Developing a Space Tourism industry by learning from the thriving Superyacht industry
This brief report highlights some major steps that a potential space tourism provider could take in order to gain a massive advantage in the long run. This report examine’s the thriving super yacht charter industry and how it operates. The purpose of examining this industry is due to the fact that its customers would be of the same financial demographic to that of any space tourism services. Following the examination of each topic, there will be a brief analysis as to how this could be applied to a space tourism business. This report focuses on the business model of developing a space tourism business and not the engineering aspects.
By super yacht charters, we are referring to customers who charter a super yacht including its crew for time periods between a couple of days to a week. We are only examining charters which cost over half a million dollars. Ultimately developing a model for how a space tourism business could develop based on the super yacht industry is ideal from a service and marketing perspective. Space tourism is a new industry and those establishing now have a tremendous opportunity to achieve a first-mover advantage should the effort be placed on developing a strong presence now.
Having examined the topic, there are strong recommendations that should be considered by any company with intentions to get into the business of providing a space tourism service. Firstly this should be considered a luxury service and therefore clients will need a personal relationship with a representative from the company. They will need to develop trust with the company which will be achieved by having this dedicated. representative.
Furthermore, the company should make clear about what service it intends to provide and start light marketing of this. The company should establish a mock-up facility which serious potential client can come to and experience something tangible. This would be the most likely element to cause the closing decision to occur. The company should also place its self in locations where potential clients would be such as the Monaco Yacht Show. It is crucially important that the company works on building its space tourism divisions brand and develops is relationships with potential clients as it my take years for them to be prepared.
1 The service provided by Super yacht charter companies
Yacht charter companies play a major role in facilitating agreements between yacht owners and potential clients. They provide the necessary logistics that ensure smooth cruising, taking up the role of eliminating bottlenecks that may inhibit customer satisfaction. They take care of everything for the client so that they don't need to worry about any logistics.
Secondly, they promote the super yacht charters to the target market. They have locations in many of the yachting hubs such as Fort Lauderdale, Antibes, Palma, and Monaco. In these strategic locations, potential clients can go and view the service on offer and discuss their needs further. They will take a potential client and give them an idea about the type of experience the will have. For space tourism using a similar method could be beneficial. Getting to know potential customers and building a personal relationship over a long period of time we increase the likelihood of them spending a large amount on the service.
Thirdly Companies companies arrange for necessary yacht provisions according to the specifications of the clients. They ensure that the yachts provided meet client specifications. The specifications include the size of the yacht, the exterior and interior design, staff and food specifications. Charter companies will promote and attract potential customers by various means such as yacht shows. This is where they meet many potential clients and where their relationship begin. The reputation the charter company develops is also very important when potential customer are seeking a company. This reputation takes a long time and therefore should be worked on immediately.
How this could be applied to space tourism
Space tourism operators should realise that potential clients not only want to get in space and experience space and its features. Just like in the super yacht industry, clients are always looking forward to efficient service delivery, which depends on the ability to put in place efficient coordination frameworks. Space tourism operators need to set up mechanisms that provide potential customers which are only at an interesting stage and convert them to real customers.
The space tourism company should establish a dedicated base where potential customers can come and experience a sample of the service which will be offered. For example, build a mock-up facility of the capsule and a simulator. While they are in this facility, they will be guided by an experienced salesperson whom will build a relationship which these individuals. The decision to spend the level of money that will be required for this service is a big decision and clients will need to have a tangible idea of what they will receive in return along with having a dedicated representation from the company that they trust. This will enable the delivery of customised services specifically addressing the needs of each client.
It would be unreasonable for the company to develop multiple mock-up facilities so the one that is build should be in a strategic location such as Miami where it is relatively accessible by American and European clients. The mock-up facility could also be used for training clients in preparation for their flight.
2 Reasons for the growth of the Super yacht charter industry
A factor that has contributed heavily to the growth of the super yacht charter industry is the inclusion the ideas of every individual and respective parties in the industry. From shipbuilding to product development, the industry players work on the ideas of every player to reach consensus on the best way to build yachts as well as the right products to develop for the clients (Leybourne, 2010). The inclusion of all these ideas promotes the harmonization of ship building processes as well as the development of superior products for the market.
