© The Financial Times Ltd 2016
FT and 'Financial Times' are trademarks of The Financial Times Ltd.
The Financial Times and its journalism are subject to a self-regulation regime under the FT Editorial Code of Practice.
February 28, 2014 1:07 pm
Here we are more than a decade into the 21st century and we’re still not there. To be a child of the 1960s and 1970s was to daydream not only about travelling in space but also about settling there, indefinitely. National space agencies planned inflatable lunar cities. Space was where we were all going to live and work – Moon bases and hotels, everything in Stanley Kubrick’s futuristic 2001: A Space Odyssey. This was the era of the space race and of humanity’s first orbiting residences.
To young people today this is old news: they know that the Americans went to the Moon, just as they know the Romans built straight roads. Manned space flight lost its glamour; Nasa lost its way, its ambition severely weakened by funding cuts; and we gave up on the idea that living in space was the next step in humankind’s evolution. As Buzz Aldrin, the second man on the Moon, tells me: “After the Apollo lunar missions, America lost its love of space – there was no concentrated follow-up and we didn’t have any clear objectives.”
Still, not all hope is lost for wide-eyed space cadets. Today the idea, if not quite the practice, of living in space is coming back into fashion. If the 20th century space race was about the might of the US government, the space race today is about something that could be even more powerful – private wealth.
“Investment in commercial space flight has become one of the big trends among the super-rich,” says Liam Bailey, head of global research at Knight Frank. The property agency has identified more than 70 ultra high net worth individuals (UHNWIs – people with at least $30m in net assets) investing in commercial space travel, 13 of whom are billionaires with a combined wealth of $175bn.
Over the past few years the necessary technology has come into the hands of an unlikely group of young tech billionaires and private contractors. And it is their start-ups that have the boldest ambitions.
There are about 10 private companies engaged in space transport at present, including SpaceX, created by billionaire PayPal co-founder Elon Musk, and Blue Origin, founded by Amazon’s chief executive Jeff Bezos. Space tourism, driven by companies such as Sir Richard Branson’s Virgin Galactic and Jeff Greason’s XCOR Aerospace, aim to give the super wealthy a taste of what it is like to be an astronaut by sending them into suborbital space.
Aboard Virgin Galactic’s SpaceShipTwo, passengers will see the view that eluded mankind until 50 years ago, and one that only about 500 people have seen in reality: the curvature of the Earth set against the blackness of space. The two-hour journey will blast six passengers and two pilots nearly 70 miles into the sky, experiencing about five minutes of weightlessness before turning back and landing at Spaceport America in New Mexico, frequently described as the world’s first purpose-built commercial spaceport.
The privilege does not come cheap; tickets cost $250,000 each. To date, Virgin Galactic has amassed about $80m in deposits. In customary happy-go-lucky style, Branson says he and his children will be on board the maiden flight later this year (although he initially predicted that his first passengers would take off in 2007; since then, as Tom Bower outlines in his new book, entitled Branson: Behind the Mask , the project has been beset by explosions, deaths and delays).
About 700 people from 57 countries have signed up (and paid) for a seat on SpaceShipTwo, including Leonardo DiCaprio, Stephen Hawking, Justin Bieber and the Candy brothers. Lady Gaga has also reserved a ticket and, if everything goes according to plan, will next year become the first singer to perform in outer space.
Beyond the hype and behind the increased investment in space tourism is another story, with some interesting ramifications closer to home. Although many companies developing commercial space travel are aiming for the moon and beyond, they may end up settling for a lucrative business here on Earth.
Virgin Galactic flights might, for example, in future open up suborbital intercontinental travel – or “point-to-point transportation” – ferrying the super-rich around the globe via the space environment, achieving significant improvements to today’s travel time between distant hubs.
Suborbital travel could cut the journey time from London to Sydney to just a couple of hours, ditto from San Francisco to Singapore. Dubai to Vancouver would take about 90 minutes; Moscow to New York, just an hour.
