IMPLICATION OF CIRCULAR ECONOMY IN THE TOURISM INDUSTRY - Du lịch tuần hoàn

TRƯỜNG ĐẠI HỌC KHOA HỌC XÃ HỘI VÀ NHÂN VĂN
KHOA DU LỊCH HỌC

IMPLICATION OF CIRCULAR ECONOMY IN THE TOURISM
INDUSTRY

Họ và tên : Nguyễn Ngọc Thiện
Lớp : K65 Quản trị Khách sạn
Mã sinh viên : 20031551
Giáo viên hướng dẫn : TS Bùi Nhật Quỳnh

Hà Nội - 2022


Table of content
CHAPTER 1: INTRODUCTION ................................................................................................... 1
1.1 Reason for writing ..................................................................................................................... 1
1.1.1 Practical reason ................................................................................................................. 1
1.1.2 Theoretical reason ............................................................................................................. 1
1.2 Objectives and mission of the study ....................................................................................... 2
1.3 Subject and range of the study ................................................................................................ 2
1.4 Research methods ...................................................................................................................... 2
1.5 The study contribution.............................................................................................................. 3
1.6 Structure of the study ................................................................................................................ 3
CHAPTER 2: LITERATURE REVIEW ..................................................................................... 3
2.1. Tourism and sustainability ..................................................................................................... 3
2.1.1 Definition ............................................................................................................................. 3
2.1.2 Energy use and emission .................................................................................................. 5
2.1.3 Waste production ............................................................................................................... 6
2.1.4 Water usage......................................................................................................................... 7
2.2 Circular economy (CE) ............................................................................................................. 8

2.2.1 Definition of CE.................................................................................................................. 8
2.2.2 Principles of CE................................................................................................................. 10
2.2.3 Flow of material in CE ..................................................................................................... 10
2.2.4 Similarities and difference between sustainability and CE ...................................... 11
2.3 CE implementation ................................................................................................................... 12
2.3.1 Business models ................................................................................................................. 13
2.3.2 Climate crisis and material shortage ............................................................................ 14
2.3.3 Social and economic benefit ............................................................................................ 14
2.3.4 Drivers and barriers of CE ............................................................................................. 15
CHAPTER 3: CE IMPLEMENTATION IN TOURISM ........................................................ 16
3.1 Tourism and CE ........................................................................................................................ 16


3.1.1 Necessity of CE in tourism..........................................................................................17
3.1.2 Transition to circular tourism ....................................................................................19
3.1.3 Tourism value chain ...................................................................................................22
3.1.4 Challenges of implementing CE in tourism ...............................................................23
3.2 Circular tourism in Vietnam ..............................................................................................26
3.2.1 The current situation in Vietnam...............................................................................27
3.2.2 Vietnam aims to circular tourism ..............................................................................28
3.2.3 Challenges of implementing CE in Vietnam tourism.................................................32
CHAPTER 4: DISCUSSIONS AND SOLUTIONS .............................................................................33
4.1 Discussions.........................................................................................................................33
4.2 Solutions ............................................................................................................................37
CHAPTER 5: CONCLUSION .........................................................................................................39
References .................................................................................................................................40


