Circular Economy in Travel and Tourism – a conceptual framework for a sustainable, resilient and future proof industry transition

Circular Economy in Travel and Tourism – a conceptual framework for a sustainable, resilient and future proof industry transition

Transforming Vision Into Action - Guidelines and Tools

16 December 2020


The global tourism industry is facing an unprecedented crisis. Whilst private actors and policy makers are understandably focusing on how soon and how to safely re-open destinations and visitor flows, the crisis also presents tourism actors a unique opportunity to pause, reflect and imagine the short, mid and long-term future of travel and tourism.

When the COVID-19 crisis hit with a lethal blow to the status quo, a mix of supply and demand side megatrends, such as digitalisation, overtourism, GHG emissions, environmental and social impacts, customer and regulatory accountability demands, were increasingly raising questions about the industry’s linear growth-based model.

While the COVID-19 pandemic is challenging long established economic constructs, it also presents a rare opportunity to change the economic ‘software’. A shift to a sustainable Circular Economy represents this major software update we urgently need.

So far, the Circular Economy discourse has predominantly focused on production industries. However, this focus on tangible product manufacturing underestimates service dominated industries, such as travel and tourism, and their role in the global Circular Economy transition.

The tourism industry is deeply interlinked with and dependent on multiple key resource flows, asset and commodity value chains in society – from agriculture to food, to the built environment and transport industries to name a few. Travel and tourism actors can act as powerful enablers of circularity and benefit from shared circular value creation and value capture within relevant value chains.

To build back better, a new thinking, a new framing of tourism activities is needed. All tourism sectors should question the purpose of their operations and the natural, social, economic impacts of their business models. The white paper, Circular Economy in Travel and Tourism, explores how Circular Economy principles could guide a more sustainable, resilient and future-proof tourism development in line with the UNWTO One Planet Vision.

Each tourism industry sectors and actors exhibit differences in type and intensity of asset and material use (from asset light to asset heavy), level of servitization, type of customer engagement etc. and thus type of circularity and circular business model potential and levers. Consequently, Circular Economy transformation pathways will differ between sectors and market contexts.

For asset heavy businesses, circular procurement is a key lever for enabling circularity in the upstream supply chain, powering initiatives that extend and optimise material and asset use and avoid waste.

For asset light businesses, delivering non-tangible services, market positioning and differentiation through circular, collaborative and purpose driven business propositions with the aim to deliver a positive impact for all stakeholders would likely be a powerful circular transformation lever.

Multiple initiatives are needed for the tourism industry circular transformation to happen at scale. Education and awareness building about the Circular Economy as a profitable, fair, optimised and holistic economic model applicable to all tourism actors at the macro, meso and micro levels is essential. Investment in research to demonstrate the financial, environmental and social benefits of a circular, regenerative by intent tourism ecosystem is necessary. And, very importantly, more public-private tourism stakeholder collaborations and cross-industry coalitions to explore innovative circular business models and transition pathways in a manner that sustainably integrates tourism as core economic development lever in regional and national policy making and circular economy strategies.

All tourism actors need to learn and embrace concepts such as ‘deep cooperation’, ‘value co-creation’, ‘destination carrying capacity’, ‘system optimisation (instead of commercial silos maximisation)’, ‘purpose driven operations’. The framing of destinations needs to evolve from a ‘commodity’ that can be consumed, exploited to that of an ‘asset’ made of natural and social stocks that should be protected and optimised for the long term benefit of all actors. 

The need for a new positive tourism paradigm regenerative of natural and social capital is pressing. The Circular Economy offers a compelling new paradigm and a set of tools to guide an innovative, balanced, resilient tourism industry recovery and sustainable future.

This article for Transforming One Planet Vision into Action has been brought to you by the CE360 Alliance, a network of qualified consulting professionals who have a vast mix of skillsets and industry backgrounds, combined with post-graduate business training in Circular Economy and Innovation. The network’s members work with private and public organisations on Circular Economy research and implementation, offering contextual and evidence based Circular Economy business solutions. See CE360 Alliance website | Circular Economy in Travel and Tourism