The Circular Economy (CE) defines a set of principles for production and consumption radically different from the linear regime prevailing in today’s market economies, which is based on continuous growth and increasing resource throughput. The CE goes further than calling for increased use of ‘green’ resource-effective technologies in isolated links of production systems. It requires a comprehensive design of alternative solutions over the entire life cycle of products, adoption of closing-the-loop production patterns within the entire economic system, as well as new types of business models and forms of consumption that discard ownership and rely on active users rather than passive consumers.

Thinking in terms of (eco) systems is key, taking natural ecosystems exemplary: all materials serve as nutrients. Systems thinking is the understanding of things within the context of a larger whole. All parts are connected and internal diversity ensures the resilience of external shocks. In the CE, economy and nature are understood as symbiotic and interconnected in complex systems that make it hard to distinguish one from the other, meaning that the ideal is not to reach zero impact, like in the ‘green economy’, but to design solutions with a positive impact on the system. Regeneration of resources is not only material or about recovery of energy but aims instead at improving the way of living and the economy as a whole. Thus, CE can help society reach increased sustainability and wellbeing at low or no material, energy and environmental costs.

The CE holds big potentials for tourism businesses in reaching higher sustainability and profitability, not least related to the provision of accommodation, food and spa services and the material flows of energy, foodstuff, water etc. Surely, large corporations such as global hotel chains will be the first-movers but technological and organizational solutions developed and applied by large companies often hold potentials for small and micro tourism businesses as well.

Yet, a grand scheme of universal ready-made CE technologies and a one-size-fits-all route to their diffusion and implementation in society do not exist. Rather, we witness a mushrooming introduction of new circular technologies and business models, driven by individual companies in cooperation with suppliers and customers and targeted specific innovation processes start with steps, which are not truly ‘circular’ but should be considered ‘green’ or ‘sustainable’. Moreover, often the driving motive for starting a change towards more circular (or green) business operations is the highly mundane, almost trivial one of saving costs.

Thus, it is important for tourism SMEs and public support agencies to depart on the circular economy journey in a situated manner, taking into account local conditions and potentials and drawing on specific opportunities in relation to the socio-technical setup one is embedded in.