IMPLICATION OF CIRCULAR ECONOMY IN THE TOURISM
INDUSTRY

CHAPTER 1: INTRODUCTION
1.1 Reason for writing
1.1.1 Practical reason
Tourists are irresponsible. They go along, in their “march of stupidity”, without any
notion of accountability for their large, ruinous footprints: the mark of their ignorance
and disregard. Tourism has been referred to as an ugly business, one with corrosive
tendencies. “[They] are an army of fools, wearing bright polyesters, riding camels,
taking pictures of each other, haggard, dysenteric, thirsty” (DeLillo, 2011). Because of
this tourism has been referred to as an ugly business, one with corrosive tendencies.
Growing up, I’ve never realized the importance of preserving the environment. When I
was little my family often take the summer vacation in Cửa Lò – one of the busiest
beaches in Vietnam, in the back of my memories the beach is always so dreamy and
beautiful but in my latest visit to the beach I was disappointed that Cửa Lò is no longer
what I remember. Everywhere I see along the shore is people walking on sand mix
with trash, the sea is so dirty that you can’t even see your feet just 10cm deep in the
water. All the vendors and restaurants near the sea keep pouring their waste outside
next to the beach making mountains of garbage piling up until the tidal just washes
everything away to the sea. Shock and disappointed in the current situation of my
fondest beach, I’ve decided to write this essay in how circular economy can change
tourism in a better and more efficient way and we as individual can change so we can
save what nature have given us.
1.1.2 Theoretical reason
Humanity is living beyond the availability of resources from the planet earth. We have
been extensively using finite resources, the emission of greenhouse gases is upward,
and the earth continues to heat up. (PACE 2021, 12.) If we continue to consume the
natural resources in the current linear model, by 2050, we will need three planets to
sustain our lifestyle (United Nations 2021). Countries worldwide keep on signing the
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climate agreement, but greenhouse gas emissions keep rising, and the earth keeps on
heating at an alarming rate (Council on foreign relation 2021). It now looks clear that
the national climate promises were never powerful enough to keep the earth below the
2-degree goal; with every year of slow progress, the challenge is growing. Global
carbon emission was recorded high in 2018, and despite the lockdown lifestyle due to
the global Covid pandemic, we are still far off the track. (PACE 2020, 12.) Our current
response to fight the climate crisis is insufficient.
"More than 91 percent of what we take from the earth is wasted" (Circle Economy
2021). Its has been clear to each one of us that the linear model is not working in the
long tearm and circular is the way if we want to continue living on this planet. "To
keep our world liveable and thriving, we need to double global circularity from 8.6 to
17 percent" (Circularity Gap 2021). And this is why I want to write this paper in order
to educate not only myself but others on how to preserve and improve the planet by
changing the way we think and act.
1.2 Objectives and mission of the study
The objective of this study is to explore the potential of tourism sector to become circular
and how we can use circular economy to rebuild what have broken. Thus, the study aims to
answer a few questions as follows:
Q1: What is circular economy?
Q2: How can the tourism sector transition towards a circular economy?
Q3: What are the main factors driving circularity in the tourism sector?
Q4: What are the main obstacles in achieving circularity in the tourism sector?
Q5: How can we implement circular tourism into Vietnam?
1.3 Subject and range of the study
Subject: Circular economy, sustainable tourism, circular tourism, Vietnam tourism
Location Range: The University of Social Science and Humanities, internet, books.
Time range: from November to December of 2022
1.4 Research methods

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Data collection: Most of the information in this study was based on documents and books
found on the internet that have been thoroughly select and research on.
Self-based: Lacks of research have been conducted in Vietnam, so a lot of information was
by myself translating added by personal opinion.
SWOT: A SWOT analysis about Vietnam tourism was created to help evaluate and
develop this study.
1.5 The study contribution
Provide an extend knowledge on this newly created subject, help educate myself and other.
Give an inside view on how CE can be implemented in Vietnam tourism.
1.6 Structure of the study
This study has been illustrated into 5 chapters.
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Chapter 1: Introduction – Presents the motivation, methodology, background of the
research and its purpose.

-

Chapter 2: Literature Review = gives the theoretical background of the thesis work and
case overview.

-

Chapter 3: CE implementation in tourism – Presents how we can implement what we
have learn in chapter 2 to change the way of tourism in general and tourism in Vietnam

-

Chapter 4: Discussion and Implications – Answering all the questions that has been
layout and discuss about all the findings in the previous chapters.

-

Chapter 5: Conclusion – The study is summarized.

CHAPTER 2: LITERATURE REVIEW
2.1 Tourism and sustainability
2.1.1 Definition
- Tourism refers to the act of traveling for business or leisure purposes to a location
away from your hometown or usual area. As a tourist, you visit a location that's away
from your normal area. The World Tourism Organization (WTO) specifically defined
tourism as “the practice of staying outside your usual environment for one year or
less if it's for leisure purposes or 24 hours or less if it's for business purposes.”

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- According to UNWTO (2021), sustainable tourism development is defined as
"Tourism that takes full account of its current and future economic, social and
environmental impacts, addressing the needs of visitors, the industry, the
environment, and host communities”. For tourism development to be sustainable, it
needs to find the balance among the different sustainability dimensions, environmental,
economic, and sociocultural.
- According to UNEP and WTO (2005), a sustainable tourism should have the
following objectives:
+ Economic viability - ensuring economic viability and competitiveness of tourism
destinations and enterprises for long term by understanding the market, delivering visitor
satisfaction, maintaining good trading conditions, projecting an attractive destination and