Despite a scratchy few years, Branson has a spring in his step: “I’m very excited about a future version of our current spaceship, which will make transcontinental travel a clean and fast pursuit.” (However, many groups have questioned the environmental impact of commercial space travel.)
Knight Frank’s Wealth Report 2014, provided exclusively to the Financial Times, considers the “dramatic” impact suborbital travel could have on global property markets. “This kind of technology shrinks the globe in significant ways,” says Bailey, author of the report, “but there are big challenges to overcome.”
According to the annual report, which gathers the views of 15,000 UHNWIs, “London wins over New York as a global wealth hub. One of the contributory factors is that London is more convenient for African, Middle Eastern, Russian and European UHNWIs. Within a decade, however, this convenience premium could be noticeably weakened if Branson’s vision turns to reality.”
Bailey points to the markets for second homes in Europe. “At the moment, second-home buyers throughout Europe tend to be European. It’s a case of northern Europeans buying nice places in southern Europe with a bit of sunshine. But these locations will become much more global in terms of their demand base,” he says. “The heritage of these locations is hard to replicate, so we’ll see more buyers from China, India and a wave of other places where wealth is being created.”
“An interesting issue is how suborbital travel will effect the concentration of wealth,” he continues. “It will reinforce concentrations of economic activity. Ultimately, the big global cities will be the main beneficiaries – London, New York and San Francisco would suddenly become much easier to access for double or treble the number of people. Sydney, especially, would benefit as it already has huge traction from Asia but is inconvenient for the rest of the world to get to.”
Yolande Barnes, director of residential research at Savills, says: “If – and it’s a big if – suborbital travel takes off, it would encourage a lot more multiple home ownership around the globe. When China and some other parts of Asia really discover how to develop good holiday resorts, there’s huge potential for more Europeans to think about second home ownership there. It could quite easily become a much more global market.”
It may be hard for many to imagine a world of suborbital space travel, involving as it does a wholesale reworking of transportation networks and how we move around the planet. But the aeroplane once reshaped the world in revolutionary ways, and nothing lasts forever.
Making life multi-planetary
If you listen to many space futurists, the last great pioneering land rush is yet to come, with billions of dollars to be made in not only suborbital travel but also outposts on the Moon and beyond. Indeed, a group of so-called “astropreneurs” are already thinking beyond tourism. As Elon Musk, the 42-year-old founder of SpaceX, tells me: “We don’t compete with companies like Virgin Galactic. They’re in the little league; our rockets are 100 times bigger.”
When Musk was at school, he believed three things would affect the future of humanity: the internet, sustainable energy, and multi-planetary life. In 1998 he founded PayPal, which went on to change the way people exchange money online. He sold PayPal to eBay for $1.5bn in 2002 and, the following year, launched the electric sports car maker, Tesla Motors, now worth about $4bn.
But SpaceX, founded in 2002, is his most ambitious project. Working out of a shiny white, 1m sq ft factory in California, SpaceX has already made history: in 2012 it became the first private company to dock a spacecraft at the International Space Station.
Still, its ultimate goal is to establish a permanent settlement on Mars. By using rockets that can return to Earth intact, rather than burn up in the atmosphere, the price of a space mission would be cut dramatically. Offering cheap, reliable delivery services to Nasa and commercial clients is, for Musk, a means to perfect the technology that could one day get humans to Mars.
“Hopefully we’ll be able to send the first person there by 2025,” he says. “Developing reusable rockets are the fundamental breakthrough needed in rocketry, without which there will be no Mars base. We aren’t there quite yet, but we’re working on it.”
“I don’t think that humanity’s end is upon us,” he continues, “but given that this is the first time in history where it’s been possible for us to become multi-planetary, it makes a lot of sense to act now.”
After the Apollo lunar missions, Nasa’s budget shrank from more than 4 per cent of the federal budget to its current level of under 0.5 per cent. Private investors and companies have been left to make up the shortfall.
“When I founded SpaceX, development in space transport and rocket technology had essentially frozen,” says Musk. “The Russians had the same rockets they were using when the Soviet Union fell; the US had Boeing and Lockheed rockets that were designed in the last century. The only way technology in any field improves is a result of new entrants. Otherwise, there’s little incentive for the incumbents to get better.”
