Any experienced business-person who was asked what they would expect of an industry controlled for decades by government monopolies, would be sure to predict stagnation. And if we look at the most basic statistics of the space industry, the result is unfortunately clear. Although it is well known that launch costs are very high, it is not so well-known that they are substantially higher today than they were 30 years ago. Dr Koelle has prepared statistical evidence that shows this clearly (1).

It is commonly believed that government space agencies are "opening space for humanity". But in fact they are not. Despite using such language in their publications, not even 1% of their budgets has been spent on the objective of cutting the cost of access to space sharply! Government space agencies in USA and Europe spend $20 billion/year on a range of activities modelled on those of the Soviet Union - where of course the concept of doing what the consumer wants dod not exist.

But existing launch vehicles are a dead end; they cost $100 million or more per launch; and they can never "open the space frontier". Low-cost, reusable launch vehicles that go to and from space as regularly as aircraft must be developed and put into operation in order to do this.

However, with the end of the Cold War this situation has finally begun to change. With no more need for "prestige" in competion with the Soviet Union, US and European taxpayers are questioning the need for government space agencies, and are cutting their budgets sharply. Daniel Goldin, a businessman appointed to lead NASA, has described the situation frankly: "Everyone at NASA and in the American space industry ought to hang their heads in shame" - because they have not developed a new rocket engine for 25 years (2).

As a result, Dr Goldin has committed NASA to reducing the cost of launch by 90%, and through the next 4 years NASA will spend 2% of its budget on reusable launch vehicle projects. This is opposed within NASA by those spending the 98% of the budget that is not aimed at reducing the cost of access to space. But Dr Goldin has said that reusable rocket research "...will be the last light to go out at NASA". Nevertheless, there is no intention that NASA will actually develop a reusable launch vehicle - that is being left to industry, and they foresee no great demand for launch services other than from NASA.

ESA is in an even worse state. Instead of trying to develop vehicles that would be cheaper to operate, ESA has a policy of "no other vehicle except Ariane until 2020", and tries to prevent European satellite companies from buying cheaper launches from other companies. ESA spends barely 0.1% of its budget studying reusable vehicles, because it foresees no demand for them for at least 25 years. This is "Euro-sclerosis", the economic disease that limits market pressures for innovation, and has maintained 10% unemployment in Europe for a decade. Although expendable launch vehicles are far too expensive to be able to open the new frontier of space, they have been protected from the whirlwind of business competition, with the predictable result that they have continued to be used for decades too long.

However, in ESA too things are finally beginning to change. The budget is being cut; restructuring is being demanded by European governments; and recently Roy Gibson, a previous head of ESA, stated that "...innovation and new-style joint ventures are more likely to spring from entrepreneurial companies than from a government agency. So far we have not been all that active, and it's getting late" (3).

The situation described above is tragic, and also farcical, because there is an enormous market for space activities which will grow explosively once launch costs are reduced. Interestingly, it is the latecomer to the space industry, Japan, which has started to do the necessary market research, and it has discovered that one of the largest businesses on Earth is likely to become one of the largest businesses in space - tourism. "Space tourism", first in low Earth orbit, later in higher orbits, and then to the Moon and beyond, appears to be going to become a key business that will generate the commerecial funding to open the space frontier.

Started in 1993, market research has now been performed in Japan, Canada, Germany and the USA, and the resulting statistics show that there is an enormous unsatisfied desire among the general public to travel to space for themselves. Some 80% of young people up to the age of 40 would like to, and even some 30% of people in their 60s and 70s say they would like to (4, 5).

For many people a "once in a lifetime" visit to orbit is a very strong aspiration. For many people it seems almost a spiritual urge to look at the Earth, their own planet, from space. For many younger people it is more of an urge for adventure; to do something exciting that their parents have not done; and many wish to visit space repeatedly. But much interesting market research remains to be done to understand more accurately what services will become most popular.

When asked how much they would be prepared to pay for a short visit to space, a majority of those in favour say that they would pay 3 months' salary; about 1/4 say that they would pay 6 months' salary, and some 10% say that they would pay 1 year's salary or more.