delivering business support.
+ Local prosperity - maximizing the contribution of tourism to the economic prosperity of
the host destination by supporting local business, encouraging local employment and
supplies, encouraging clusters and networking of businesses, 23 increasing levels of visitor
spending (increasing length of stay, promoting local products) etc.
+ Employment quality - increasing the number of local jobs created by tourism and
improving the quality (wage, service, availability without discrimination), ensuring and
enforcing labor regulations, encouraging training programs, etc.
+ Social equity - ensuring widespread and fair distribution of economic and social benefits
from tourism throughout the recipient community by developing opportunities for
disadvantaged people, supporting social programs, etc.
+ Visitor fulfillment - providing safe, satisfactory and fulfilling experience to all visitors
without discrimination, monitoring and addressing their satisfaction and quality of
experience.
+ Local control - engaging and empowering local communities in planning and decision
making about the management and future development of tourism in their area by
strengthening the capabilities of local governing bodies, raising public awareness, respecting
the beliefs and traditions of indigenous tribes, etc.
+ Community wellbeing - maintaining and strengthening the quality of life in communities
by reducing congestion, managing demand, careful planning of tourism infrastructures,
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promoting mutual use of facilities and services by residents and tourists, influencing the
behavior of tourists towards local communities, etc.
+ Cultural richness - respecting and enhancing the historic heritage, authentic culture,
traditions and distinctiveness of host communities by developing interpretative programs,
capacity building, informing tourists about local culture, etc.
+ Physical integrity - maintaining and enhancing the quality of landscapes, avoiding or
minimizing the physical and visual degradation of the environment by visitor management,

development of codes and conduct, etc.
+ Biological diversity - supporting the conservation of natural areas, habitats and wildlife
and minimizing damage, promoting ecotourism, raising visitor awareness, etc.
+ Resource efficiency - minimizing use of scarce and non-renewable resources in the
development and operation of tourism facilities and services, minimizing water
consumption, promoting reduce, reuse and recycle mentality, etc.
+ Environmental purity- minimizing the pollution of air, water and land, and generation of
waste by tourism enterprises and visitors by promoting use of 24 sustainable transport,
reducing use of harmful chemicals, influencing development of new tourism facilities, etc.

2.1.2 Energy use and emission
- Before the COVID pandemic, tourism accounts for 8% of global greenhouse gas
emissions. Due to the falling air travel prices and the growth of the middle class, the
number of tourists was growing at 3-5% every year. (Carbon brief 2018.) Travel and
tourism account for almost one-tenth of the total greenhouse gases emission. The ratio
of carbon emitted per dollar in tourism spending is around 1kg, which is relatively
higher than the manufacturing (0.8) and construction (0.7) industries. (Sorin & Stefan
2021, 21.)

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Emission from tourism
7
21

40

32

Aviation

Cars

Accommodation

Others

Figure 1. Share of Co2 emission from tourism (UNWTO & UNEP 2008, 34)

- UNWTO and UNEP published their report related to climate change and tourism in
2008 that has contributed widely to the research in this area. Tourism industry carbon
emissions are of 2 types. 1) Carbon emission from direct energy consumption. 2)
Carbon emission from consuming products from tourism-related industries. (UNWTO
& UNEP 2008, 34.)
2.1.3 Waste production
- Food waste is an enormous problem. Each year, a third of all food produced is lost or
wasted. This equals 1.3 billion tons.
- Food waste is responsible for an astonishing 8% of global carbon emissions: think of
all the water, energy and other resources used to produce, transport, process and sell
food, as well as emissions and other by-products generated in the process. When food is
wasted, these negative impacts on the environment are all for nothing and getting rid of
unused food further affects our ecosystems and sanitary landfills.
- Increasing numbers of tourists will generate more solid waste, putting pressure on
waste management systems in local communities. Waste management will be one of the
biggest challenges of sustainable development in the future. Hotels and restaurants

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provide a significant amount of biomass waste, and as a result, more than 70 % of all
waste is biomass. (Nedyalkova 2019, 6.)
- According to FAO (2019,120) the research on food waste has been going on for 40
years. The issue of food waste in tourism has been on the discussion in the media
frequently to raise consumer awareness but the academic attention in tourism-related
food waste has been very insufficient. Most research on food waste is published under
environment management and sustainability, but the research on food waste conducted
under hospitality is rare. The lack of academic works regarding food waste represents
that the academic community is unaware of the scale of hospitality and its severe
negative impacts. (Filmonau & Coteau 2018, 235.)
- All-inclusive hotels have food service as a major part of their services. Due to their
business model, these hotels offer their guests all-you-can-eat buffets with a wide range
of food and room services. A similar thing happens with the breakfast buffets, where the
quantity of food represents the perception of the hotel. (IDB 2020, 22.) There is a
massive gap in how tourism food waste is understood and calculated
- Another common issue is overproduction, fueled by the unpredictability of demand
and the desire of the hotel industry to promote a sense of abundance for customers when
it comes to food. A study of 450 hotel companies (restaurants, hotels, catering
companies, and others) in 25 countries found that between 8 and 20% of the total food
cost is due to overproduction, cooking mistakes, damaged products and leftovers on
plates. Often, food waste can match or surpass the net profits of a business, which
should be addressed by those who are trying to maximize the operating results.
- Even though the problem of food waste in the hospitality industry has been
recognized, there is insufficient data on the scale of food waste. This problem is
exceptionally high in developed countries, but the European Union does not have a
standard to measure food waste. (Filmonau & Coteau 2018, 236.)
2.1.4 Water usage
- Hotels and resorts are prone to direct water use. Water is used for showers, toilets, the
kitchens, laundry, swimming pools, cooling, and irrigation. The average water
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consumption rates for hotels and resorts account for 84-2,000 liters per tourists
per day, and as much as 3,423 liters per bedroom per day. Two of the factors that need
a lot of water are irrigated gardens and swimming pools. Even regional location affects
how much water an establishment uses, with rural areas having a high demand for water
than urban areas, with high-rise hotels and campsites consuming less water than fivestar hotels (especially ones with golf courses).
- It is becoming increasingly recognized that tourism consumes significant amounts of
water on a local, regional, and global scale. As a result, tourism is facing the challenge
of efficiently using water resources. The world's direct water footprint of tourism
amounted to 1km3 kilometers of freshwater. (Gössling 2015, 233-234.)
Water use category – Direct