Would Musk like to visit Mars himself? “Whether I go is a secondary matter,” he says. “This needs to be established for the good of humanity.” However, he understands why so many people are sceptical about the idea of establishing a human settlement on Mars. It is, Musk says, “one of the most difficult things humanity will ever attempt”.
The Chinese National Space Administration says it is on target to achieve manned flights to Mars in the 2040s, but there are other, more eyebrow-raising projects planned by the private sector that aim to get there sooner.
The Dutch blazed a trail in reality television with the creation of Big Brother. Now they are taking the genre to another planet. Last year Bas Lansdorp, a 36-year-old Dutch entrepreneur, advertised for volunteers willing to embark on a one-way trip to Mars to set up a human colony. He plans to foot most of the £4bn bill by staging a global media event, with TV coverage of the entire enterprise, from the astronaut selection process to the pioneers’ time on Mars. “We are in advance negotiations with a major US studio,” says Lansdorp.
The project, called Mars One, has signalled its intent by partnering with Lockheed Martin, the company contracted by Nasa to build some of its spacecrafts. “We aim to get there by 2025,” says Lansdorp. I point out that Mars One has attracted plenty of detractors who say the project is scientifically unfeasible. “A lot of critics don’t know the details of our plan,” he retorts. “And so far, they haven’t pointed out a single problem that we haven’t been able to find a solution for.”
If Mars One is successful, 24 people will be sent to live on the “red planet”. The astronauts will settle into inflatable pods containing a bedroom, living room, office and food production unit where, says Lansdorp, they will grow vegetables, plants, algae and insects. “To relax, they can do most things we do here on Earth indoors: watch TV, email and video their friends from home,” he says.
A one-way trip to Mars may sound like something you would not wish on your worst enemy, but more than 200,000 people applied from 140 countries during the first phase of selection. The applicant pool has since been cut to 1,058 candidates.
Among them is Danielle Potter, a 29-year-old former hairdresser turned PhD cancer research student at the University of Manchester. Her biggest worry is leaving her friends and family. “My boyfriend won’t even speak to me about it, but I’m trying to explain the bigger picture to him,” she says. Although she is excited about being part of “the biggest event in history”, she has a lot of scientific questions for the Mars One team. “Life on Mars will be pretty horrible. Is there enough water there for us to live off? What if the crops fail? And will the spacesuits protect us from radiation?” Still, Potter thinks the reality TV show could do with someone like her: “I’m a scientist with the personality of a hairdresser.”
Maggie Lieu, a 23-year-old PhD student with the Astrophysics and Space Research Group at the University of Birmingham, is also on the Mars One longlist. “Mankind hasn’t set foot on the Moon since 1972. This mission would have a similar effect on people’s imagination,” she says when I ask her why she signed up. “It’s pushing the boundaries of science, and it’s a once-in-a-lifetime opportunity,” says Lieu. “Who wouldn’t want to be a part of that?”
Plenty of people, I reply, pointing out that Mars One is a one-way mission. “Companies will develop ways of getting back,” she explains, “but the project is still a long way off. I think Mars One will happen but not on the timescale they are saying. But I do think we’ll get to Mars in my lifetime.”
Buzz Aldrin is supportive of Mars One but has some reservations. “The project needs international co-operation if it is to meet its deadlines,” he says. “But the incentive to do it is there. The challenge of colonising Mars easily surpasses my achievement of walking on the Moon.”
Of course, whether many space ventures will get off the ground, let alone turn a profit, is impossible to predict. Space projects have undeveloped markets and prolonged periods of development. They also eat up cash.
Are there enough wealthy entrepreneurs to make space tourism viable? Research by The Tauri Group, a US consultancy firm, suggests that over the next decade more than 4,000 people will buy tickets for suborbital space flights. This will generate revenues of about $600m which, says the report, will be enough to support an industry of multiple operators.
