travel more accessible. Meanwhile, advances in regulatory frameworks and international cooperation will help resolve legal and environmental concerns.
Another key consideration is the sustainability of the space industry, which is discussed in depth in this LVCN article.
Space travel will not become routine overnight, but the progress made over the past decade shows that the industry is moving in the right direction. With sustained investment and collaboration between governments, private companies, and international organisations, humanity may soon be able to break through the final frontier and open space travel to all.
On that hope-filled note, it is important to remember that in this context, commercial doesn’t mean for everyone, just the one per cent.
So, what will drive demand for Space Tourism?
Space companies insist that the demand for their services is “strong”, but all have been relatively tight-lipped about the actual numbers.
In 2002, the Futron space tourism report projected that by 2021, demand for suborbital space tourism could reach over 15,000 passengers annually, with revenue exceeding $700 million. Early projections set ticket prices at around $100,000, gradually decreasing to $50,000 by 2021, making space travel more feasible for wealthy individuals seeking unique experiences beyond Earth's atmosphere. Based on that report, this study modelled the total addressable market for space tourism under various scenarios (see figures below).
Figure 3: Total Addressable Customers by Ticket Price Point
Naturally, there is an inverse relationship between the ticket price and the total addressable customer base. This relationship, however, is very sensitive to the assumption around the proportion of net worth UHNWIs are willing to spend on this once-in-a-lifetime opportunity.
Assuming that UHNWIs are willing to spend a maximum of 1.5% of their net worth, the addressable market at a $250,000 price point is around 156,170 individuals. However, when customers are assumed to spend up to 10% of their net worth, the pool of potential customers jumps to over 1.6 million at the same price point. This stark contrast highlights the elasticity of demand in ultra-luxury markets like space tourism. As ticket prices increase, the number of addressable customers declines sharply in both scenarios, but the 10% threshold supports a much larger potential customer base even at higher ticket prices. The takeaway is clear: the more individuals are willing to dedicate a larger share of their wealth, the more viable space tourism becomes.
Fast-forward to 2023, the number of passengers is nowhere near those initial estimates. According to NASA, 280 individuals across 23 countries have visited the International Space Station. The total number of people who have gone to space as of November 2023 is 676.
Source: NASA
There have been notable reductions in the cost of space travel, but ticket prices vary significantly. Virgin Galactic’s 90-minute sub-orbital joyride will set you back nearly half a million. A 12-minute ride on Blue Origin’s Quick Rocket is far more expensive at roughly $28 million. If all goes well, the space dream could become a reality for just $ 125,000 on Space Perspective’s hot air balloon (yes, you read that right).
Cheaper rides and an increasing number of billionaires seem like the perfect recipe for a booming market. The figure below shows the number of billions by category. The number of dollar billionaires increased from 2170 in 2013 to 3194. Even more remarkable is the growth in the number of individuals in the $30m-$100 wealth tier, which grew from 146610 in 2013 to 335460 in 2023!
If billionaires are willing to spend $750,000 to dive into the Mariana Trench, it’s no stretch to imagine them eagerly shelling out a few million more for space tourism—especially with companies like SpaceX and Blue Origin offering a more celestial thrill ride. Billionaires are just hardwired to chase the next frontier, whether it’s the ocean's depths or the space's vacuum. And let’s face it, zero gravity beats a cramped submarine any day.
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