Litter (L) per tourist/a day

Accommodation

84 - 2000

Activities

10 - 30

Water use category - Indirect

Litter (L) per tourist/a day

Infrastructure

N.A

Fossil fuels

750 (Per 1000km by air/car)

Biofuels

2500 (Per 1L)

Food

2000 - 5000

Total

Estimated range: 2000 - 7500

Figure 2. Water used categories and estimated use per tourist per day (Gössling & al. 2012,7)

- Increasing tourism and the trend toward higher-standard accommodations will
increase water pressure in many destinations, especially those already facing water
security threats. (Gössling 2015, 235- 243.)
2.2 Circular economy (CE)
2.2.1 Definition of CE
- The idea of Circular Economy has received increasing attention within recent years,
but the concept is not new. The origin of the concept has been widely discussed, and it
cannot be linked to one single date or author, as there are many authors who have
written about it. Several schools of thought have analysed, developed and described
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industrial systems with such features using different terminology and approaches.
Circular Economy as a new economic model has its origins in Environmental
Economics, whose aim is the integration of science into sustainability and sustainable
development
- The origin of the CE term dates back to the 1920s, through different perspectives and
schools of thought. Leontief [9] introduces the concept in his research ‘The Economy as
a circular flow’, Von Bertalanffy [10] developed in 1937 the first breakthrough of ‘The
general system theory’ and Lyle [11] promoted recovery and systems regeneration
(materials and energy) through regenerative design.
- The European Union parliament defines CE as "a production and consumption model
that involves reusing, repairing, refurbishing, and recycling existing materials and
products to keep materials within the economy. It implies that waste becomes a
resource, consequently minimizing the actual amount of waste. The circular model is
generally the antithesis of a traditional, linear economic model, which is based on a
'take-makeconsume-throw away' pattern" (European Parliament 2021, 1)
- In addition, an analysis of 114 9 definitions of CE by Julian Kirchherr and others
found out that the concept is mostly perceived as reduce, reuse and recycling strategies
(Kirchherr, Reike, and Hekkert 2017). They have defined the CE as:
A CE describes an economic system that is based on business models which replace
the ‘end-of-life’ concept with reducing, alternatively reusing, recycling and
recovering materials in production/distribution and consumption processes, thus
operating at the micro level (products, companies, consumers), meso level
(ecoindustrial parks) and macro level (city, region, nation and beyond), with the aim
to accomplish sustainable development, which implies creating environmental
quality, economic prosperity and social equity, to the benefit of current and future
generations (Kirchherr, Reike, and Hekkert 2017, p. 224-225)
- This definition given by Kirchherr, Reike, and Hekkert (2017) will serve as a basis for
understanding CE in this study since it is more elaborated than the others and mentions
the micro, meso and macro levels, which are equally important in the tourism sector.

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2.2.2 Principles of CE
- According to Ellen MacArthur Foundation (2021) the CE is based on three core
principles and are all driven by design:
+ Design out waste and pollution: In a new innovative way of designing, waste does not
exist. We can ensure that the waste and pollution are not created in the first place by
changing our mindset to view waste as a design flaw and harnessing technologies and new
materials.
+ Circulate products and materials: We can design products that can be reused, repaired,
and remanufactured. Making things that can last forever is 10 not the only part of the
solution; we have to be able to get used products as a resource and put it back into the system
and not throw it in the landfill.
+ Regenerative nature: There is no such concept as waste in nature. Everything is cyclical
and works in a close loop without any loss. We can enhance the natural resources by
returning the nutrients to the soil and other systems. (Ellen MacArthur Foundation 2021.)

