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How can we help Space Tourists eleveate the costs of travel?

Posted by: GeoBum - Thu Jul 31, 2003 3:31 am
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How can we help Space Tourists eleveate the costs of travel? 

What do you think is a 'fair" price to pay for space travel?
under $50,000.00? 83%  83%  [ 19 ]
$1 million ? 9%  9%  [ 2 ]
$20 million is fine by me !!! 4%  4%  [ 1 ]
I would like to have Sponsors help pay my way !! 4%  4%  [ 1 ]
Total votes : 23

How can we help Space Tourists eleveate the costs of travel? 
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Space Station Commander
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Post    Posted on: Wed Jun 30, 2004 1:55 pm
Ekkehard Augustin wrote:
In Economics we have a term named "Deckungsbeitrag" in german - I don't know the english translation this moment. "contribution to coverage of costs" perhaps may an approximation to the right english term.

I think, given the context, the correct translation might be "amount of coverage" or "profit contribution". I understand how you are trying to translate from your mother language to English and that this is not easy given your subject matter, but I find your post difficult to interpret.

This statement ...
Ekkehard wrote:
If a team finds a tourist paying a price higher than the variable non-common costs per unit of service or product then this tourist should receive the travel to space if there is place left for him.

... seems blindingly obvious (i.e. if tourist can afford the price [which factors in a sufficient profit for the operator] of an available ride, then tourist should get the ride), so what have I missed?

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Post    Posted on: Wed Jun 30, 2004 2:03 pm
I hope they (the x prize teams that can get suborbital) charge alot for the first rides and make alot of money so they can get to orbit faster.

1 million dollars a ride... means you heave 100 million dollars minus expenses if you send 100 tourists up.


If they charged 1 million per tourist they could pay off their investment money very fast.

Could they not find 100 or more people who would pay 1 million dollars to be among the first to ride?


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Post    Posted on: Wed Jun 30, 2004 2:34 pm
My statement is blindingly obvious, yes. The only reason to give this statemnet was to recommend a special price policy based on it - the team better should accept a low price to get profit contribution than insist on a higher price and miss the tourist. That's a good strategy for the team.

This way other services successful sold at high prices can cause low prices for tourists. Space travels get an advantage in price from not having priority. Not to insist on priority of space travels is a good strategy for tourists an private space travels - now, the future that will change that.



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Post    Posted on: Wed Jun 30, 2004 2:40 pm
Oh, I think I understand. You mean how airlines find it better to carry a passenger at a cost that only covers the expense is better than an empty seat right? So the profit from the flight is effectively paid by those who took the first availability and pretty much subsidise the flights of others?

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Post    Posted on: Wed Jun 30, 2004 9:22 pm
Why not just auction off the seats at first?


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Post    Posted on: Thu Jul 01, 2004 7:06 am
Hello. luke.r and Texan,

you're right. But all of the possible services of a spacecraft should be auctioned off together. First the service best payed is sold. Then the service payed most similar to the first follows and so on. This strategy takes into account that there are services of possible interest for industrial enterprises. These customers are easily able to pay prices most tourists won't pay and perhaps will sell the services. This way the teams get back the capital invested in their spacecrafts faster.

The condition that there has to be at least one tourist is an option to offer travels together with the other services at less prices tourists will pay - and by these less prices they will create and enter the market of space tourism and private space travels.

One day they will have the capital invested back. Then they can modify and change their business policies - and they will I think. Their interest will turn to the tourist market and they will reduce the price to get market shares and optimize the number of flights.



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Post    Posted on: Thu Jul 01, 2004 5:40 pm
I am confused, I only understand part of what you are saying.


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Post    Posted on: Fri Jul 02, 2004 7:01 am
What are the points you don't understand? May be my English has been wrong.

But let me try it another way here:

Industral enterprises are able to pay prices a tourist never would pay. The private spacecraft teams have a lot of capital invested and the investors want to get return on investment (ROI).

So first the teams should sell service of their spacecrafts to the industrial firms. This way they will get the revenues, the revenue needed for ROI faster than servicing the tourists.

They could decide to offer a travel for at least one tourist at a low price the tourist will pay - this way they will cause the evolution of a space travel market more stable than the market for selling service to industrial firms but having prices only at low level.

One day the total of payments they ever got, the sum of their revenues from the market will be equal to the amount of money invested into the spacecraft plus fuel for all flights really done.

That day they have reached amortization. Than they can change business policies, reduce prices and much more.

If the teams don't sell services first to enterprises they will have towait longer for this day.



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Post    Posted on: Fri Jul 02, 2004 3:10 pm
Ekkehard Augustin,

You are correct that space companies will serve companies or people who will generate the most revenue per flight. If that is industrial companies conducting zero g manufacturing or experiments, great! If that is wealthy people with a desire to see earth from above, great!

I would only add that there is a cultural aspect of space travel. The more people that go into space, then more people will believe they could go to space one day.

Imagine if you will, the top female German celebrity takes trip to space, suborbital or orbital, every German kid will be dreaming about going to space.

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Post    Posted on: Fri Jul 02, 2004 4:39 pm
have you read Buzz Aldrin's and John Barnes' "The Return"?

I have an autographed copy (well, just Aldrin's signature, not Barnes.)

Anyway a basketball player goes into space... gets killed...

lol :roll:


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Post    Posted on: Fri Jul 02, 2004 8:51 pm
OK, let's say Kobe Bryant go into space and buys the farm. He would be immortalized. He also would not have to go to trial for not knowing how to keep his pants zipped. :lol:

My point is that as more famous people go to space, like Tom Hanks, Lance Bass, Heidi Klum, Al Gore (space cadet) etc., the more people will think about going themselves, which will expand the available market as the price comes down.

And sometimes there will be fatalities, just as in any other human activity. That's life.

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Post    Posted on: Sat Jul 03, 2004 12:26 am
Yeah


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Post    Posted on: Sat Jul 03, 2004 2:17 pm
People didn't stop flying on the Day the Music Died. Why should Claudia Schiffer being killed in a space accident change anything? As long as the general perception is one of space being reasonably safe to travel (on the order of taking a passenger flight), there's no problem at all.

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Post    Posted on: Sun Jul 04, 2004 6:47 pm
Hello, Traveler,

you're right - that is really, what I wanted to say.

The only thing to consider is acquisition and advertising. Industrial firms being potential customers of private spacecraft and space travel firms are well known to enterprises like Scaled Composites. They don't be counted by billions - they are counted by thousands only.

But private persons able to pay 100,000 Dollar for a space travel all over the world count by millions I suppose - they don't need to be income millionaires, they may be asset millionaires forced to pay high tax rates out of the assets.

These private persons seldom are as well known to private space travel enterprises as industrial firms are.

I say this to give an advice that may assist the economical success of privte space travels, the private firms offering the travels and the private firms developing and constructing th private spacecrafts.



Dipl.-Volkswirt (bdvb) Augustin (Political Economist)


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