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Future of Space Tourism Entrepreneurship

Presentation · May 2022

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Lukman Raimi
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 Future of Space Tourism
Entrepreneurship
Understanding the Business Models of the Three Players

Dr. Lukman Raimi 30 May 2022 at 14:00 EET CY time

 Webinar Objectives
1. To share valuable insights about space tourism entrepreneurship, its
business model, target markets, profit logic and pricing.

2. To sensitize academic community on diverse investment outlets and

huge economic opportunities in the space tourism industry.

3. To highlight the legal, economic and ethical concerns in the emerging

space tourism entrepreneurship.
 Presentation Outline
1. Declaration
2. Introduction and Problem Identification
3. Theoretical Foundation for the discourse
4. Definition of Space Tourism Entrepreneurship (STE)
5. Legality of Space Tourism
6. Space Industry Versus Space Tourism Sector
7. Target markets of space tourism: Mass or Niche Market
8. Tourists Choice Behaviours, Motives and Type of Services
9. Three Lead Players, New Competitors and Disruptive Technologies
10. Business Models, Pricing Models and Profit Logic
11. Legal and ethical concerns in space tourism
12. Conclusion
 Declaration
• Entrepreneurship is a rapidly evolving field of knowledge and practice that
touches Schumpeterian entrepreneurship and Non-Schumpeterian
entrepreneurship.
• This webinar is related to digital entrepreneurship and disruptive
entrepreneurship because space tourism is the expansion of tourism
industry frontier (Cohen, 2017).
• I recently submitted a case study on space tourism entrepreneurship (STE)
to The Case Centre, United Kingdom.
 Introduction & Problem Identification
• Desire to travel to space for fun and adventure has been the dream of
ultrarich in developed countries for ages, but lack of technology
enablers have been the primary barrier hampering the dream.
• Invention of novel spaceships and rockets driven by AI and robotics
has made space tourism a reality!
• Now, large numbers of space tourists and pleasure seekers can travel
to outer space at a relatively affordable cost.

• Beyond the media hype, the public failed to see the entrepreneurship
side of space tourism. This webinar seeks to close this perception!
 Theoretical Foundation for the Discourse
Diffusion of innovation theory (DIT) explicates the process of communication,
diffusion and adoption of new innovation to different categories of adopters in the
social system (Roger, 1962, 2010).
1. Innovators/Techies (2.5%)
2. Early Adopters/Progressives (13.5%)
3. Early Majority/Pragmatists (34%)
4. Late Majority/Conservatives (34%)
5. Laggards/Skeptics (16%)
 Legality of Space Tourism
United Nations developed the international space law (Outer Space Treaty) that
was ratified by member states in 1967 (Hobe, 2007; Ferreira-Snyman, 2014). The
international space law is based on the following nine (9) principles:
1. The exploration and use of outer space should be for the benefit and in the
interests of all countries and shall be the province of all mankind;

2. Outer space is free for exploration and use by all states;

3. Outer space is not subject to national appropriation by claim of sovereignty, by

means of use or occupation, or by any other means;

4. States shall not place nuclear weapons or other weapons of mass destruction
in orbit or on celestial bodies or station them in outer space in any other
manner.
 Legality of Space Tourism
5. The Moon and other celestial bodies shall be used exclusively for peaceful
purposes;

6. Astronauts shall be regarded as the envoys of mankind;

7. States shall be responsible for national space activities, whether carried out by
governmental or nongovernmental entities;

8. States shall be liable for damage caused by their space objects; and

9. States should avoid harmful contamination of space and celestial bodies.

Defining Space Tourism Entrepreneurship
• Space tourism refers to recreational space travel by tourists reaching
orbital and suborbital space on government-owned vehicles or on vehicles
fielded by private companies (Seedhouse, 2021).

• Space tourism entrepreneurship on the other hand refers to a commercial

space travel business model that responds to the yearnings of the ultrarich
to travel to space for fun, recreation, vacation and other adventures
(Carlen, 2016).
 Space Industry Versus Space Tourism Sector
• Space industry encompasses
manufacturing, IT, Telecoms and
service sectors within space economy
including emerging space tourism
sector (Henderson & Tsui, 2019;
Revfine.com, 2021).
• It is worth approximately $400 billion
in 2022. It will be worth $805 billion by
2030.
• However, the emerging space tourism
sector will be worth $3 billion by 2030.

Source: Space Ventures Investors Limited (2020)

 Target markets of space tourism: Mass or
Niche Market
Christy (1947) restated: ‘If wishes were horses, beggars could ride’

Space tourism is not for the poor and struggling members of society. Target
markets for space tourism include upper-class, affluent educated elites, rich
pleasure seekers, wealthy adventurers, millionaire, and billionaires among
others. However, the poor could be sponsored!

Space tourism is a niche market. Reaching the target groups is via (a)
Bloomberg Billionaire Index (BBI) and (b) Tourists choice behavioural
characteristics.
 Target markets: Top 20 in Bloomberg
Billionaire Index

Source: Bloomberg Billionaires Index (2022)

 Tourists Choice Behaviours, Motives and
Type of Services
• Tourists choice behaviour for space tourism has been grouped into four choices:
(a) high altitude jet fighter flights, (b) atmospheric zero-gravity flights, (c) short-
duration suborbital flights, and (d) longer duration orbital trips into space (Crouch
et al., 2009).
• The motivational factors behind space tourism are: (a) vision of earth from
space,(b) weightlessness, (c) high speed experience, (d) unusual experience,
and (e) scientific contribution (Reddy et al., 2012).
• Currently, high-altitude jet fighter flights and atmospheric zero-gravity flights are
commercially available to space tourists (Henderson & Tsui, 2019)
 Three Lead Players and New Competitors
Apart SpaceX,, Blue Origin, and Virgin Galactic), other competitors are:
1. Nanoracks,
2. Planet Labs
3. Absolut Systems
4. Redwire
5. Rocket Lab
6. Made In Space
7. Ad Astra Rocket Company
8. Nanoavionics
9. Sierra Nevada Corporation
10. Zero 2 Infinity
Source: Seeking Alpha (2022) 11. Boeing
 Disruptive Technologies in Space Tourism
1. SpaceShipTwo: This is a reusable space plane developed by Virgin Galactic
for flying tourists into suborbital space. It has the capacity to carry 2 pilots and
6 tourists/passengers.
2. New Shepard’s rocket-and-capsule: This is an automated spaceship of
Blue Origin powered by rocket-and-capsule with capability to flying 6
passengers/tourists into suborbital space without a pilot.
3. Dragon capsule: This is a reusable Falcon rocket spaceship of SpaceX with
capability to fly 7 passengers/tourists to the suborbital space.
4. Starship spacecraft and Super Heavy rocket: These are novel spaceships
of SpaceX with capability to fly few astronauts and tourists.
5. Soyuz spacecraft: This is a Russian spaceship with capacity to carry 3
astronauts/tourists.
Disruptive Technologies in Space Tourism
 Business Models of Space Tourism
Enterprises
Business model is a plan of how a business creates, delivers, and captures value
for its multiple stakeholders (Barringer & Ireland, 2016).
The three billionaire entrepreneurs – Richard Branson,
Jeff Bezos and Elon Musk have created a niche market
with huge market opportunities in space tourism.

Five business models in the space tourism industry are:

(a) auction business models, (b) low-cost business
models, (c) competitive pricing models, (d) high-cost
business models, and (e) contract-based business
models.
 Pricing Models and Profit Logic
The cost structures and pricing models of the leading players differ, and the profit
logic is promising with first-mover economic profits.
1. SpaceX offers three passengers $55 million each for their seats on its
spaceship. .

2. Space Perspective announced $125,000 per tourist on its Spaceship Neptune.

3. Virgin Galactic offers a seat aboard its space plane for $450,000 each.
4. Blue Origin is yet to disclose a ticket price, but Justin Sun (CEO of Tron) paid
$28 million to secure a seat in the space mission of July 2021.
5. On Soyuz spacecraft, Japanese billionaire Yusaku Maezawa paid €71 million
or over $80 million for his space trip.
6. Roscosmos offers $50 million to $60 million for customized Trip.
Sources: Tan (2021) Cao (2021)
 Investment in Space Tourism Start-ups

Source: https://brycetech.com/reports
 Breakdown of Space Tourism Start-up
Investments in 2020

Source: Brycetech (2022)

 Entrepreneurial Outcomes in Space Tourism
1. Revolutionalising space travels 9. Biomedical exploits
2. New employment opportunities 10. Space colonization
3. Low-cost space educational 11. Bringing life to other planets
travels 12. Space recreation centres and
4. Income redistribution hotels
5. Space investment 13. Space Vacations and Shopping
6. Creation of more space 14. Space Citizenship
technology solutions 15. Space Movie production
16. Growth of the world economy
7. Improved Revenue Streams
8. Building space stations

UCF (2016) Opinion: Space Tourism

 Legal and Ethical Concerns in Space Tourism
1. Legality of resource extraction in the space is challenged because the United
Nations Assembly resolution 2222, XXI of January 1967 stated that the solar
system is the Common Heritage of Mankind. Is that the case now?
2. Likelihood of turning the space to an arena of political contestations and
economic wars by the United States, Russia, China, Ukraine and other
nations with space tourism capabilities. Is this not an existential threat?