- Moreover, the concept of the CE that was primarily build in 3Rs model (reduce,
reuse, recycle) is expanded to 12 Rs: reduce, reuse, recycle/reclaim, repair,
refurbish/recondition, repurpose, redesign, remanufacture, research and development
of process and technological innovation, reskilled people, reverse supply chain
management and re-industrial green revolution (Charter 2019, 66).
2.2.3 Flow of material in CE

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Figure 3. The CE diagram (UNIDO 2018, 3)

- Figure 3 above is a simple circular economic diagram that illustrates the design for the
circularity of raw materials in the CE. The materials used to create new products are
derived from old ones and are designed to be durable, reusable, and recyclable. 11
Everything is used as much as possible, remanufactured, recycled, and sent back as new
raw material. The entire circle is carried out through cleaner production (UNIDO 2018,
3.)

Figure 4. The butterfly diagram (Ellen MacArthur Foundation 2013, 24)

- Figure 4 above is widely known as a butterfly diagram. It is a powerful diagram that
presents a holistic view and helps us understand the CE's workflow in practice. The
diagram presents the difference between the technical and biological cycles. As part of
biological cycles, food or materials derived from the natural world (such as cotton or
wood) can be cycled back into the system through composting or anaerobic digestion.
Technical cycles involve reusing, repairing, remanufacturing, and recycling products,
components, and materials
2.4 Similarities and difference between sustainability and CE
- Both sustainability and CE carries the notion to emphasize intra- and intergenerational
commitments motivated by the degradation of the environment and give the importance
of private and public deliberation on the multiple pathways for development. Both share
a global perspective, view problems on the planetary scale, and current multi or
11


interdisciplinary approaches where innovation and design are the main drivers. Co- 13
operation between the stakeholders and the importance of diversification to take
advantage of the value creation is applied to both concepts. (Geissdoerfer & Savaget,
Bocken & Hultink 2016, 762-763.)
- However, we can also find differences between these concepts in literature reviews.
The idea of CE has been developed recently in comparison with sustainability. The

tracing of the involvement of CE goes back to many schools of thought, such as cradle
to cradle and industrial ecology. However, after the Brundtland report, sustainability
was considered older and institutionalized by environmental movements. The CE aims
to create a closed loop and create no waste and leakages; the sustainability is openended, and the multitude of goals changes depending upon the interest. The purpose
behind sustainability is diverse and often depends on the context, but a CE aims to use
the resources better and reduce waste and emissions. (Geissdoerfer & al.2016, 763.)
- Researchers who did analyse this issue in the past seem to agree that sustainability is
more complex and open concept without well-defined stakeholders, whereas circular
economy is a more direct approach focusing mainly on environmental factors and
identifying business and policymakers as main stakeholders (Sauvé et. al., 2016.,
Geissdoerfer et. al., 2017). Sauvé et. al. (2016) argues that this is exactly why the
circular economy is gaining attention, since it provides a clearer and more tangible
solution to the more and more threatening environmental challenges. Still, the circular
economy can be seen as a step towards sustainability, since it reduces our dependence
on raw materials and non-renewable resources, therefore improves both the current and
the future generation’s ability to meet their needs, which is the basic definition of
sustainability (Sauvé et. al., 2016).
2.3 CE implementation
Adopting CE is the key step towards the climate targets and achieving zero-carbon
prosperity. The transition to the CE moves us beyond minimizing our emission from our
current extractive linear economic system (Ellen Macarthur Foundation 2019, 12.) After
relying upon our economic pattern has for many years relied on fossil-based, unsustainable,
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and waste generation systems, a growing number of scientists, environmentalists, politicians,
and experts from different fields calling for the extreme need for an urgent shift to other kinds
of environmentally friendly economic model as well as deal with economic and societal
issues on a global scale
2.3.1 Business models

- There is a range of different understanding of circular business models reflected on
many diverse ranges of definition. Geissdoerfer, Pieroni, Pigosso and Soufani (2019, 7)
defined circular business models as "business models that are cycling, extending,
intensifying, and dematerializing material and energy loops to reduce the resource
inputs into and the waste and emission leakage out of an organizational system."
- The CE requires a radical rethinking of business and investment models and new
approaches. Traditional models that focus only on revenue generation need to be
replaced with a new mindset of added value and less consumption. (Charter 2019, 165.)
However, it is not easy for companies to shift their deep-rooted linear economic system
to circular; that is why the companies seeking circular advantage need to develop a
business model based on circular thinking. (Accenture 2014, 12.) A transformation to
the CE economy model will not be easy in every aspect. However, the businesses that
can change will outperform other companies from the market. The shift to the CE
economy will add value to the economy. (SITRA 2019.)
Accenture (2014, 12) analyzed more than 120 companies' case studies that applied
innovative ways to generate productivity improvements and summarised five
underlying business models in figure 4.

