Orbital space tourism business model

[baddux]

What do you think will be the business model / strategy for commercial orbital transport companies? And what would be the most commercially successful packet to offer?

Will it be as cheap as possible for as many customers as possible, for example if spacex is able to develop fully reusable F9 they could transport tourists in Dragon for 2 hours trip to orbit and back.

Or on the other end there could be 6 monts stay in the space station (Bigelow most likely) and that would cost probably nearly as much as todays space tourist trips. Then there would be only < 10 customers per year.

[dcporter]

The short answer to your question, as framed, is that it's much too early to be asking questions about something as specific as relative profit margins for completely theoretical ventures.  The different ventures have many too many question marks - for example, how close to its promised launch costs will SpaceX come?  At their final actual Falcon/Dragon Rider prices, how much would a two-hour joyride cost per seat, and is there a sustainable market for it at that rate?  Will Bigelow be able to ever launch a habitable station?  Et cetera.  These questions have been dissected extensively elsewhere in this forum.

[BobCarver]

Why spend the effort to get into orbit and then come right back down? 2 hours? More like 2-4 weeks would be much more enticing, especially if it involved a visit to a real space resort hotel with artificial gravity and zero-gee as well.

[QuantumG]

Why spend the effort to get into orbit and then come right back down? 2 hours? More like 2-4 weeks would be much more enticing, especially if it involved a visit to a real space resort hotel with artificial gravity and zero-gee as well.

There's been market surveys.. of the people who actually have the money to participate in such flights, most of them said anything more than a day is too much time out of their schedule.

[IRobot]

Why spend the effort to get into orbit and then come right back down? 2 hours? More like 2-4 weeks would be much more enticing, especially if it involved a visit to a real space resort hotel with artificial gravity and zero-gee as well.

There's been market surveys.. of the people who actually have the money to participate in such flights, most of them said anything more than a day is too much time out of their schedule.

2h is not orbit (well, maybe ONE orbit). That will be supplied by companies like Virgin.

Regarding that market survey, those are the roller-coaster gang, you need to aim for the guys who are willing to pay for several weeks in orbit.
Getting there will be 80-90% of the cost, so you can offer a lot for the remaining 10-20%. That means long stays.

[QuantumG]

What can I say.. multi-millionaires and billionaires don't tend to go on multi-week vacations. So you either have to reduce the cost or the duration.

[BobCarver]

What can I say.. multi-millionaires and billionaires don't tend to go on multi-week vacations. So you either have to reduce the cost or the duration.

If what you say is true (and you didn't provide any reference to these "surveys" by the way), then the business case for space tourism is probably dead.

[sdsds]

I doubt there are many spaceflight tourists who really want to poop or pee during their time in space. So my bet is there will be considerable demand for ~5 hour flights, like Mercury-Atlas 6; not so much demand for overnight stays in "space hotels."

[QuantumG]

If what you say is true (and you didn't provide any reference to these "surveys" by the way), then the business case for space tourism is probably dead.

Jeff Foust. Go pay your money and you too can read them.

[neilh]

What can I say.. multi-millionaires and billionaires don't tend to go on multi-week vacations. So you either have to reduce the cost or the duration.

I'd guess that a decent and steady internet connection would be a must to ensure that they stay at least partially connected with groundside business.

[mrmandias]

Agreed that its too early to do more than speculate wildly.

Also agreed that most people with a spare 10 or 20 million hanging around are high-pressure types with lots and lots to do and little leisure.  Which means short stays.  Since a day is enough to get the experience and since you're really buying conspicuous consumption/status/bragging rights with your trip, it really doesn't matter how long you stay. 

That said, if a space hotel could provide a decent working environment (a really, really good ground connection), then conceivably centimillionaires could stay up for a week or so and just do teleconferencing and such.  In fact, that would enhance the conspicuous consumption aspect of it, since your partners and peers would teleconference in to watching you float around in front of your screen.

One possible killer app for space hotels would be the discovery that low gravity or even microgravity has health benefits for the old or for people with weak hearts.  That's the sort of market where a guy with a few hundred million might be willing to spend a decent portion of that to feel young and spry again, and so what if it means he has to teleconference the rest of his life.  That's really speculative, though.

