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Origin:Proceedings of 2nd ISST, Daimler-Chrysler GmbH.

In order to attract investors from the capital markets, the cost of capital for a space tourism venture has to be quantified and qualifying financing models have to be set up. This leads to the two really significant terms for investors, namely those of Net Present Value (NPV) and Cost of Capital. In order to derive the latter, this paper uses a comparables method to estimate the business risk index (Beta) for a typical future space tourism operation. This results in a relatively high cost of capital of 17.6% (!); compared to the 6% which had been used for earlier evaluations of space tourism.Then the paper goes on to apply this cost figure to some existing business scenarios in order to derive the NPVs of typical space tour ventures. As can be seen in the results, the high cost of capital represents a significant challenge for the sophistication and professionalism of future business plans and financial models. Based on a concluding sensitivity analysis and on some recent experiences from ongoing commercial space projects, some lessons learned are presented. If applied properly, these will help to make space tourism economically viable.

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