The year was 1967. Star Trek had come out the previous year, Neil Armstrong was just two years away from walking on the moon, and Barron Hilton, heir the the Hilton fortune, loved to fly. That year, at the 13th conference of the American Astronautical Society, Hilton outlined his plans for “Orbiter Hiltons” in low Earth orbit and “Lunar Hiltons” on the moon.
This year, 50 years after Hilton’s ambitious announcement, the prospect of commercial real estate in space finally feels as though it could become a reality.
Commercial space travel has been a goal for a generation, but the high cost of getting things – anything – into space has been more or less prohibitive. With a per-tourist price tag of getting to the International Space Station of about $30 million, it’s easy to see why only seven tourists have ever had the pleasure.
That may be changing with the advent of reusable rockets, courtesy of Elon Musk’s SpaceX and a few of his competitors. The single most important cost involved in space travel to date is that rockets have been single use objects made to fall back to Earth after delivering their payload into orbit. To borrow an analogy from Wait But Why’s Tim Urban, imagine the price of a plane ticket if planes couldn’t be landed. Instead of landing on a runway at your destination, the plane ejects a small pod full of passengers and their luggage. The rest of the multi-million dollar machine crashes to the ground in a fiery wreck. Logistical issues aside, the cost of a plane ticket would no longer be a matter of covering fuel, labor, and onboard snacks – it would have to cover the entire cost of building the plane.
With reusable rockets, the prospect of (comparably) low-cost space travel is coming back into the limelight, and private industry is beginning to take notice. The next step, as always, is setting up the commercial real estate where they will conduct their business.
This Man’s Moon
The prospect of real estate in outer space has, so far, been dubious. Most people’s experience with alien land rights come back to a man named Dennis Hope, who claims to own the moon and since the early 1980s has been selling it, one plot at a time.
Hope’s claim is, if you’ll indulge a pun, pure lunacy. It’s based on a letter he wrote to the United Nations indicating his intention to claim the moon along with several other heavenly bodies, and asking for a reply only if they were contesting his claim. That he never heard back is, in his mind, evidence that the UN upholds his claim.
Since his initial claim, Hope has sold 611 million acres of land on the moon. The current rate is $19.95 for a one-acre lot – $36.50 after shipping and handling of the deed and a “lunar tax.” He’s sold plots to former presidents Reagan, Carter, and Bush, and once sold 2.66 million acres for $250,000.
Hope has met with foreign dignitaries and the International Monetary Fund in attempts to get the lunar government, of which he is president, and the Lunar Delta, its currency, respectively recognized. Despite virtually no one recognizing his claim to the moon, Hope seems ready to vigorously defend his claim.
“When China announced they planned to be on the moon by 2012, we wrote a letter to their president saying we didn’t have a problem with it as long as they had a licensing agreement with us,” Hope told U.S. News. “Otherwise, their craft would not reach the moon.”
What Hope’s lunar government would do to prevent the Chinese ship from reaching the moon is unclear.
Barron Hilton’s guess was probably correct – the inherent novelty of space means that one of the first fully-private footholds on the final frontier will come from ferrying travelers up to luxury rooms and cocktail lounges in low orbit. Before that point is reached, though, revenue will have to come from a patchwork of research, manufacturing, and the few high-net-worth individuals brave enough and rich enough to be early space tourists.
Barron Hilton‘s company probably won’t be producing the first space hotel. Right now, the major competitors are Bigelow Aerospace and Axiom Space.
Bigelow Aerospace, owned wholly by the budget hotel mogul Robert Bigelow, was founded in 1999 to work on space habitats and research labs. Its successful delivery of BEAM, short for Bigelow Expandable Activity Module, as part of a $17.8 million contract with NASA give the company a solid lead.
Bigelow has spent approximately $290 million funding the venture so far. Initially, occupants in BEAMs would likely be scientists and state-sponsored astronauts, considering the expected price tag of $60 million per year, but Bigelow is looking to a future that involves space tourism.
“Everything depends on the taxi side of the business,” he told Fortune. He plans to launch two more capsules by 2020 to get in early to an industry that, he thinks, could be worth $100 billion in five years.
Meanwhile, if Bigelow’s plan seems ambitious, Axiom Space is (figuratively) shooting for the moon. The company told Space.com that it is already lining up tenants for the first commercial space station, which it anticipates replacing the ISS when it is abandoned in 2024 or 2028.
“We are now deep into conversations with our first nonsovereign astronaut customers,” Amir Blachman, vice president of strategic development, told the news source. “The pace is quick. We’re answering a demand that’s clearly there.”
Perhaps the most striking feature of Axiom’s plan is that it’s on a real timeline that is already underway. It plans to begin flying passengers to the ISS in 2019, and those passengers are set to begin training this year. In late 2020, Axiom would attach its first commercial module to the space station, which would then detach form the basis of its own space station when the ISS is decommissioned.
Space tourism is only one of Axiom’s anticipated revenue streams. It would also rent to tenants conducting research, zero-g manufacturing, and in-space supply logistics.
Legal Wrangling on the Final Frontier
It sounds disappointingly mundane in the face of space exploration, but one of the major hurdles faced by the first commercial businesses to get past low Earth orbit and reach the moon will be legal.
An international treaty signed the same year that Barron Hilton presented his improbable space hotels known simply as The Outer Space Treaty makes it illegal for states to lay claim to outer space real estate. It states that, “Outer space, including the moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.”
It goes on to state that “all stations, installations, equipment, and space vehicles on the moon and other celestial bodies shall be open to representatives of other States Party to the Treaty on a basis of reciprocity.”
What does this mean? Essentially, no one can lay claim to an area outside of the Earth’s atmosphere, and no one can be excluded from an installation on a planet that isn’t Earth. That makes the whole notion of ownership of a property an iffy concept at best. At least, that’s one interpretation.
There are other interpretations that suggest corporations and private individuals may be able to claim territory and it’s only the “states” mentioned in the treaty that can’t. For example, Dennis Hope’s claim to the moon rests on this hotly disputed assumption. The treaty does differentiate between states and non-government entities, but in the same breath establishes a state’s responsibility for those entities under its flag. Does that responsibility extend state’s prohibition on claiming territory to their citizens? No one is quite sure.
Harvard-Smithsonian astrophysicist Martin Elvis told Smithsonian Magazine that there may be loopholes in the language of the law that allow de-facto land grabs as well.
Because, for obvious reasons, there is no case law in the area of space real estate, it may be some time before we figure out how this washes out. What does seem clear is that this issue should be solved before the “Lunar Hilton” or its equivalent gets built; investors aren’t likely to put money into a project that could be ruled illegal a few years later. Considering the hopes that are being hung on private space enterprises right now, regulatory certainty one way or the other is going to be essential.
Barron Hilton turns 90 this year, and he may yet live to see the first space hotels, even if they don’t have his name on them. Someday space offices, manufacturing, apartments, and even space retail will seem normal and simple, even if they’re enormously complex behind the scenes.
And someone’s going to have to manage them.