Space tourism: Ready for blast-off?

Key takeaways

  • Reusable rockets, innovative launch methods and other improvements are quickly bringing down the costs of sending satellites, supplies and even people into space.
  • Government and private sector funding of space technology is increasing as demand for satellites, rockets and other space technologies is also on the rise.
  • The UBS Chief Investment Office (CIO) forecasts the space sector nearly tripling in size to $926 billion by 2040, creating a potential opportunity for investors.
  • Learn more in CIO's report Longer Term Investments—Space (PDF, 738 KB)

Do you dream of blasting off from Earth to orbit the planet, or wonder what it would be like to take a trip to the moon? While this was a pipe dream in the past, you may be able to hitch a ride to space sooner than you think.

Escaping Earth's atmosphere is getting cheaper as more options enter the scene. Back in 2001, Dennis Tito became the first self-funded space tourist when he paid $20 million to spend eight days in orbit on the International Space Station. Today, the prepaid cost of a ticket to sub-orbital space with Virgin Galactic is $250,000. If you have the means, getting to space may be a real possibility.

Taking flight as a space tourist

At the start of each episode of Star Trek, the captain excites the audience with talk of "going where no man has gone before." With modern advances in rockets, aviation and the business landscape, escaping the planet's atmosphere may not just be fodder for television.

Companies like SpaceX, Blue Origin and Virgin Galactic are taking reservations for upcoming space flights, even though none of those flights have yet taken off. In late February 2019, Virgin Galactic's rocket plane reached space for a second time in a test flight over California (see video above). Space X recently made headlines for selling a trip around the moon. Next on the horizon for space tourism: Short sub-orbital flights, guided space tours and, one day, even luxury vacations at space hotels in the planet's orbit.

Modern rockets: More reliable, less costly

In the UBS Chief Investment Office report Longer Term Investments—Space (PDF, 738 KB), our strategists forecast that the entire space sector will grow from $340 billion to $926 billion by the year 2040—creating a potential opportunity for investors interested in gaining long-term exposure to this sector in their portfolio.

What's driving the growth in the space economy?

A big factor is declining costs. Reusable rockets, innovative launch methods and other improvements are quickly bringing down hardware and labor costs, making it much more reasonable to send satellites, supplies and even people into space. In addition to technology, the space supply chain has gone through a consolidation, driving down manufacturing and other input costs.

Space: the final investment frontier?

Increased funding is also pushing the space economy to new heights. Private sector investment has surged, and government funding is expected to increase significantly over the next decade. Demand for satellites, rockets and other space technologies is also on the rise, further driving the sector's growth. CIO sees four key demand drivers:

  • Satellite internet service: According to Nielsen Online, the global internet penetration rate is just 52%. Satellite internet could increase that percentage dramatically.
  • Bandwidth applications: Autonomous cars, big data analytics, and the Internet of Things are rapidly increasing the demand for bandwidth. High throughput satellites (HTS) and clusters of small satellites can expand orbit bandwidth significantly.
  • Asteroid mining: Asteroids contain large quantities of water and other resources that are becoming scarcer on earth (PDF, 197 KB), potentially resolving imminent shortages.
  • Commercial interests, including the wide range of recreational uses detailed here.

Space isn't just for science fiction fans anymore

Internet services, asteroid mining and other innovations to tap opportunities in space are beginning to come into focus. And if space travel becomes a regular part of doing business, space tourism won't be far behind. If you line things up right, you could find yourself ready for takeoff from a "spaceport" near you.

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