Repeated 7 times to date in comparable form in 4 different countries, market research statistics repeatedly show the same pattern, which now seems undeniable. Of course market research data, particularly concerning a new service in the future need to be adjusted to allow for the fact that consumers' future behaviour may be more cautious than their response to surveys. However, even after doing this it is clear that the market will be very large.

Furthermore, when economic growth is projected over coming decades, and the population statistics of the middle classes around the world are considered, and if we include the fact that most potential customers say they want to visit space more than once - and if we consider also how imaginatively advertising companies will market space travel - it is hard to doubt that tourist travel to and from space will grow to tens of $billions per year. Abitzsch at the University of Berlin estimates that at a service price of $50,000 demand could grow to more than $60 billion/year - far more than the satellite launch market market (6).

Some people claim to be surprised by, or refuse to believe these results. But are they really surprising? Everyone who has visited space says that it is among the most interesting experiences of their life. The view of Earth from low or high orbit is known to be both beautiful and endlessly fascinating, with continually changing views of all the places on Earth - jungles, mountains, deserts, ice-floes, whirling storm-clouds. The night-time view of Earth is also breath-taking - with city-lights, thunderstorms, aurora and occasional volcanoes and forest fires.

Looking out towards space, the stars also look different than when seen from Earth - they are brighter, more colourful and do not twinkle - much more difficult to forget than for when living in a city, where it is easy to forget that Earth is floating in the midst of infinite space. The ultimate thrill is said to be being outside your spacecraft in a space-suit as it goes from sunlight into the Earth's shadow and the Milky-Way galaxy is spread out overhead.

In addition to the views, living in weightlessness is endlessly fascinating: every activity of daily life becomes transformed into a new experience. The Japanese astronauts Dr Mukai and Dr Mohri recently clarified some important points about this. It is popularly believed that travelling to space is stressful and will be spoiled by "space sickness". But Dr Mukai has explained that travelling to and from space is not at all stressful and anyone could go (7), and Dr Mohri has explained that "space sickness" is just a form of motion-sickness which is prevented by normal "travel-sickness" medicines (7). Consequently guests in orbital hotels will be able to fully enjoy daily life in "zero-gravity".

Another reason for anticipating the popularity of space tourism is the phenomenal popularity over several decades of space fiction stories both on television and in films. Live-action US television shows such as "Lost in Space" and "Star Trek"; animated Japanese television series such as "Space Battleship Yamato" and "Mobile Suit Gundam", and British television puppet-shows such as "Thunderbirds" have all achieved record ratings and have maintained their popularity for a decade or more. Many space-fiction films have also been major box-office successes. So perhaps the wide potential market for space tourism services is not so very "surprising"?

From a business point of view it is more surprising that NASA and ESA have never considered the possibility of space tourism. They have done no such market research. And they have no plans to move in this direction. Yet it would be unthinkable for business organizations with budgets of $ billions per year not to do market research to learn what the public wants. But due to their history, government space agencies find it unthinkable that the general public might have a significant role to play in space.

In the post-Cold War world it seems unlikely that these agencies will be able to continue to disregard taxpayers' wishes so totally - and nor should they. It is more likely that their budgets will continue to be cut until the general public themselves are available to visit space. In this context it was notable that Mr Goldin made a speech at the launch of the "X" Prize which included the hope that his grandson will be able to go on a trip to a lunar hotel.

The key to the realization of space tourism is low-cost reusable transportation to orbit, for which there are two main design approaches, VTOL and HTOL. The competition between the supporters of these two approaches is notorious. Ensuring adequate funding for both aproaches should be a priority for government spending in order to benefit from this competition.

Vertical take-off and landing ( VTOL) vehicles for passenger transportation to and from Earth orbit have been supported by a series of champions: Bono in the 1960s, Koelle in the 1970s, Hudson in the 1980s, and McDonnell Douglas, Kawasaki Heavy Industries, HMX and others in the 1990s, who have produced a series of well-known vehicle designs.

From 1991 through 1996 the McDonnell Douglas DC-X project was very successful in demonstrating a range of ideas that had hitherto been dismissed as unachievable. Low cost, rapid proto-typing, reusability, simple "airline" operations, quick turn-around, and others.