[jongoff]

One possible killer app for space hotels would be the discovery that low gravity or even microgravity has health benefits for the old or for people with weak hearts.  That's the sort of market where a guy with a few hundred million might be willing to spend a decent portion of that to feel young and spry again, and so what if it means he has to teleconference the rest of his life.  That's really speculative, though.

We don't have data yet for low-gravity, but microgravity seems very unlikely to have heart health benefits.

~Jon

[jongoff]

I doubt there are many spaceflight tourists who really want to poop or pee during their time in space. So my bet is there will be considerable demand for ~5 hour flights, like Mercury-Atlas 6; not so much demand for overnight stays in "space hotels."

Richard Garriot had a rather erm...detailed...discussion of "going #2" in microgravity. An interesting upshot is that without gravity helping stuff through your intestines, you don't tend to need to go as frequently (every few days typically). So overnight stays might not be such a big deal.

~Jon

[BobCarver]

You need both positive-gee and zero-gee zones in a space hotel. The zero-gee area would be recreational, while the positive-gee zone would be for maintaining health. Think of a rotating cylinder. The inner surface of the cylinder would provide the positive-gee area while the middle of the cylinder would be zero-gee.

[dcporter]

One possible killer app for space hotels would be the discovery that low gravity or even microgravity has health benefits for the old or for people with weak hearts.  That's the sort of market where a guy with a few hundred million might be willing to spend a decent portion of that to feel young and spry again, and so what if it means he has to teleconference the rest of his life.  That's really speculative, though.

We don't have data yet for low-gravity, but microgravity seems very unlikely to have heart health benefits.

~Jon

Nonsense, I heard all about it in that documentary, Contact.

[IRobot]

Also agreed that most people with a spare 10 or 20 million hanging around are high-pressure types with lots and lots to do and little leisure.  Which means short stays. 

BHUAHAHAHAHAHAH. That was soooo naive!!! Most millionaires (or their families) don't work! Or have a fake job to maintain moral superiority!

Want to see people with 10-20 millions, with lots of free time? Go see luxury sailboats and motorboats sales. Some people sail for 1 or 2 years in a row, on luxury yachts over 2 million.
Those people have so much free time they get bored!!

[QuantumG]

Name them.

You can't. They exist in your imagination.

[jongoff]

You need both positive-gee and zero-gee zones in a space hotel. The zero-gee area would be recreational, while the positive-gee zone would be for maintaining health. Think of a rotating cylinder. The inner surface of the cylinder would provide the positive-gee area while the middle of the cylinder would be zero-gee.

Maybe. But as I note, it would be good if we actually got some data on how low, but non-zero gravity levels impact human health. Right now we have several billion data points that say 1G definitely works, and a couple hundred data points that suggests "0G" doesn't work so well. But only about twelve, very brief and poorly documented data points for any duration at levels greater than 0G but less than 1G. For all we know there could be a sweet spot that is high enough to avoid the deleterious effects of 0G while low enough to avoid the deleterious effects of 1G. Or there might not be a sweet spot at all, and you need most of 1G to be useful. Or it could be linear. It'd be great if some day someone would actually get that data.

~Jon

[jongoff]

Name them.

You can't. They exist in your imagination.

BTW, I'm with QG on this one--most of the previous studies indicated that getting rid of the six month training effort in Russia could help increase the demand for orbital space tourism noticably.

My guess though is that in order to see sufficient demand to really start driving things in an interesting direction, you'll need to see:

1- Training that requires less time commitment than say SCUBA training (weeks not months), which can be performed entirely in the US (preferably locally).
2- Price points of less than $5M per person for the whole flight experience

~Jon

[dbhyslop]

I disagree with the idea that the training has to be reduced to several weeks.

I think that if you could satisfy Jon's second point, price point of $5M or less, you would have dramatically more participants even if you can't eliminate the time commitment.  I'd guess there are probably an order of magnitude more people who are able to dispose of $5 than $20M.

