Space tourism – an opportunity that continues to evolve and grow… Space tourism remains a small subsector of the larger space economy opportunity, estimated at cUS$900bn plus by 2030. Indeed, we see it as likely accounting for c5% of this opportunity by 2030E, or worth US$4bn. Nevertheless, the $4bn opportunity is larger than initial expectations in our 2019 report of US$3bn, driven by an influx of capital, more ambitious plans than our baseline, and technical progress since then. In fact, during the second half of this year, we will and have seen a number of high-profile space tourism trips with each of the largest private space participants undertaking at least one trip into space. That said, given the early phase of the opportunity, hotels, airlines and tour operators have yet to announce plans for space tourism and long-haul travel via space.

Space enthusiasm and investment grows despite some setbacks/delays Since our 2019 report, we have seen some of the companies postpone or cease operations, and while we think the path of space tourism will continue to be upwards, setbacks are also expected. We have seen space companies list, plan or announce potential listings, and think opportunities to invest in the broader space economy will continue to grow helping to get the Space Economy to nearly double over the next 10 years as it has over the last 10 years.

Long-haul travel by space still affords potential, but Covid-19 is likely a setback COVID-19 greatly affected commercial aviation in 2020 with its impact likely persisting for many years, both in terms of leisure travel recovery and especially corporate travel. We think the use of alternative technology likely means a slice of corporate travel is structurally lower before growing off the new base back above pre-COVID-19 levels in the second half of the decade. Furthermore, the growth in business jet usage and even the potential for supersonic/hypersonic flight might further delay some of the long-haul via space potential. In-flight connectivity could further erode some of the benefits offered by a long-haul product via space offering, as time on a commercial flight can still be productive. Lastly, respondents to the UBS Evidence Lab survey on travel from April 2021 are potentially less likely to use space for long- haul travel than the 2018 survey responders, albeit the question was not phrased in the same way. Given the headwinds, we think the long-haul market via space is smaller at cUS$15bn p.a. (if a 3.5% penetration rate is achieved versus the previous expectation of 5%) versus our previous forecast of US$20bn.

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