One of the fruits of inclusion is the adoption of the modular shipbuilding method. This has enabled simultaneous building of multiple super yacht components with the best technology available. Different teams are assigned different units/components that are later assembled to become the mega yachts. This not only quickens the delivery time but also helps cut the costs incurred in the lengthened processes. In this regard, modular construction has provided a quicker and cheaper method of availing super yachts, hence translating to reduced costs to reduced chattering fees for prospective clients (Macal & North, 2009).
The onset of corporate super yacht ownership. This model has enabled easier assembly, ownership, and running of super yachts, especially in Italy. The corporate ownership model has provided more business to ship building centres, unlike the older individual ownership model. Availability of corporate financing in the super yacht industry has seen a surge in the number of super yachts by 75% between 2001 and 2012 (McCartan et.al, 2013). This has enabled better utilization of global shipyard capacity, although not fully. Corporate financing helps in spreading shipbuilding and maintenance costs. This leads to the provision of better prices for cruisers.
There has been a steady increase in flow of clients even as the number of super yachts continues to rise. As the number of yachts rises, so does the intensity of marketing by super yacht service providers. They are able to look for newer markets and newer clients for the leisure business (Merendino, 2013).
A big reason for the rise of the super yacht industry is the increase in high wealth individuals. These individuals have different motivations, some are looking for new experiences while some are just looking for a way to spend their money. Others see chartering a super yacht as a status and image symbol. Going to space could be the ultimate status symbol.
How this could be applied to space tourism
The space tourism industry can learn from the factors that have contributed to the growth of the super yacht industry. Firstly is that the super yacht charter companies target clients from all over the world and then develops relationships with these potential clients. Prospects are shown the vessel at yacht shows. A space tourism company needs to have the ability to display their service to a large number of potential customers without disturbing the manufacturing facility. This is why it is so beneficial to establish a mock-up facility which is dedicated to sales and training. A facility such as this will need to be built anyway for training so it would be more beneficial to build it now and use it to attract customers.
Space tourism would be ideal for those seeking new experiences and have the ability to fund it. Therefore targeting people in locations which are providing unique, exclusive experiences. Some examples of this would be the Yacht show in Fort Lauderdale or the Monaco grand prix.
Cost reduction has played a key role in promoting the super yacht industry. Therefore, space tourism can learn from innovations such as the modular construction process to facilitate faster and cheaper construction of space vehicles. Moreover, the space tourism industry could also implement the corporate ownership model. This will encourage more participation and easier accumulation of funds for investment.
3 Target clients for yacht charters costing over half a million dollars per week.
The following are the target customers for the super yacht industry:
Wealthy individuals from all regions around the world
Individuals seeking an alternative experience
How this could be applied to space tourism
Potential Space tourism companies should realise that the market for luxury tourism is narrow and specific. The targeted clients are easy to identify since they compose of the richest people in the society. The marketing strategy should, therefore, be more personal unlike the case of general products. This also highlights the level of competition expected from other players who target the same narrow market. Many of this customers are looking for alternative experiences and are willing to pay for it. Therefore, the promotion of space tourism as an alternative experience would be well suited in locations such as Yacht shows. The importance of having the ability to build a personal relationship with clients and demonstrate the service to them cannot be stressed enough.
4 What motivates clients to spend over half a million on a week long charter?
Availability of free and unbiased advice. Individuals wishing to charter yachts enjoy freely available and reliable information on the best yachts in the market depending on their preferences. For example, individuals wishing to secure the cheapest charters available can go through the independent price listings and decide on the best prices that suit their budget (Spence, 2014). Space tourism companies need a base where clients can discuss and preview their desired experience.
The openness of information shared regarding the products available builds trust between super yacht operators and travel agencies linking the customers to the yacht service providers (Leybourne, 2010). This ensures value for money for the customers; they feel more satisfied and come back year after year. With this kind of respectable profile and openness, cruisers are always willing to part with large amounts of money to charter vessels for holidays as well as other official functions. The affirmation of quality service is a critical bargaining point in the industry. While customers may not come back year after year, they can make recommendations and overall increase the image of the service provided.