One market analogy might be a guided climb of Mt. Everest.  It costs $75-100,000 which is small potatoes for many of the people who do it, but it requires dedicating an entire month to being in the Himalayas and probably an entire year of intensive training 4-6 hours per day.  Some guide services also insist on experience on other peaks like Mt. McKinley, which involves a month disconnected in Alaska the year before.

Analogy is a crude tool even at its best, and I will grant that the comparatively low price means there are more people that could afford an Everest climb than spaceflight even in a perfect future.  However the intense, long term training involved effectively precludes the "working wealthy."  But there are still enough people who can afford to essentially drop everything for a year+ to devote to it.

GC disputes the idea that there are considerable "nonworking wealthy."  I own a business that deals frequently with wealthy people, and I can assure you they don't only exist solely in IROBOT's imagination.  While many of my clients have been the traditional type-A work-addicts, you'd be surprised how many keep themselves extremely busy at things like sailing themselves to different ports of call or flying Netjets back and forth to the Keys to scuba dive.

[QuantumG]

you'd be surprised how many keep themselves extremely busy at things like sailing themselves to different ports of call or flying Netjets back and forth to the Keys to scuba dive.

I know a few people like that myself.. they're far from being millionaires who have the kind of money we're talking about here.

[Orbital Debris]

Links posted on the Bigelow thread indicate ~35 million for 3 months. 

I would agree that no single billionaire would be away from business for extended stays.  Extensive comm coverage means investing in bandwidth and ground stations.  Extended stays mean extensive training.

I think extended stays would be oriented toward sovereign nations and corporate.

As far as health affects - the negative (calcium loss, radiation) effects of zero g would outweigh health effects.  Calcium sloughing begins within a 24 hours of reaching orbit. 

[dbhyslop]

I know a few people like that myself.. they're far from being millionaires who have the kind of money we're talking about here.

Two individuals I'm thinking about specifically with about $100M total.  If I was collecting about 7% a year I wouldn't be too afraid to burn $5M on an experience like this.

I assume that there would also be people with less money who do it who really can't responsibly afford it.  There are mailmen who quit their jobs and take second mortgages to climb Everest.  For a spaceflight, that might mean people with $10-20M who are willing to burn a substantial portion of their wealth.

[vulture4]

I believe the Aerospace Corp study found that a significant market would require a price <$2M to LEO. Space Adventures sold a handful of seats at $20-$30M but not enough for a viable business model. I have not heard anyone offer $60M, the current price. If we want more than a handful of people to ever fly in space a substantial reduction in cost is essential.

[baddux]

Even if it would be possible to stay longer in orbit what would the customers do there for several days (or weeks or months)?

It will be great to look at the window and experience zero-g but I believe it's not enough once you have experienced those. Every day in orbit will cost a lot anyway so not a good deal to go there and read books or do business work online.

And if for example 1 hour is enough to experience space do you actually want to go to orbit would it make more sense to do a longer 500km/1 hour suborbital trip. You don't notice it anyway whether you are freefalling towards the earth or next to the earth.

[A_M_Swallow]

An hour in a place is a change of flight.  So this is pointing towards 2 or 3 day holidays.  There are plenty of long weekend trips around.

[mrmandias]

Links posted on the Bigelow thread indicate ~35 million for 3 months. 

I would agree that no single billionaire would be away from business for extended stays.  Extensive comm coverage means investing in bandwidth and ground stations.  Extended stays mean extensive training.

I think extended stays would be oriented toward sovereign nations and corporate.

As far as health affects - the negative (calcium loss, radiation) effects of zero g would outweigh health effects.  Calcium sloughing begins within a 24 hours of reaching orbit. 

For geriatric retirement, you don't care about calcium loss if you are not planning on returning, and radiation is really only a risk for long-term cancer, which isn't nearly as much a concern if you are already old.

That is not to say that geriatric retirement is a good idea, we have little data at the moment and what data we do have suggests that zero-g is bad for you even in ways that oldsters would care about.  But we can't say for sure that there's no gravity point where ther are health benefits and where the old feel young again.   Maybe the killer app for space is something like .8 g,  where again centimillionaires can feel vigorous and strong again.  Might that be worth $100 mill to someone whose worth $200 mill?  Quite possible.