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Figure 5. Circular economy business models (Source:Accenture (2014, 2019))

2.3.2 Climate crisis and material shortage
- A CE gives us an opportunity for a systematic response by reducing the emission and
increasing the resilience to the effect of climate crisis. (Ellen Macarthur Foundation
2019, 12.) It plays a substantial role in reversing the biodiversity loss by reducing the
area of land to produce resources, using renewable sources, reducing the greenhouse
gases emission, reducing pollution, and designing the waste to be reused again (Ellen
Macarthur Foundation 2021, 17).

- Shift to renewable energy sources will reduce 55% of greenhouse gas emissions.
However, the remaining 45% emissions are harder to reduce because they arise from
the management of land and buildings and manufacturing goods, food packaging, and
things we use in our everyday lives. Therefore, transformation is required in the way
that the goods are produced. Failing to make such a transformation will make the
climate targets unachievable. (Ellen Macarthur Foundation 2019, 12.).
2.3.3 Social and economic benefit
- In the current fast scale consumer goods industry, about 80 percent of the 3.2 trillion
worth of materials every year is not recovered. The CE views resources as valuable
sticks to be used again, not as materials that once flow through the economic cycle (MC
Kinsey 2014.) The research shows that the transition to a CE can make up to 5 trillion
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dollars in economic benefits by 2030 (WEF 2020). The CE creates an economic
opportunity through material savings, supply risk mitigation, innovation, job creation,
improved productivity, 15 and long-term resilience (WEF 2014, 18). The European
Union pointed out that the closed-loop activities such as repair, reuse, or recycling
generated 147 billion in added value in 2016, and four million employees were added in
the CE sector (CIRTOINNO 2019, 8).
2.3.4 Drivers and barriers of CE
- The enablers of CE can be categorized into the following types:
+ Cultural enablers such as leadership, sustainability/environmental drivers, stimulate
demand, value chain engagement, long term relationships and partnerships, systems thinking
+ Regulatory enablers such as policy support and public procurement, regulatory reform,
fiscal support, producer responsibility
+ Financial enablers such as whole life costing
+ Sectoral enablers such as clearer vision for CE in the built environment, better evidence
base, collaboration and design tools and strategies, research and development (R&D),
innovation, standards and assurance schemes, reverse logistic infrastructure (Hart et al.

2019).

- Besides, a survey in UK construction industry by Adams et al. (2017) found out that
the most important enablers for implementing CE in buildings and construction are:
+ design tools and guidance
+ measuring the value of material/product
+ financial incentives to use secondary materials
+ best practice case studies
+ assurance schemes for reused/secondary materials
+ awareness raising campaign
+ development of enabling technologies to recover materials
+ development of higher value secondary materials, viable take-back schemes and clear
business case (Adams et al. 2017)

- As mentioned in the above section, a CE has many benefits, but at the same time,
practical implementation can have numerous barriers
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- Circular economy is something that is based on cooperation and is not possible
without exploring how different industries or actors within an industry can work
together to reduce waste or design new business and production models. This requires
much more communication, then the traditional way of business and even some specific
expertise, which might not be present at the moment in tourism. As Mireille Jakobsen,
the sustainability manager of the BC Hotel Group put it:
“Actually, we really want to go [towards circular economy] and we’ve been trying
for many years, but the problem is again, when you think about the circular
economy we have to work with partners to help you on the journey (Mireille
Jakobsen, 13.03.2019).”
- Besides being interested in the concept, she highlights the challenges of circular

economy as well, since even for a company that is engaged in sustainability and the CE,
it is impossible to do it alone. Irrelevant of which approach of circular economy we talk
about, it is essential for the right partners to find each other and work together.
- The barriers of CE can be categorized into four types:
+ Cultural barriers such as lack of interest, knowledge/skills and engagement throughout
the value chain, lack of collaboration between businesses, lack of collaboration between
business functions.
+ Regulatory barriers such as lack of consistent regulatory framework, obstructing laws
and regulations, lack of incentives.
+ Financial barriers such as high upfront investment costs, low virgin material prices, poor
business case and unconvincing case studies, limited funding
+ Sectoral barriers such as lack of bandwidth compounded by an absence of coherent
vision for the industry, complexity/confused incentives, long product lifecycles, technical
challenges regarding material recovery, lacking standardization, insufficient use or
development of CE-focused design and collaboration tools, information and metrices (Hart
et al. 2019).

CHAPTER 3: CE IMPLEMENTATION IN TOURISM
3.1 Tourism and CE

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- Tourism accommodations consume huge amount of non-renewable resources
affecting the biodiversity and community (Girard and Nocca 2017). Thus, it is essential
to change the consumption pattern in this industry and move towards a CE. Girad and
Nocca (2017, 68) define circular tourism as “a model able to create a virtuous circle
producing goods and services without wasting the limited resources of the planet that
are the raw materials, water, and energy.”