Super yachts offer one of the most customer-oriented services. In fact, some of the super yachts have staff ratios of one staff for every guest. This leads to the delivery of incredible customer-focussed services to the guests. Such forms of detailed customer satisfaction are what motivate individuals to spend so heavily on one week. The service delivery is superb and customer satisfaction unbelievable. The quality of service delivery, therefore, justifies every cost that the clients incur in chartering the super yacht. This personalised service is something space tourism companies should consider while developing their service. Obviously, it would be unreasonable to have a staff to client ratio of one to one. However, there will obviously need to be a qualified pilot on board that can operate the spacecraft’s systems. It would also be beneficial to have a host/hostess that could take care of the clients needs and also be trained in the operation of the spacecraft’s systems.
The high-quality service is further enhanced by the provision of quality chef-prepared meals of a large variety. The super yachts house magnificent restaurants that provide cuisines from all cultures with the best spices and best breed of groceries and protein. Therefore, chartering a super yacht is being able to go through a food adventure, provided at the best service and quality available anywhere. Clients get a taste of different cultures, with all kinds of specialities available all day and night (Spence, 2016). Food will obviously not be a key focus with space tourism, especially in the early stages however there should be a great effort put into maximising the comfort for the clients. This goes from everything such as food and sleeping arrangements all the way to the lavatory facilities.
In most cases, super yachts are composed of individuals who know each other quite well. This makes the adventure even more interesting as individuals will not have to struggle to create new friends while cruising. Therefore, the experience is more private as opposed to booking a vessel that you have no idea who else is in the vessel. This is why a space tourism company should not only sell on a per seat basis but also offer a package where they can charter the entire space vehicle in which the clients can being whom they want. Of course there will still be a large amount of business had from selling individual seats.
5 How charter companies sell their charter
Super yacht service providers engage in serious product promotion and marketing efforts. The super yacht marketing departments are charged with availing business communications such as promotional materials, mailings, and magazines (Spence, 2016). The marketing departments are the architects of super yacht business development. The super yacht industry is characterised by integrated marketing processes through the utilization of a range of disciplines. These processes aim at building strong relationships between chartering agencies and yacht owners and then creating high value for individuals wishing to charter yachts. This ensures the satisfaction of yacht owners, clients as well as chartering agencies.
Marketing teams identify potential customers and then draw them into the fold. This includes direct contacts through personal meetings and sometimes telephone conversations. Marketers give a presentation of the available products and services on offer as well as the preferred methods of payments. Marketers then ensure the provision of proper links between super yacht companies, chartering agencies and the clients (Spence, 2016). Marketers also ensure that they hold on to the acquired clients to make sure they are not lured by competition. This includes offering incentives, maintaining constant communication and offering guidance on the chartering processes and procedures. Persuasive techniques play a huge role in bringing business by convincing potential clients of the value created through chartering.
Brokers provide the linkage between marketers, yacht owners and customers. Chartering agencies, just like marketers, produce their own lifestyle magazines highlighting the service available under yacht chartering (Spence, 2016). The glossy magazines give a summary of client experience as well as the terms of engagement between potential clients, chartering companies, and yacht owners. Charter agents involve other backroom processes that support the implementation of product and marketing ideas to the potential clients. With the technological revolution, electronic content now plays a bigger role in securing customers. Every super yacht chartering company has online portals that advertise available yachts for chartering and a description of their basic features.
How this could be applied to space tourism
Players in the space tourism industry will need to appreciate the importance of persuasive marketing in the promotion of luxury tourism. Just like in the super yacht industry, space tourism operators will have to dedicate a large portion of their budget towards marketing activities. Additionally, space tourism companies should also embrace the agency model if they are to secure a constant supply of tourists to space (Dwyer et.al, 2009). Chartering agencies and their marketers play a huge part in developing luxury tourism. The establishment of relationships should begin as soon as possible even if the service is many years out. This should be done firstly by having a presence at important events where potential clients will be. Simultaneously building an image as a company that will be providing this service. The longer that people are familiar with the idea that you provide this service, the more they will trust it. Following this, the establishment of the mock-up facility where potential customers can go to experience the service and get more information. This is where the relationship with the clients will be strongly developed.