Since 1993 also the Japanese Rocket Society has been leading its Space Tourism Study Program. A major output of this has been the outline design of the " Kankoh-maru" passenger launch vehicle designed to carry 50 passengers to and from low Earth orbit shown in Figure 5 (8). This Japanese work is still not widely known, but major papers have been republished in the USA (9).

While there may be a market of some hundreds of customers per year at a price of $1 million/person, the focus of this JRS work is firmly on the mass consumer market: demand is expected to grow to more than 1 million passengers/year if the cost can be reduced to around $20,000 per person. Such a launch cost is estimated to be achievable on the basis of a scenario in which 8 " Kankoh-maru" vehicles are produced per year, leading to a service growing by 100,000 passengers per year.

As a result of research to date it is widely recognized that single-stage to orbit ( SSTO) horizontal take-off and landing ( HTOL) launch vehicles are not feasible using known technology. SSTO concepts such as NASP are design studies only. Consequently the horizontal take-off vehicles which are candidates for passenger-carrying are the two-stage HTOL vehicles advocated by Saenger in the 1950s, Dassault in the 1960s, and MBB in Germany and Ashford in Britain in the 1980s and 1990s. Other "one-and-a-half" stage vehicles such as the air-refuelled "Black Horse" could also be candidates. Among these, vehicles which could be developed using existing engines are probably the most economically promising.

From a business point of view it therefore seems desirable that research and development should continue vigorously on both SSTO VTOL and 2STO HTOL. Automobile and aircraft design evolved to reach its current level through decades of vigorous competition between countless different designs - which continues today. Continuing competition between different approaches to orbital transport offers much the best chance of reducing launch costs sharply.

Another important result of the market research described above is that most potential customers say that they would like to stay in orbit for several days, a week or even longer (4, 5). This creates a range of new business opportunities for the related but separate industry of orbital accommodation, or more broadly for the "hospitality industry".

As the number of passengers travelling to orbit grows, the scale of orbital accommodation required will grow. For example, a few hundred thousand passengers per year staying in orbit for even 2 or 3 days on average will create a simultaneous orbital population of several thousand guests - and an additional population of 1000 or more hotel staff.

To date no reliable estimates have been published of the relative costs of flight to orbit and staying in orbital accommodation, and so the relative scale to which the two businesses may grow is still uncertain. While the cost of a 24-hour stay in orbit is estimated to fall substantially below that of a return flight, as the service develops guests can be expected to stay progressively longer in orbit, and so the revenues earned by accommodation providers may grow to exceed those of transportation providers.

It is interesting to compare the technology needed for orbital accommodation with that needed for a scientific space station. In many ways much simpler; there is no need, for example for much of the advanced technology used in space research such as fast computers, high data-rate communications, accurate pointing ability, high power generators, ultra-precise sensors, low-vibration centrifuges and so on. By contrast, the basic technology needed for accommodation in orbit has been available since the US space station "Skylab" was in operation in 1973.

However there will be new requirements for orbital craft to be used for accommodation for fare-paying guests, since they will require a higher level of comfort and safety than that in the government research facilities that have been built in orbit to date. These new requirements include spacious bedrooms with windows, bathrooms, comfortable communal facilities such as dining-rooms, lounges, bars, rooms with large windows for looking outside, various entertainment facilities and zero-gravity play-rooms. In the design of all of these facilities, adequate attention will need to be given to interior design, and much will be learned from the terrestrial hotel industry.

There will also be a need for new construction standards to ensure safety of an acceptable level, as the construction of commercial buildings on Earth must comply with both professional codes of practice, and with national and local government regulations. In conjunction with these there will be a requirement for safety procedures to be developed. In these respects developing orbital accommodation will be similar to real estate projects on Earth. These issues have begun to be addressed by Lauer and colleagues in the USA (11) and is an interesting new field for study.

Although they are related, air transportation and accommodation are different industries. Likewise space transportation and accommodation will be basically different industries. In supplying the demand for space tourism, each will create business opportunities for a range of other companies. Launch vehicle manufacturers, rocket engine and component makers, propellant producers and materials companies will all participate in the cash-flow of the vehicle operating companies. Architecture, construction, component production, interior design, food and drink and entertainment companies will all participate in the cash-flows of the operators of hotels in Earth orbit.

