BEGINS ON P 1 .SEE DUMMY

By JENNIFER NETHERBY

Staff Reporter

An outer-space hotel? It might not be so farfetched.

Hilton Hotels Inc. is flying in NASA scientists, former astronauts, engineers and other space experts for a closed-door meeting at its Beverly Hills headquarters to assess the feasibility of just such a property.

The purpose of the session, slated for some time in November, is to help Hilton’s top executives decide on strategy for future space-tourism investments.

“We’re taking a very serious look (at space travel),” said spokeswoman Jeannie Datz. “This isn’t like just putting a hotel up on a street corner. There are a lot of questions that we need an answer to.”

The symposium is the culmination of year-long talks that Hilton has been holding with 16 space-related companies. Those discussions have been focused on the prospect of either a “Lunar Hilton” on the moon’s surface, or an orbiting cruise ship that would circle the Earth and moon.

Hilton officials originally planned to announce a deal in July under which it would team up with a space-oriented company to develop a moon hotel (and coinciding with the 30th anniversary of Neil Armstrong’s first moonwalk). Instead, the company decided on a symposium to determine the viability of a space hotel and, more importantly, whether the public would pay for a ticket to the moon.

The gathering will address numerous issues, including safety, health, food service and perhaps the ultimate question: What would people do up there?

“Do you have to eat Tang for a week, or can you eat a New York steak?” said Datz. “We don’t know.”

While the company did not identify all 16 groups with which it has been holding space-related talks, the names of two have been confirmed. They are ShareSpace Foundation, an Arlington, Va.-based non-profit organization headed by former astronaut Buzz Aldrin, and West Covina-based Space Island Group, a for-profit company that wants to build an orbiting resort.

Reactions to Hilton’s overture range from dismissive chuckles to enthusiastic support.

John Spencer, president of Space Tourism Society, a Santa Monica organization backed by former astronauts and NASA scientists, said Hilton’s motives might have more to do with generating publicity than with an earnest push to space.

“Any kind of lunar-related stuff is 20 to 30 years off from now,” said Spencer. “Right now we’re at the very early stages of the industry, like aviation was after World War I.”

Analysts said that until the hotel chain begins spending serious money on its otherworldly ventures, shareholders won’t pay much attention.

“This is something that will impact their earnings further out than we do our models,” said Robert A. LaFleur, an analyst with Bear Stearns & Co. “It’s the hotel industry’s concept car. It generates press and goodwill, but from the investment perspective it’s a non-issue.”

Hilton could use some goodwill. Its stock closed at $10.75 on Sept. 15, just above its 52-week low of $10.56 and less than half its 52-week high of $22.81.

The downturn began in earnest last spring, when the company said it would fail to meet earnings projections. The stock deterioration worsened after plans were announced earlier this month to acquire Promus Hotel Corp. for $3.04 billion a price some analysts called too high.

But it’s peanuts compared with what it would cost to develop a hotel in space a plan that Hilton has been considering since the ’60s.

“Thirty years ago, (Hilton Chairman) Barron Hilton said if there’s a hotel in space, he would want it to be a Hilton,” Datz said. “So if it is viable, we would want to be the first.”

Space Island Group, which has been in talks with Hilton to build a resort modeled after the Lunar Hilton in “2001: A Space Odyssey,” wants to be the first outer-space developer. The estimated construction cost: $25 billion.

Gene Meyers, executive director of Space Island, said a two-week trip would cost up to $2 million per person during the first few years. That would likely drop to about $15,000 by the fifth year, he estimated.

“It’s not exactly a week at the Motel 6 in Baldwin Park,” Meyers said.

Aldrin’s ShareSpace, meanwhile, is pushing for space shuttles or cruise ships that could carry hundreds of passengers at a time, a concept that would likely lower the cost, said Executive Director Ron Jones.

Jones said he expects that within the next five years, rocket companies will begin shooting tourists 60 miles above the Earth’s surface for a two-hour ride. But outer-space tourism, he said, is another 20 years off.

For now, ShareSpace and the Space Transportation Association a space lobbying group backed by space entrepreneurs as well as such earthbound companies as Merrill Lynch are prodding NASA and Congress to send regular Joes into orbit. That would allow for research on how zero gravity affects people who aren’t specifically trained as astronauts.

In a preliminary study last year, NASA and the Space Transportation Association concluded that space travel could someday become a $10 billion-a-year segment of the adventure tourism market. The study also found that many Americans might be willing to pay tens of thousands of dollars to be among the first space tourists.

All of which has attracted the attention of airlines, cruise lines, hotel chains and other travel companies.

In April, Virgin Atlantic Corp. Chairman Richard Branson formed Virgin Galactic Airlines as part of his goal to fly people to space and back in the next decade. Robert Bigelow, owner of Budget Suites of America, has committed $500 million toward building a cruise ship that would orbit Earth.

But Saul Leonard, president of Saul F. Leonard Co., a consulting firm in Century City, said Hilton is the only hotel company to advance the discussions.

“Everybody looks into every possible market,” Leonard said. “Do you explore space? Yeah, why not?”