Figure 6. Circular tourism (Circular city funding guide 2021)

- Figure 6 above shows a basic model to help tourism by thinking circularity. The entire
tourism process can be circular from the pre-travel phase through the stay and afterward.
We will discuss the tourism value chain more in detail in the coming sections. The
tourism industry has a substantial role to play in the transformation of the current linear
economic model due to the multiplier effect that highlights its significant impact on the
entire economy and its capability to encourage the flow of circularity in its value chain
(VargasSanchez 2018, 2).
3.1.1 Necessity of CE in tourism
- There have been attempts to transform tourism into more sustainable development at
all levels for more than two decades, but most of them have not succeeded (UNECE
2021, 7). Tourism sector is operating on a linear take-make-dispose model, relying on
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large quantities of resources while generating vast amounts of greenhouse gases and
waste (UNIDO 2018, 15.) UNWTO (2017, 96) acknowledges that “approaches such as
the CE promoting business models based on renewable resources, longer and diverse
product life cycles, shared consumption and interconnected value chains can play a
significant role when designing and improving resource management systems not only
in the tourism sector, but also for the sustainable development of destinations.”
- “By applying the principles of a CE, hospitality and tourism companies can accelerate
their own business and move forward in our thinking and action to create a more
sustainable experience for all stakeholders involved in the hospitality and tourism
industry” (Rheede 2012, 1). The implementation of CE principles in tourism will help
the industry achieve more meaningful sustainability goals and increase profitability in
different tourism sectors such as hotel, food and beverage, and leisure. The flow of
materials concerning the construction, energy, food, water, etc. are closely monitored
using CE models that help the destination that helps to reduce the consumption of

natural resources, decrease waste, and cut down CO2 emissions. (Floriodo, Jacob &
Payers 2019, 5.)
- As one of the biggest growing economies, tourism has a huge potential to transform
itself into a circular business model. Application of CE in the tourism sector through the
CE processes can reduce the economic leakages in the tourism value chain and reduce
its impact on climate change and waste generation. It is an opportunity for the tourism
sector to integrate the CE that promotes innovation and creates sustainable businesses
adding green jobs value to the local economic development. (Kurtagic 2021, 17.)
- Integration of the CE in tourism gives enormous opportunities for tourism to achieve
sustainability goals and gain profitability. For obvious reasons, the manufacturing
industry is the pioneer of the concept of CE as it involves the heavy flow of material
resources. However, the tourism sector has not given much attention to the CE
initiatives (Manniche, Larsen, Broegaard & Holland 2017, 7.) Therefore, the CE
approach is an essential step for the tourism industry to develop possible future paths to
sustainability.
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3.1.2 Transition to circular tourism
- “Sustainability transitions are long-standing, multi-dimensional, and essential
transformation processes through which traditional socio-technical systems move
towards new and more sustainable approaches of consumption and production”
(Falcone 2019, 2). “Transformative tourism” is recently a new buzzword among
tourism academics (Ateljevic 2020, 4). Visionary economists agree that the sustainable
future is made by reassessing individuals, firms, and governments’ value systems,
behavior patterns, and lifestyles. Few voices are calling for a change, but the tourism
industry yet seems not to participate in the progressive economic debate. (Shelodon
2021, 2.) The tourism sector has been criticized for not addressing the environmental
problem sufficiently (Floriodo, & al. 2019, 1).
- Even though the original idea of the CE was applied to industrial activities, this

approach of sustainability has been widening in other areas including the service sector
such as tourism. The roadway to the transformation is done by innovating new products
and consuming tourism services and new business models. (Vargas-Sanchez 2018, 2.)
In order to make the tourism industry more sustainable, the main idea of the CE can be
transferred from the industrial field to the tourism sector by applying the business ideas
that are based on sustainability models (Girad & Nocca 2017, 69).
- The tourism industry is dynamic, and the transformation includes many variables.
Sustainable tourism indicates several different principles that can be implemented to the
entire tourism industry. Some of the concepts could include 1) new models of
production and consumption of water, food, and energy, 2) using CE model to minimize
and reuse the waste, 3) conservation of the biodiversity and the environment by using
the biodegradable products, 4) creating cultural values by preserving the culture, 5)
greening the tourism industry by creating a condition to make tourism economy for low
income generating group. (Pan, Gao, Kim, Shah, Pei & Chiang 2018, 16.)
- A three- axis model for a circular destination was developed and implemented in
Balearic Islands (Florido, Jacob, and Payeras 2019). It focuses on three main axis; the
public administration and/or the destination management organizations (DMOs), the
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tourism sector and the resident population. CE transition in the tourism sector is not
possible with just one actor. The aim of these main axis should be to maximize the value
in tourism. Thus, each axis/sector has a role to play which is outlined in the figure
below.