6 Proposed model for how Space X would develop a space tourism serviceThe agency model is the best model for space tourism operators. However, the space tourism industry is at its infancy. Therefore, the industry will have to go through a number of slow phases as it establishes itself as the favourite source of adventure. Should Space X start working now at building its space tourism divisions brand, it could gain a great first mover advantage. Even if the spacecraft and service are nowhere need ready, it will be of great benefit to have clients ready and a strong image. For many people, it will take many years from making the decision to go to space to them actually being able to. The stages are as follows:
This is the phase where space tourism operators will introduce the product to the market as an initial offer; this is the most difficult stage in the model since the number of customers will relatively be few. Many people view space tourism with a lot of scepticism especially with the high-risk levels involved. Having few customers will not be a huge issue as output will be limited to the ability to produce and provide each launch. The objective at this point is to create a large waiting list of which deposits have been paid in order to validate the level of demand. By knowing the definite level of demand for the coming years, the company will be able to safely increase its production to facilitate a level closer to that. At this stage, space tourism marketers will be forced to charge excessive prices while they aim to lure more clients to test the product (Butler, 2009). At first, the company will only be able to handle a very few number of launches and therefore the cost will be similar to that of launching today. The selling features at this point will be the simple orbital accommodation services. This unique product should thrill everyone interested in a space adventure. This market will be the wealthy individuals with an interest in space exploration or seeking new experiences.
This stage will be characterised by high advertisement expenditures as the marketing team aim to reach and convince potentials clients across the globe. The establishment of a mock-up facility is crucial for this stage, and it will be the primary means of closing sales. It is also crucial to have it in a location which is relatively central to both the American market and European market. A location such as Miami or Fort Lauderdale would be ideal as it is close to the main yachting hub in American and is a desirable location for wealthy individuals to stay. Orbital structures will be very simplistic and as what is currently under development. Space operators look to set improved facilities upon confirmation of the market potential. Despite the low numbers, marketers should maintain aggressive advertising necessary for product penetration. This period can last approximately ten years.
The mature phase will depend heavily on the foundations laid in the pioneering phase. Marketing channels and agency frameworks formulated under the pioneering stage will remain the primary way of attracting potential clients. At the mature stage, the number of space tourists is expected to grow greatly. The cost for tickets to orbit will be significantly less than during the pioneering stage because of deeper market penetration and anticipated cost-reducing technologies (Reddy et.al, 2012).
Flights to space may depart from different locations as opposed to only one during the initial stage. Better information sharing and standardisation of space operations will decentralise space tourism. The rise in the number of clients will also see the development of better orbital facilities that can host a larger number of guests. The construction of bigger facilities will enable the provision of various forms of entertainment and services in space. With this development, operators will be able to integrate different functions such as special family or corporate events. (Reddy et.al, 2012). The marketing for this stage will remain similar however there may be multiple mock-up facilities developed in different regions. Furthermore as the cost decreases and the frequency of service increases the target customers will expand beyond wealthy individuals with a strong interest in space exploration.
The mass phase will be characterised by the normalisation of space tourism. Space tourism will be regarded as normal, featuring in the timetable of individuals across the globe. The ticket prices are expected to fall significantly, and the number of customers will be vastly greater than the beginning stages. The orbital establishments will have been developed to very high standards, allowing various activities to be carried out in the orbital establishments.
There are many things a space tourism business can learn from the super yacht industry. It is important to consider now how the service will be promoted and provided even if it is many years off. Potential clients will need to spend a great deal of time and money before they can enjoy this service. In order to do so, they will need to firstly need to gain awareness and familiarisation with the concept before they will consider becoming a client. Secondly, they will need to develop a trusting relationship with the company and have a sample as to what they will experience. For this reason, it is strongly recommended to consider establishing a mock-up facility which is dedicated to attracting potential clients and giving them a sample of the service. This is an important element in creating the relationship with clients, and it gives them something tangible while they wait the few years it will take to have the service ready. This facility will also be used for training of the clients. A facility such as this will need to be built anyway so it would be more beneficial to build it now and use it to attract customers.
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