Space tourism: We have lift-off

Sir Richard Branson's spaceship Virgin Galactic has completed its maiden flight and will soon be carrying paying passengers, Stephen Foley reports

It is nine years since a US rocket scientist-turned-investment manager called Dennis Tito blasted into space aboard a Soyuz rocket for a seven-day stay at the international space station, becoming the first paying customer of the space tourism industry.

He was a passenger of the Russian space agency, and paid an eight-figure sum that some reports put as high as $20m for the privilege. What with the cost being that high – and the number of free seats being few and far between – it is hardly surprising that just six tourists had followed in his zero-gravity footsteps by the end of the decade.

This decade, however, could be a very different story: there are predictions floating around that space tourism could be a $700m industry by 2020, flying thousands of passengers a year as far as zero gravity and back, for the thrill ride of their lives. Tickets are on sale now, at $200,000 a pop, from the ballooning billionaire Sir Richard Branson, whose Virgin Galactic company passed another important milestone in its testing regime this week. Meanwhile, a range of other entrepreneurs are also piling into this new space race, for the first time convinced there might actually be some money to be made.

"People grow up just fascinated by space travel," says Will Pomerantz, of the X Prize Foundation, which organises competitions to encourage commercial space travel. "There are primitive emotions and instincts that drive people to it. It's loud, it's sexy, and it is in some senses dangerous, so it gets a lot of people excited. But the people who got into this as a hobby are starting to realise that it needn't just be that."

Virgin Galactic has already taken around $45m (£30m) in deposits for spaceflight reservations from over 330 people wanting to get into suborbital space, to see the curvature of the earth and feel the effects of zero gravity. The Hollywood director Brian Singer and the former Dallas star Victoria Principal are among the famous faces that plan to be on the first flights.

Sir Richard's six-passenger spacecraft, which he's calling the VSS (for Virgin SpaceShips) Enterprise, is the most advanced and apparently best-funded of the space tourism ventures in development. It has been developed by Burt Rutan, winner of a 2004 X Prize with a prototype that became the first craft to complete two consecutive trips into suborbital space carrying the weight of at least three people.

The VSS Enterprise will be carried to a height of 50,000ft attached to a mothership, and then launch the rest of the way into space. On Monday both mothership and Enterprise flew up to that height together in a maiden test flight. "Seeing the finished spaceship in December was a major day for us but watching VSS Enterprise fly for the first time really brings home what beautiful, ground-breaking vehicles Burt and his team have developed for us," Sir Richard said. "It comes as no surprise that the flight went so well, the team is uniquely qualified to bring this important and incredible dream to reality."

When Sir Richard first teamed up with Mr Rutan, the hope was that the first passenger journeys might begin in 2008; that they are now pencilled in for next year, or maybe 2012, is a reminder that many space dreams take longer to come to fruition than hoped – if they come true at all. Sir Richard's boasts of being four or five years ahead of the competition may not amount to statistical significance in this complex, technical area.

California-based Xcor, which is developing a two-seater rocket plane to get into suborbital space, recently signed a deal to export its technology for use in South Korea. Meanwhile, Armadillo Aerospace, founded by the computer game developer behind Doom, John Cormack, has been working on a craft that will take scientific payloads soon, and humans later. And, in the background somewhere there is Jeff Bezos, founder of Amazon, who created Blue Origin and set up a spaceport in west Texas with the aim of manned flight by this year. His secretive company had gone silent for two years until dramatically re-emerging a few months ago with a $3.7m Nasa grant to develop a craft for orbital space flight.

"Virgin is definitely our lead dog in the field," Mr Pomerantz said, "and it certainly has the most publicity and the most visible partners, but we are starting to see others making great leaps and bounds in terms of their ability to fly scientific payloads. From a business point of view, you can start flying scientific payloads earlier in the testing regime, because of course they don't have quite the same safety requirements as people."

Entrepreneurs who build a business based on ferrying cargo could quickly evolve into passenger carriers, too, Mr Pomerantz said.

There has been a proliferation of prizes on offer for breakthroughs in space flight, in an echo of the early days of air travel, where Charles Lindbergh's flight from New York to Paris in 1927 in the Spirit of St Louis won him $25,000, for example. Google is sponsoring another X Prize, this time for the first commercial venture to put a robotic rover on the moon.

There also seems to be competition developing among different states in the US and regions elsewhere in the world for the opportunity of playing host to these pioneering space companies. Virgin Galactic got $300m from the state of New Mexico to subsidise Spaceport America in the Mojave desert, and the government of Abu Dhabi paid $280m for a one-third stake in the company and a promise to use the emirate as a hub for travel from the Middle East. There even appears to be feisty local campaigns in areas of Scotland, to win Virgin Galactic's business among three airforce bases.

And now Nasa is showering money, too. Its budget has been slashed and its programme to put a man on Mars has been scrapped, so it is focusing instead on seeding commercial ventures, and last month it offered $75m in grants to commercial operators that can put scientific payloads into suborbital space on its behalf.

"For everyone who has dreamt of participating in the grand adventure of spaceflight, this $75m commitment marks the dawn of a new space age," Alan Stern of the Commercial Spaceflight Federation said at the time. "As the commercial space industry continues to grow, I expect that we will see increasing numbers of payloads and people flying to space."

The early ticket buyers are most likely paying a premium price to secure their places in the history books. Observers expect that prices will quickly fall, perhaps to a half or even a quarter within the decade, which should stoke demand. A 2002 market research report from the consulting firm Futron is still viewed as a reference point for the nascent industry, since it polled the very wealthy individuals about their desire – and their fitness – to travel into space. It concluded that, if prices fall significantly, there could be 15,000 suborbital space tourists annually by the end of this decade, and while the technical timelines have slipped and slipped again, the demand is hardly likely to have done: there are plenty more millionaires and billionaires now than there were when the survey was conducted.

In the 49 years since Yuri Gagarin's pioneering flight, 512 people from 38 countries have been to space. The first operational suborbital craft could easily beat that record all on its own. Now there is just the little matter of proving it's technically possible.