Travel and tourism post-COVID19: Reinventing the industry based on sustainable Circular Economy principles

Fri 8, 2020 / By Fabrice Sorin

Yet, all crises offer an opportunity to reflect, rethink and ask fundamental questions. In doing so, it is good to remind oneself that before COVID19, travel and tourism was in fact exposed to other challenges that affected its long-term viability and growth potential; importantly those related to its adverse environmental and social sustainability impacts.

About one tenth of global CO2 emissions are associated with travel and tourism activities [1]. The industry is an important user and consumer of materials, energy and other resources and a source of significant waste streams. Concerns about climate and other environmental issues are already affecting consumers’ travel preferences (demand side) and tourism actors’ social licence to operate (supply side) in various locations [2], [3].

As international visitors are forecast to reach 1.8 Billion by 2030 (from 669 Million in 2000) [4], travel and tourism related sustainability impacts are bound to increase substantially in a ‘business as usual’ scenario.

As in most crisis situations, opportunities emerge “to either advance, or stay where you are” (Maxwell Maltz)

There is an understandable desire within the industry that things will get ‘back to normal’ soonest possible. Back to the volumes, growth and ways of doing things pre-COVID19. However, the industry’s current volume growth model is unsustainable in the long run. A more effective paradigm is needed, and fast.

The notion of a circular economy (CE) has been gaining momentum as a new economic paradigm, offering a compelling “approach for achieving local, national, and global sustainability” [5] and driving economic prosperity, innovation and competitiveness at the same time. CE practices are increasingly being pursued by SME’s and global corporations alike [6], and achieving a CE has been highlighted as the number one priority of EU’s new ‘green deal’ [7].

At this time of rethinking travel and tourism post COVID19, it therefore makes sense to try and visualise what the industry might look like in a Circular Economy. What could the travel and tourism industry look like if designed based on Circular Economy principles?

A vision for a Circular Economy inspired travel and tourism ecosystem 2030

The goal of a circular economy is to be regenerative of natural, social and human capital. Accordingly, travel and tourism actors define their business purpose and stakeholders broadly and beyond pure economic terms. They will continuously ask themselves: How do our business activities actively contribute to the sustainability, resilience and wellbeing of the natural, social and human systems we are operating in?

A CE is powered by the sun; travel and tourism actors have made a shift to renewable energy to power their activities; buildings, facilities and transport. Tourism activities and itineraries are designed to favour transport means that have zero or low carbon emissions. Where use of fossil fuels cannot be avoided, emissions are by default offset and funds allocated to research and to implement and scale alternative technologies.

In a CE materials are not wasted. Inefficiencies of the previous ‘take-make-waste’ linear economy have been turned into business value by keeping materials, resources and products in use for as long as possible. At their end-of-life, products, components and materials provide inputs or ‘nutrients’ to other value creating activities. Travel and tourism actors acknowledge their important position within key value chains and their responsibility for ensuring that their key biological and technical material flows; building materials, food, textiles, consumables, water, etc., are kept in use and maintained at their highest value for as long as possible. This reduces need for ‘virgin’ materials and helps restore ecosystems. Materials and products that are not fit for a circular flow have been eliminated.

Partnerships have been established to coordinate and optimise circular flows of materials, with active dialogue between the industry and other upstream and downstream players. Circular procurement is mainstream, favouring sourcing of supplies that are non-toxic and designed for circularity, and always considering what happens at products’ ‘end-of-active-use’ stage. Industry actors endeavour, e.g. through innovative collaboration with farms, energy companies and waste collectors, to return biological materials, such as food leftovers and other organic waste, back to the biosphere as fertilizer for new growth.

To facilitate circularity, e.g. in the technical sphere, new circular business models and enabling technologies are actively used within the industry. Use of B2B sharing platforms, material passports and distributed ledger technologies optimise asset use, increase trust and transparency, and reduce costs. Sourcing via CE driven ‘product-as-a-service’ models, e.g. for textiles and other assets is commonplace, helps keep products in use for longer and provides more value at lower cost. Mobility-as-a-service (MaaS) platforms are mainstream, provide seamless multi-modal transport experience to users, lower GHG emissions and mobility friction and optimise the use of private and public transport fleets. In conjunction, new mobile platforms have been adopted by private operations and regulators to facilitate a healthy and optimised flow of tourists to key attractions. This has maximised customer experience and lowered pressure on destinations, habitats and infrastructure.

Purpose is the new black; to respond to new generations’ (in particular Gen Z) demand, and willingness to pay, for purpose driven and sustainable business attributes [8], [9], travel operators have transitioned towards impact focused value propositions. Doing good in the destinations and societies they visit is now a key motivation for visitors, and operators have adjusted to these core consumer expectations. Adhering to strict environmental and social standards is increasingly compulsory for operators, as a way to collectively raise the sustainability profile and strategic positioning of countries and regions as destinations.

Most importantly, travel and tourism actors are now adept systems thinkers. They recognize that they are a part of a larger natural and social system, and that the health of those systems defines their strength and resilience in the short, medium and long term. Destination planning and development are fully coordinated and integrated in macro and micro level development strategies. This is done in close collaboration between all industry stakeholders and based on destinations’ environmental and social carrying capacities and sustainable development goals. The industry’s cumulative leverage within major value chains is actively used to optimise the economic, social (including local economies) and natural ecosystem as a whole. This is achieved through capacity building, enhanced forms of collaboration and co-creation of solutions, both within the direct travel and tourism supply chain and across associated sectors. This collaborative effort stimulates innovation in new products and services, new value creation, generates jobs and more prosperity in affected communities.

There is a pressing need for a new positive travel paradigm. The Circular Economy offers a compelling framework for an innovative, sustainable and resilient tourism industry development. It can provide guidance for the redesign and restart of the industry following the COVID19 crisis – making travel and tourism a part of the solution to many of the economic and sustainability challenges we are facing in the 21st century.

Never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before (Rahm Emanuel)

What do you think? Is the described vision a feasible future scenario? How might it look different? What does it take to get there? Please share your thoughts.

 Authors:

Stefán Einarsson

Fabrice Sorin

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe Now for Latest Updates

Sign Up for a Quarterly Newsletter with the Latest Developments and New Case Studies from CE360's Consultants!

Submit successful

Follow Us: