Extensive travel by air, sea, and land for pleasure and business is a commonplace fact of modern life. In contrast, travel in space has only been available essentially to a small number of highly trained government astronauts, and the public's perception is that it cannot be otherwise. This paper shows that due to the very large profit potential, in fact Public Space Travel (PST) or "Space Tourism", routinely available to the general public at affordable prices, is much closer at hand than most people realize.

PST is sure to become a huge commercial space industry in the near future, and completely dwarf all conventional uses of space. The paper is based on a study performed by the author for the Aerospace Corporation, as part of an assessment of the future potential markets for launchers.

PST can really only start in earnest for the masses when people can travel into low Earth orbit and return, with orbital stays from a few orbits to a few days. While Public Space Travel will surely evolve through a number of stages beginning with ground theme parks and space camps, and progress to suborbital trips with a few minutes of weightless experience, it really cannot be expected to attract a sufficient number of people to become "space tourism" per se. While eventually it is clear that attaining large tourist rates will require cruise ship-like accommodations in orbital hotels, this is not necessary for the initial businesses to flourish.

The biggest impediment to the start of the orbital phase is that the transportation vehicles do not yet exist that could be both economical enough to acquire and operate, and reliable enough to lend confidence to tourists, and thus have a hope of generating and then meeting the anticipated market demand. Since this is a "chicken and egg" situation, this study set up a number of paper businesses to see if there were a way that PST could indeed be defined, started, and operated as a sufficiently profitable business to attract the required initial capital.

A number of market surveys have been conducted, which though rudimentary clearly indicate that a surprisingly large number of people wish to go into space, and would do so if the ticket price were reasonable. The principal surveys were done by Collins in Japan, by the CSTS group for NASA, and by Society Expeditions and Yankelovich in the USA. The results of these and other derived surveys are shown in Figure 1, and indicate the magnitude and elasticity of the potential market.

While these were very rudimentary surveys, and much more in-depth surveys are needed if the numbers are to be considered with confidence, the data that exists tells a compelling story.

The market elasticity data from these surveys are plotted as the ticket price required if a given number of passengers are to annually to go into space. If we ignore the high and low extremes of the data, these surveys show that about 1,000 people annually would go to space even if the price per ticket were $ 0.5-1.0 million; that about 100,000 people annually would go if the price dropped to $100,000; and that eventually over 1 million people would go into space annually if the ticket price dropped to $10,000-20,000.

In fact, the data indicate that passenger traffic could go as high as 10,000,000 people annually if ticket prices drop to about $5,000. Since ticket prices of $50,000-100,000 are common in today's so-called "adventure travel" businesses which take people to exotic destinations on Earth, such space travel ticket prices would reasonably be expected to support at least the 100,000 people annually to space that the mean of the surveys appear to indicate.

This data was replotted to obtain annual revenues to be expected by the entire market, shown in Figure 2. It is seen that the size of the market is truly enormous, up to well over $ 30 Billion annually. In addition it is seen that the revenues are expected increase monotonically with an increase in the number of passengers, and only one estimate (which was based only on an interpretation of other surveys) indicates a flat or negative slope. Therefore there is no optimum size of the business--the larger the better.

The most likely range of obtainable revenues if the high and low estimates are thrown out is shown in Figure 3. It shows that the revenues obtainable are very large by any measure, and exceed $ 1B with 10,000 passengers annually.

New launch vehicles will be needed for PST. This study used vehicles modelled after the Lockheed Martin single-stage-to-orbit ( SSTO) RLV, with 3 vehicles being sized carrying 20, 60, and 180 passengers each aiming at 10,000 to 10,000,000 passengers annually. This was done because there is a notorious economy of scale in such SSTO reusable vehicles. The Japanese Kankoh-Maru was used as a reasonable example of typical passenger accommodations and design layout, shown in Figure 4 (Courtesy Japanese Rocket Society). In addition a smaller scale vehicle using a Kistler-type 2 stage RLV approach was designed in order to begin services incrementally with much lower investment, at passenger rates of 100-2,000 per year.

The R+D cost estimates for these vehicles are shown in Figure 5, and exhibit the expected strong economy of scale. The R+D cost estimates were based on a second generation of commercial SSTO RLVs, which themselves were reduced from the commercial vehicle cost estimates provided by Trans Cost Systems as an input to this study. Thus while vehicle R+D costs exceeding $ 10 B would be needed if done as a government program, costs of $ 3-4.6 B were estimated using this commercial approach. In contrast the Kistler-type passenger vehicle is estimated to cost $ 1.6 B, also carrying 20 passengers but available much sooner.

Number of passengers	20	60	180
Payload to LEO	17.6 klb.	35.2 klb.	70.4 klb.
Government SSTO vehicles (TCS model)	$12.4 B	$14.2 B	$18.1 B
Commercial SSTO vehicles (TCS estimate)	$5.0 B	$5.8 B	$7.3 B
Second SSTO-type vehicles (Bekey estimate)	$3.0 B	$4.0 B	$4.6 B
Manned Kistler-type TSTO RLV (Bekey estimate)	$1.6 B	--	--
Kistler unmanned TSTO RLV	$0.6 B	--	--

A number of further assumptions were made in defining the vehicles' operations costs. These included economies of operating at very large flight rates due to the very large passenger rates. These are shown in Figure 6. It is seen that at 1,000,000 passengers annually the total investment is $ 7.6 B and the costs per flight are under $ 1 M.

	2 STAGE RLV	SINGLE-STAGE RLV
	20 passengers	20 passengers	60 passengers	180 passengers
Max. no. passengers per year	2,000	120,000	360,000	1,000,000
No. Launch sites	2	18	18	18
Max. no. launches / site / year	50	355	355	355
No. flights before replace	250 veh. 50 eng.	500 veh. 100 eng.	500 veh. 100 eng.	500 veh. 100 eng.
R + D costs	$1.5 B	$3.0 B	$3.9 B	$4.6 B
Infrastructure costs	$0.4 B	$2.0 B	$2.2 B	$3.0 B
Total costs	$1.9 B	$5.0 B	$6.1 B	$7.6 B
Min. operating costs / flight	$1.38 M	$1.25 M	$0.97 M	$3.3 M

In addition, this large scale operation requires 18 launch sites world wide, with a launch rate approaching one per day per site. This is not unlike airline operations. These numbers were generated using a modification of the Trans Cost Systems model results, and based on vehicles that are capable of 500 flights before being replaced, with the engines capable of 100 fights. On the other end of the scale for the Kistler-type vehicle the total investment is $1.9 B, and the cost per flight over $ 3 M.

A cash flow analysis was performed on these businesses to determine their attainable Internal Rate of Return, and thus their potential as viable ventures. In order to do that a traffic build up rate had to be assumed, and is shown in Figure 7 for a 10 year phase-in period, which sets the revenue stream.

The resulting seat prices are shown in Figure 8 for a business to generate 25% and 35% IRRs in a 20 year total period. In this figure these prices are superimposed on the market elasticity curves previously illustrated, so that their reality can be assessed. It is seen that the seat prices that must be charged are at or below the average of those that the market data indicate are sustainable up, to some annual passenger rate. If the requirement is only to make a 25% IRR, then this rate is about 10,000 passengers for a 20 passenger vehicle, 100,000 passengers for a 60 passenger vehicle, and about 1,000,000 passengers when using a 180 passenger vehicle. For a 35% IRR, which is much more in keeping with the demands for a new industry investment, the passenger rates sustainable are one order of magnitude lower. This data clearly indicates that there is a large economy of scale in PST vehicle designs. More importantly, it indicates that an economically viable business venture can be started and sustained.

A further analysis was done to see if the attain-able passenger annual rates, and therefore the total profits, could be extended upwards by underwriting a fraction of the ticket prices by carrying cargo and advertising. The result is shown in Figure 9, also superimposed on the allowable ticket prices.

It is seen that the ticket prices can indeed be reduced by this strategy, particularly at the higher passenger rates. It is seen that 35% IRR is probably achievable to 1,000,000 passengers annually, and 45% IRR to 100,000 passengers annually. Thus this strategy allows higher IRR, higher passenger rates, or both, as would be expected. In fact, this strategy also results in a 55% IRR being achievable to 3,000 passengers annually, a very attractive entry level business.

It should be pointed out that while the effect of carrying cargo greatly reduced the ticket prices that have to be charged for profitability, the prices that have to be charged for launching that cargo can be very low and attractive indeed. The analysis showed that prices as low as 30 $/Kg could be offered if the cargo annual mass to orbit were 10,000,000 Kg per year. This cargo rate is of the order of magnitude expected if the Solar Power Satellite becomes a reality.

In fact the PST and SPS programs would then be synergistic, because a way would have been found to launch the SPS at a price almost three orders of magnitude smaller than today, and an order of magnitude lower than the lowest prices assumed even in the NASA Fresh Look SPS study. If, on the other hand, SPS does not materialize, very competitive cargo prices of as little as 3,000 $/Kg could be charged for launching 100,000 Kg of cargo annually. This is less that 30% of the world's current launch rate, and could be readily captured by such a launch fleet.

There is another way that a lower cost entry business may be started, and that is to use a less expensive, smaller scale Kistler-type vehicle with a 20 passenger cabin added. This is a very important aspect of the analysis, because even though the larger 20 person SSTO vehicle could generate a very viable IRR at low passenger rates, the investment required is very large and therefore more difficult to raise. Furthermore, in all probability a successful business could not operate with only the tens-to-hundreds of people likely in the initial passenger manifests.

The Kistler-type vehicle only requires about half the total investment of the larger SSTO RLV type vehicle. Thus an introductory service was defined starting at 150 passengers per year with a launch every 2 months from a single site, and building to a maximum of 2000 passengers per year with 2 launch sites and 1 weekly launch each. Only 2-3 vehicles would have to be procured. In addition more conservative operations costs were used to account for less mature operations and a smaller learning curve, resulting in a cost/flight three times greater than that estimated for the SSTO vehicle.

The results of this part of the analysis is shown in Figure 10, also with some cargo and advertising revenue to offset initial ticket prices. It is seen that a very viable business can be had even at 150 passengers per year. In fact, when compared to the price that the journalist who flew to MIR was thought to have paid, it is right on the straight line connecting them.

Furthermore it is widely believed that the MIR ticket costs were also heavily subsidized, and thus the seat prices for the contemplated initial service appear very reasonable in view of the likely market tolerance.

To complete the picture, both the full size SSTO RLV and the smaller scale Kistler-type vehicle business are plotted on a single chart, shown in Figure 11. It is seen that viable IRRs are attain-able by businesses spanning the entire range of passenger rates from 100 to at least 1,000,000 passengers annually. This means that annual profits up to $ 30 billion dollars are attainable.

This study has shown that very viable, if not lucrative, Public Space Travel business ventures can started and sustained which are capable of generating an IRR up to 55%. The mature profits of these businesses can be over $ 30 billion annually for a total investment of less than $ 7.6 B, an investment not unlike current large communications constellation investments, and is absolutely sure to attract investors.

The ticket prices that can be offered to passengers and still make those huge profits are entirely consistent with market elasticity indicated by the market surveys done to date. In fact, they lie in the middle of the range of estimates even if the high and low estimates are discarded.

It is clear that there is a large economy of scale evident in the launch vehicles , and vehicles sized for 180 passenger accommodations will generate considerably higher profits than those for 20 or even 60 passengers, because they will allow much greater total annual passenger rates with disproportionately lower investments. The potential IRR is shown in Figure 12 as a function of the vehicle size.

These vehicles do not need any new technology beyond what is being demonstrated in the X-33 vehicle, but they have to be designed for high automation and reusability.

The vehicles must be reusable 500 times and the engines 100 times, or the economics degrade. And they must attain an eventual reliability of at least 0.99999, approaching that of current air-liner fleets. However, service could well start at the RLV level of reliability, which is predicted to be 0.999 which is an order of magnitude safer than the Space Shuttle. By the way, this is much safer that the actual reliability of airliners when that industry was just beginning, and the occasional crashes did not inhibit its start and growth. In fact, these crashes served mostly to pressure manufacturers and operators to make the airliners safer, not to ground them.

The investment required to generate pretax profits of $ 33 B annually is $ 7.6 B. A smaller scale program requiring less that $2 B investment has been identified, which could begin service sooner and with proven technology. It would also be capable of generating IRRs in the 35% range, and its annual profits could still be about $1 B. This would be ideal for an "introductory service" to transition from the currently planned suborbital flights to mature services taking 100,000 people into space annually. Its smaller required initial investment increases the chances of finding investors.

Lastly, it seems self evident that in order for the larger passenger rates considered to develop, there must be luxury hotels available in space as destinations for these tourists. A number of such orbital facility concepts have been advanced, and could well become the "Orbital Hilton" or "Orbital Jolly" facilities envisioned. These would have to be designed with accommodations and activities closer to those of cruise ships that of the Space Shuttle, and be designed to provide artificial gravity, for the large passenger rates to materialize. But there is every reason to believe that such orbital hotels are not only possible but certain to happen, given the truly enormous profits that such businesses represent.

The profit motive will virtually guarantee it.