[billh]

Space Adventures sold a handful of seats at $20-$30M but not enough for a viable business model. I have not heard anyone offer $60M, the current price.

They've sold every seat that was available. The reason you haven't heard about any flights recently is that since the shuttle stopped helping with ISS crew rotations every seat on the Soyuz is needed for that purpose. The latest word is that there won't be any more seats available than 2015 at the earliest. They have people like Sergey Brin of Google on the waiting list right now.

[Valerij]

Links posted on the Bigelow thread indicate ~35 million for 3 months. 

I would agree that no single billionaire would be away from business for extended stays.  Extensive comm coverage means investing in bandwidth and ground stations.  Extended stays mean extensive training.

I think extended stays would be oriented toward sovereign nations and corporate.

As far as health affects - the negative (calcium loss, radiation) effects of zero g would outweigh health effects.  Calcium sloughing begins within a 24 hours of reaching orbit. 

I assume that enough expensive long (2-3 months) flight in space hotel too quickly becomes popular. And $35M the real price for such flight.

1) Such flight close enough analogy to long sea cruise.

2) For businessmen of video of conference instead of direct participation solve the majority of problems. The Internet and a reliable communication allow the businessman not to come off for a long time management of the enterprises.

3) Rupture of the prices between short-term stay in an orbit and long space cruise will create atmosphere elite "the closed club". In a year only 20-30 persons can visit such mode in hotel.

4) Travel companies will certainly undertake efforts for increase of popularity of such flights. For example, they can send in hotel of any celebrities, known politicians, sportsmen or popular actors, is possible after their career end. And pay flight of this celebrity sponsors can, and this event can be used in the advertising company of the sponsor.

But creation of "space hotel" and a spaceship which will bring to this hotel of clients, very much will accelerate the future events

[JohnFornaro]

Some people sail ... on luxury yachts over 2 million.

You need to double check the prices, my friend.  Unless by "over", you mean a factor of ten or so.

But your larger point, that rich folks have plenty of leisure time, still holds.  The other point also holds, which Jon Goff touches on, is that 6 months of "training" is not seen as "vacation".  Note the different spellings.  OI'm going out on a limb here, but, when you buy your yacht, you don't want to be swabbing the poop deck, working in the engine room, yada yada.  Whatever "training" or "orientation" is needed should be on the order of a few weeks.

In 1990, a wealthy client of mine sold off his business to the tune of low nine figures, and spent at least the next ten years on his yacht.  But these are anecdotal stories, and mine could be countered with the fellow who's net worth is only in the low seven figures, who works sixty hour weeks, and only takes off the long weekend or two.

Such flight close enough analogy to long sea cruise.

Well no.  The analogy is only similar in the length of time, about three months.  I assure you that it is far more interesting to spend $100-$200K to cruise Earthly ports than it would be to spend those three months and $35M looking at the stars, your four walls, and pooping less frequently.

[QuantumG]

Not to mention that a yacht is an asset.

Now, if you were talking about rich folks buying reusable space planes, then we might have a ball game.

[Valerij]

Such flight close enough analogy to long sea cruise.

Well no.  The analogy is only similar in the length of time, about three months.  I assure you that it is far more interesting to spend $100-$200K to cruise Earthly ports than it would be to spend those three months and $35M looking at the stars, your four walls, and pooping less frequently.

I perfectly understand a difference between round-the-world sea cruise in cost $100K - $200K and space cruise $35M. Modern owners of the largest yachts have enough money what to order space cruise. And the basic advantage from their point of view will be that such cruise is accessible to very limited number of people.

It is not enough such clients, all no more than several tens a year. But it is quite enough, possibilities of space hotel too are insignificant, no more than twenty-thirty visitors in a year. And they will not buy inexpensive tickets for suborbital flights or for some hours in an orbit

[dcporter]

Not to mention that a yacht is an asset.

Mmmmm not sure this is applicable the way you think. Put "hole in the water you throw money into" into Google and poke around.