The global tourism industry is vast, complex and critical to many local and national economies. Until recently, it represented a tenth of global employment and 7% of global exports. A mix of supply and demand side megatrends were already challenging the industry’s linear growth model when the Covid-19 crisis came in with a lethal blow to the status quo. When borders and airspaces closed globally, the music stopped for all tourism actors, everywhere.
Although Covid-19 threatens lives and established socio-economic constructs, it also presents a rare opportunity to re-think the socio-economic “software”. A shift to a sustainable circular economy is this major software update we urgently need.
So far, the circular economy discourse has mainly focused on tangible product manufacturing but less on 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 – from agriculture to food, built environment and transport industries to name some.
In our recently published white paper, Circular economy in travel and tourism, we explore how circular economy principles could guide a more sustainable, resilient and future-proof travel and tourism industry development.
The tourism ecosystem comprises multiple sectors and actors, each exhibiting key differences in type and intensity of asset and material use – from asset light to asset heavy – level of servitization, type of customer engagement etc. 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 enabling initiatives to extend and optimise material and asset use and avoid waste. For asset light businesses, market positioning and differentiation through a circular, collaborative and purpose driven business propositions with the aim to deliver a positive impact for all stakeholders can be a powerful circular transformation lever.
Having made the case that a circular economy can provide a path to a long term sustainable, resilient and profitable future for the tourism industry and its stakeholders, we must next ask how to get there?
Multiple initiatives are needed for a circular transformation in the tourism industry to happen at scale; Education about the circular economy as a profitable, fair, optimised and holistic socio-economic model, supported by investment in research to demonstrate financial, environmental and social benefits of circular tourism pathways. And importantly, strong public-private tourism stakeholder collaboration and cross-industry coalitions to explore innovative circular transition pathways, which help integrate sustainable and circular tourism as core economic development levers in regional and national policy making.
All tourism actors, and private operators in particular, need to embrace concepts such as “value co-creation”, “destination carrying capacity”, “whole system optimisation” and “purpose led operations”. Instead of approaching destinations as commodities that can be consumed, we must treat them as natural and social assets that must be optimised for the long-term viability of all tourism stakeholders. The events and destination marketing sectors offer encouraging examples, with innovative actors increasingly positioning themselves through a more regenerative, purpose-dominated framing. As a case in point, Amsterdam, well known for its over-tourism challenges, is taking a systemic “rebuild smarter” approach to their economic recovery by integrating tourism activities based on the doughnut economics development framework.
The need for a new positive tourism paradigm, regenerative of natural and social capital is pressing. The circular economy offers a compelling paradigm and tools to guide an innovative, resilient and sustainable tourism industry development. Tourism is dead, long live circular tourism.