“A few years ago space was considered a rarefied hobby, but now it’s being taken seriously as a commercial investment opportunity,” says Liam Bailey of Knight Frank. “We’ve noticed an upturn in the amount of UHNWIs investing in commercial space travel. But this isn’t surprising when you consider that many of them made their money in tech, showing that they already have a proven track record of pushing boundaries, which they find thrilling. Commercial space travel is a step into the unknown for them; it’s the next big thing.”
In the Knight Frank Wealth Report, Virgin’s Branson predicts that investment in commercial space will be “one of the most exciting investment sectors in the next 20 years”.
“There is already some good evidence that the leading players are receiving high levels of interest from the mainstream investment community and attracting valuations that reflect confidence in future growth,” he says.
George Whitesides, Virgin Galactic’s chief executive, is similarly bullish. He tells me the company is on track to begin a commercial service on SpaceShipTwo later this year; while suborbital travel on Earth is, he says, “a very exciting, very large market. We could have prototypes ready within five years”. The business opportunity is too big to ignore. “We want Virgin to develop the first space line for planet Earth.”
Andrew Kuh of the UK Space Agency, which is part of the government’s business department, says humans haven’t reached Mars yet because “it is far more complex than scientists anticipated 20, 30 years ago”.
The UK Space Agency says Britain’s space industry contributes £9bn a year to the economy, employs 28,900 people and is growing at a rate of 7.5 per cent a year. Still, Kuh praises private enterprise in space travel as “an interesting intervention”.
“We’re keeping tabs on it,” he says. “A lot of people investing in space right now are hard-headed businessmen and they wouldn’t be doing it if they thought it wouldn’t succeed, or if they didn’t think they’d make money from it.”
Perhaps not. As the popular joke in the space industry goes: “How do you become a new space millionaire? Start off as a billionaire.”
“People have told me that joke 100 times,” says Elon Musk. “And it’s true. If optimising wealth was my goal, I certainly wouldn’t have picked the rocket business.”
When I ask Philip Metzger, a planetary scientist at Nasa’s Kennedy Space Center, whether he thinks Musk’s idea to establish a colony on Mars in the 2020s is feasible, he says: “Space travel is becoming a lot easier and much more affordable as technology gets better. I don’t have any reason to doubt that his mission will be successful. The biggest barrier is money.”
Metzger, 52, grew up next to the Kennedy Space Center. His father worked there, “so as a little boy I got to see all the rocket launches up close”. Now he manages a Nasa lab that develops technology for “living off the land on the Moon or Mars”.
“A lot of our work surrounding the possibility of establishing a colony in Mars involves straightforward engineering,” he says, pointing towards Nasa’s plans to launch a 3D printer into space next year to help astronauts manufacture spare parts and even buildings in zero gravity.
Still, setbacks are probably going to be part of commercial space exploration for as long as there are people doubting its feasibility – the project is simply too big to be otherwise.
Homes on the Moon?
3D printing could make building a house in space a matter of pressing a button and letting a robot do the work, according to Nasa’s Philip Metzger.
“Contour crafting” enables computers to print a building within 24 hours. The layered fabrication technology sees materials such as lunar soil applied in a predetermined design by a nozzle on a moveable gantry. The theory is that the majority of the materials needed to build a structure already exist in space. Using this technology, it will also be possible to create curved walls and architecture. “We’re doing small scale testing now,” says Metzger.
This development comes at time when it is unclear whether the UN Outer Space Treaty, created in 1967, allows private ownership on celestial bodies. Some commercial companies, such as Bigelow Aerospace, which is owned by the billionaire hotel owner Robert Bigelow, are trying to establish private property rights on the Moon. A decision is expected by the summer.
According to Yolande Barnes of Savills: “It raises interesting issues about the value we place on rarity. Perhaps UHNWIs are taking an interest in investing in lunar property in the same way they might a rare commodity. It’s sensible as a derivatives real estate market – markets which work so long as you have a buyer and a seller. But I can’t see Savills becoming a lunar estate agents any time soon. We sell real real estate.”
John Sunyer is a commissioning editor on House & Home
Copyright The Financial Times Limited 2016. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.