Yesterday the team behind a mini spaceship won $10m - and ignited space tourism - by sending it 100 kilometres above Earth, reports Shane Hegarty

The holiday may last no longer than a few minutes, and involve a journey that will make tourists weightless and their wallets lighter too, but yesterday's flight by SpaceShipOne might finally have opened the skies to cheap space tourism. Richard Branson is planning a fleet of spaceships. Other entrepreneurs are planning orbiting hotels and casinos. Within a generation trips into space might be affordable to millions.

SpaceShipOne claimed the $10 million (€8 million) X Prize for its designer, Burt Rutan, when Brian Binnie piloted its second suborbital flight in two weeks while carrying the weight of three people. Since 1996 the cash has lured a host of entrepreneurs, scientists, engineers and dreamers, kick-starting the commercial space race. With money put up by a wealthy Dallas family called the Ansaris, the prize was intended to have the same impact on space travel as the Orteig Prize had on air travel. Charles Lindbergh claimed $25,000 in 1927 after making the first solo transatlantic flight.

There has been a particular impetus for claiming the X Prize this year, as the policy underwriting it expires at the end of December. By this summer 27 teams had registered, including groups from Israel, Romania, Argentina and Britain. Since Mike Melvill piloted SpaceShipOne's first space flight, in June, tests by other teams have ended in crashes and explosions.

Now that the X Prize has been won, some of the teams are turning their attention to building the first craft to make it into orbit. Although space begins 100 kilometres above Earth, to get into orbit a ship will need to reach at least 350 kilometres, travelling at about 18,000 m.p.h. SpaceShipOne reached about 2,100 m.p.h. And while going up is one thing, coming down is another. A high-performance heat shield is needed to stop the craft from burning up. None of this comes cheap.

The incentive might again come from a prize fund. Step forward Robert Bigelow, a budget-hotel billionaire with a deep interest not only in UFOs but also in sticking a strange object in the skies himself. He will reportedly give $50 million (€40 million) to the first team that can put a vehicle carrying up to seven passengers into orbit. He's hoping it will lead to the development of craft that can dock with an inflatable space station his company is building. Ultimately, he hopes to put a hotel in space.

Dan Goldin, a former head of NASA, has been scathing of such schemes, calling them "gimmicks to overcome the unbelievable lack of technology that they have". But NASA has begun to loosen its grip on space; it recently announced the Centennial Challenges programme. Having noted that, with its $10 million purse, the X Prize has generated at least $50 million of research and development, it will offer between $250,000 (€200,000) and $30 million (€24 million) for a variety of commercial firsts, such as a soft lunar landing and bringing back part of an asteroid.

Having been the preserve of a handful of governments since the 1950s, space travel might increasingly fall into the hands of entrepreneurs. Several of them are billionaires of the Internet age who have watched in frustration as the space race slowed after the end of the cold war. Paul Allen, the co-founder of Microsoft, invested $20 million (€16 million) in SpaceShipOne. Elon Musk sold PayPal to eBay for $1.5 billion (€1.2 billion) before setting up SpaceX, a rocket-ship company. John Carmack, head of Armadillo Aerospace, designed the computer games Doom and Quake.

The Canadian entry, the da Vinci Project, is bankrolled by an Internet gambling website with its eye on extraterrestrial poker; it is seen as the next team most likely to get into space, by launching a craft from high-altitude balloon later this month.

Branson last week announced that, in partnership with the company behind SpaceShipOne, he plans a fleet of spacecraft to begin trips by 2007. When he registered his company's name, Virgin Galactic Airways, a few years ago, it looked more like a publicity stunt than a bold business move. But now he's talking about leading an industry that might make thousands of civilians astronauts over the next decade.

Initial trips are expected to cost about €170,000; you'll need three days' training before taking a flight that will last three hours and give you a view of Earth from 100 kilometres up for only four minutes. For nervous travellers, it's worth noting that there will be no onboard toilet.

For the moment, though, the trick remains getting up there in the first place. Some people warn that a couple of disasters might send the fledgling space-tourism industry crashing back to Earth. Space travel is a risky endeavour. NASA originally believed that the risk of a space shuttle break-up was about one in 1,000, but two disasters in 112 flights proved the odds to be far shorter. Of the five space shuttles put into service, two ended up in flaming pieces.

A British rocket engineer called Alan Bond recently commented that the entrepreneurial rush to space could prove self-destructive. "When these people do kill themselves, which they surely will, in large numbers," he said, "the companies like mine, which look to governments to support them, we'll suffer." Some have even expressed doubt about whether, given the high cost and high risk, there will be a market for space tourism. Yet a steady stream of tourists now pass the corpses strewn along the slopes of Everest, suggesting that people will want the challenge and experience regardless of the danger.

Space Adventures is among a handful of companies taking advanced bookings; at $100,000 (€80,000) for a trip that might not happen for year, it already has more than 100 reservations.

For the moment space remains a rich man's destination. Dennis Tito and Mark Shuttleworth each paid $20 million (€16 million) to be the first space tourists, and Greg Olsen, a multimillionaire from New Jersey, will have to fork out a similar amount if he is to spend a planned few days on the International Space Station in April next year.

Branson and his competitors hope, however, to drive the price down to within the reach of many more passengers. "You could charge someone €100,000, maybe more," Rutan told the New Yorker magazine. "To get rid of the rich guys, service the rich guys. Theoretically, I could do it next year. But I don't call that space tourism. Space tourism is when you get more seats, and you can do it at €30,000 or €50,000. And then the next generation would be €10,000 or €12,000."

From there, he believes, the final frontier won't be so intimidating. "I really think I can go to the moon now. There's a whole bunch of people with new dreams. And I think they're valid now."

Where next?

2004 First private suborbital space flight.

2008 First private spacecraft reaches orbit.

2020 Twelve thousand tourists a year at $50,000 (€40,000) a trip.

2026 First space hotel opens.

2050 First hotel on the moon.