Role of public
administration
or DMOs

•Designing incentives to promote the implementation of CE measures in the

tourism sector i.e. tax deductions for investment in CE
measures/technologies
•Designing laws and regulations to reduce the obstacles to the application of
CE measures in tourism businesses
•Involving the tour operators in the design of a program of awareness and
changes in tourist habits

Role of tourism
(Hotel)

•Designing a branding strategy that enhances the social and environmental
benefits of circular practices in the hotel establishment
•Raising awareness, training, involving hotel human resources in the design
of a circular strategy for hotel business

Role of resident
population

•Involving the resident population in the change towards a CE of the tourist
destination
•Promoting social awareness about social and environmental benefits
•Designing a system of incentives/penalties to increase awareness and
change in the consumption habits of the resident population towards a CE
model

Figure 7. Roles of the three axis

- Tourism acts as a living laboratory for all actors i.e. government, destination place,
hotels, tourists and local community to practice circular strategies (Florido, Jacob, and
Payeras 2019). Thus, an International Conference on Green and accessible tourism

(Wolde 2016), suggested the following strategies for circular tourism:
+ Design for circularity (for example, constructing infrastructures or business processes in
such a way to facilitate circular flow of resources)
+ Use sharing platforms (for example, online networking sites or software, rental platforms)
+ Regulate the CE (for example, sharing platforms)
+ Circular procurement: use and buy products, materials and services that are sustainable
and/or cradle-to-cradle, recycled, renewable, recyclable, biodegradable
+ Circular construction including building passport for new hotels and parks
+ Use performance-based contracting (for example, pay-per-wash in laundry services)

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+ Maximize digital services, maintenance, repair, refurbishment, and waste reduction,
separation and management
+ Circular sourcing (for example, using organic cleaning products)
+ Take into account what happens after use (accountable to bring it back to the supplier or
dispose in responsible way)
+ Work together with your suppliers and clients
+ Produce on demand (for example, making food only after getting orders will reduce food
waste in comparison to making lot of food at once in anticipation)
+ Renewable energy and energy conservation means boundary condition for circularity
(example, solar panels)
+ Mainly aimed at reducing carbon emissions
+ Lower impact of traveling: public transportation, carbon compensation, bicycle tours,
alternative routes
+ Lower impacts during stay: buy local, organic, use small groups
+ Aim for quality (for example, using low-quality materials will result in frequent repair and
maintenance causing more disturbance, loss of time and money)
+ Increase awareness of tourists i.e. to respect the local heritages and to adopt circular

practices during their stay
+ Promote eco-friendly tourism i.e. reducing the environmental impacts due to tourism
activities.

- Similarly, there are some strategies suggested by Florido, Jacob, and Payeras (2019),
which are as follows:
+ Improving the development of tourism infrastructures and quality of services as a tourist
destination
+ Reducing the seasonality of tourist services
+ Diversifying tourism activity (cultural tourism, business tourism, health tourism,
ecological tourism) with a circularity approach
+ Strengthening cooperation in the hotel industry through local organizations and networks
seeking to promote CE solutions Stable institutional and governance framework for
innovation in relation to sustainability issues and environmental aspects

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3.1.3 Tourism value chain

Figure 8. Tourism value chain – Source: (Manniche et al. 2017).
- Figure 8 shows a typical tourism supply chain. It starts with pre-travel activities like

booking flights or destination places directly or indirectly via travel agencies. Then, the
traveler i.e., tourist arrives at the destination by using various means of transportation,
such as, car, taxi, ferry, airplane, biking, walking, etc. The accommodation place i.e.,
host, provides a place for them to stay, for instance, hotels, apartments, camps and
Airbnb. Most accommodation providers also provide food to their guests, otherwise,
there are restaurants and food shops nearby. Then, the tourists can explore the host
community and enjoy the attractions or specialties available.

- In addition, it also highlights the importance of infrastructure support throughout the
value chain. For example, hotels need energy like electricity or fuels for heating,
cooking. Each of these infrastructures – information technology, waste handling,
construction and building, energy, water, education, communication and networks, as
well as public sector and health are important for the operation of the business. The
value chain itself, should be flexible to allow circular resource flow creating “circular
infrastructure” i.e., access to renewable energy sources, circular systems for the
treatment of water, access to suppliers and users who base their commercial models on
leasing, circular designs, exchange platforms, etc. (Florido, Jacob, and Payeras 2019).

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