3. Wastage of huge resources on space tourism in the midst of poverty and

deprivation in developing countries.
4. Deflowering of pristine nature of celestial bodies by space tourism.
 Legal and Ethical Concerns in Space Tourism
5.Utility gain in space adventure that cost Jeff Bezos $5.5 billion could have been
spent to end poverty, hunger and depravation of 37 million people in the world.

6. Environmental risk of space tourism through mishaps and accidents pose

threats to the planet, people and plants and animals from outer space.

7. Space rockets generates carbon footprints/emissions more than normal air

travel.

8. The accumulated black carbon cannot be washed away by rain or winds and
would linger in the stratosphere for years, aggravating climate change.

Sources: Cohen (2017); Martseniuk (2020), Marshall (2022) Onder (2021)

Conclusion
Thank You!
 References
• Bloomberg Billionaires Index (2022) Top 500 Richest people. https://www.bloomberg.com/billionaires/
• Brycetech (2022) Start-Up Space UPDATE ON INVESTMENT IN COMMERCIAL SPACE VENTURES.
https://brycetech.com/reports/report-documents/Bryce_Start_Up_Space_2022.pdf
• Cao, S. (2021) Every Space Tourism Package Available in 2021 Ranked: From $125K to $60 Million.
https://observer.com/2021/11/commercial-space-travel-roundup-spacex-blue-origin-virgin/
• Carlen, J. (2016). A Brief History of Entrepreneurship. Columbia University Press.
• Christy, E. V. A. (1947). If wishes were horses beggars could ride. Nicholson and Watson.
• Cohen, E. (2017). The paradoxes of space tourism. Tourism Recreation Research, 42(1), 22-31.
• Crouch, G. I., Devinney, T. M., Louviere, J. J., & Islam, T. (2009). Modelling consumer choice behaviour in space
tourism. Tourism Management, 30(3), 441-454.
• Ferreira-Snyman, A. (2014). Legal challenges relating to the commercial use of outer space, with specific reference to
space tourism. Potchefstroom Electronic Law Journal, 17(1), 1-50.
• Henderson, I. L., & Tsui, W. H. K. (2019). The role of niche aviation operations as tourist attractions. Air transport: A
tourism perspective, 233-244.
• Hobe, S. (2007). Legal aspects of space tourism. Neb. L. Rev., 86, 439.
• Marshall, A. (2022) The solar system belongs to us all, not just Jeff Bezos.https://www.space.com/solar-system-belongs-
to-us-all
• Martseniuk, L. (2020). Legal Aspect of the Spece Industry Development in Ukraine and Space Tourism in
Particular. Scientific Bulletin of Dnipropetrovsk State University of Internal Affairs. Special Issue № 1, 294-
299
 References
• Onder, H. (2021) On space barons and global poverty. https://www.brookings.edu/blog/future-development/2021/09/09/on-
space-barons-and-global-poverty/
• Reddy, M. V., Nica, M., & Wilkes, K. (2012). Space tourism: Research recommendations of the future of the industry and
perspectives of potential participants. Tourism Management, 33(5), 1093–1102. doi: 10.1016/j.tourman.2011.11.026
• Revfine.com (2021) Space Industry. https://www.revfine.com/space-industry/
• Rogers, E. M. (1962), Diffusion of Innovations, New York, Free Press of Glencoe
• Rogers, E. M. (2010). Diffusion of innovations. Simon and Schuster.
• Seedhouse, E. (2021, October 13). space tourism. Encyclopedia Britannica. https://www.britannica.com/topic/space-tourism
• Tan, H. (2021) Japan's billionaire space tourist gives away money as he returns to Earth.
https://www.businessinsider.com/japans-billionaire-space-tourist-gives-money-as-he-returns-2021-12
• UCF (2016) Opinion: Space Tourism - UCF professors debate the pros and cons of space tourism.
https://www.ucf.edu/pegasus/space-tourism/
• Seeking Alpha (2022) What is next for space tourism? Ask Boeing, Marriott and Delta.
https://seekingalpha.com/news/3717500-what-is-next-for-space-tourism-ask-boeing-marriott-and-delt
• Space Ventures Investors Limited (2020) Space Tourism – An Evolving Industry - Small Space Craft with Massive
Implications, https://spaceventuresinvestors.com/html/space-tourism.html
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