Both these two main activities will also create new business for companies providing investment, insurance, leasing, banking, marketing, media and law services. And if we consider a revenue stream growing to trillions of Yen/year (tens of $ billions), it is clear that this new customer-driven industry will infuse new life into the aerospace industry which is still painfully shrinking. In doing so it will have a profoundly beneficial effect on the economies of those countries which participate.

The fall of the Soviet Union was fundamentally a result of the much greater creativity and productivity of free enterprise than of government-controlled activities. When the same commercial forces are applied effectively to space activities, the effects will be revolutionary. So perhaps the most important fact about space tourism is that it will be a normal commercial industry. In contrast to the situation today, in which government-funded agencies and the companies to which they pass contracts are involved in a permanent effort to persuade taxpayers' to increase or even just to maintain their funding, space activities will become a race to the fastest. One of the most important lessons of business, though not a law of nature, is that being the first company to successfully provide a new service to the general public gives great advantage in dominating a new industry. Names such as Edison, IBM, Coca-Cola, Thomas Cook, are all testimony to this (12).

Finally, there are a number of additional activities, notably revision of space law, removal of space debris, development of codes of practice for both passenger launch services and orbital accommodation, which will require a contribution from governments on an international basis (13). The sooner that this work begins, the sooner that consumers will be able to buy this new service, and the sooner that the advanced countries and the world economy will benefit from this lively new direction for economic growth.

This paper has attempted to outline the scale of the business opportunity that exists in providing tourism services in Earth orbit. Once low-cost reusable launch vehicles become available for routine operation tourism appears capable of generating revenues on a scale many times larger than the commercial space industry today. In doing so it will create a dynamic and popular new field for application of aerospace technology. To date, no other application has been proposed for space technology that can match this prospect, and consequently passenger carrying should be a major target of new vehicle designs.

This paper has not discussed how the development of this exciting and popular new industry should be financed. Nor has it discussed the very significant social and global benefits that can be expected. A contributing reason for the recent slow economic growth in the rich countries is that the cumulative investment of $1 trillion that has been made by governments in space technology development has yet to earn a commercial return. When put to profitable use in the way outlined in this paper it will create a lively new field for business investment and growth. But until this happens, the slow growth may be expected to continue.

1. D Koelle, 1991, " TRANSCOST Statistical-Analytical Model for Cost Estimation and Economic Optimization of Space Transportation Systems", MBB-Report No URV-185(91).
2. D Goldin, 1996, " Slash Costs to Open the Space Frontier", Aviation Week and Space Technology, Vol 144, No 9, p 74.
3. R Gibson, 1996, " Private Sector Drives Development", Space News, Vol 7, No 21, pp 19, 22.
4. P Collins et al, 1994, "Commercial Implications of Market Research on Space Tourism", Journal of Space Technology and Science, Vol 10, No 2, pp 3-11.
5. P Collins et al, 1995, "Demand for Space Tourism in America and Japan, and its Implications for Future Space Activities", Proceedings of 6th ISCOPS, AAS Vol 91, pp 601-610.
6. Abitzsch, 1996, "Prospects of Space Tourism", Presented at 9th European Aerospace Convention, Berlin, May 15.
7. H Osawa, 1996, " The History of Japanese Rockets: from Fire Arrows to Space Travel", Mita Press, p 228-31 (in Japanese).
8. K Isozaki et al, 1996, "Vehicle design for space tourism", reprinted in Space Energy and Transportation, Vol 1, No 1, pp
9. R Akiba and M Nagatomo (eds), 1996, Space Energy and Transportation, Vol 1, No 1, pp 9-65.
10. M Nagatomo et al, 1995, "Study on Airport Services for Space Tourism", AAS Vol 91, pp 563-582.
11. C Lauer, 1996, " Analysis of Alternative Governance Models for Space Business Parks", Proceedings of SPACE 96, ASCE, Vol 1, pp 177-185.
12. A Ries and J Trout, 1994, " The 22 Immutable Laws of Marketing", HarperCollins Publishers.
13. P Collins, 1996, "The Regulatory Reform Agenda for the Era of Passenger Space Transportation", Proceedings of 20th ISTS, Paper no. 96-f-13