Can a Circular Economy Bring Back Authentic, Sustainable Travel?

Katrina Affleck
Co-founder & CEO
July 5, 2021

Remote working in Bali. Summer in the Bahamas. A weekend in the Norwegian fjords. With today’s affordable flights and growing culture of backpacking, travel is more attainable than ever.

In fact, unlike our parents’ generation, travel for Gen Z and X is practically a given. While our ancestors took their summer trips to the nearest beach, and spent their family vacations in the local mountain range, the standard these days is that the world is our backyard for adventure and detox.

So, what is making modern travel unsustainable and inauthentic?

The question of travel sustainability is a big one, and spans many areas from aircraft fuel to rising house prices. Many of the larger, harder-to-solve problems involve the economic impacts of rapid growth, and the prioritization of tourism over locals.

As we have seen, the younger generations take travel for granted, and expect affordability. This pushes down prices for the locals who are providing tourist services, and extends capacity beyond local means. Big business then enters the fray, removing the profits from the boom from the local community. Then, as housing and living costs become unreasonable for day-to-day (and not holiday) living, some residents and businesses are forced to clear out.

This is how mass tourism is unsustainable for local businesses and economies.

Meanwhile, travelers are getting a worse deal without even knowing it. The demands of high-volume travel push businesses to provide easily packaged, one-size-fits-all products and services. Plus, as international companies compete and bring in cheaper options, local businesses are forced to homogenize and lower the quality of their offerings. It is more likely, therefore, that your experience as a traveller of any new and exotic location has been modified to fit international crowds cheaply and easily. In essence, it is not truly the place you intended to visit.

In other words, the problem with tourism needs to be solved by both the business and the consumer.

How can a circular economy help

Circular Economy is an economic trend and transformation that has been taking off in recent years with the intention of drifting away from linear economy. Linear economy is based on the principle of take-make-dispose, and is widespread across different markets.

In the tourism industry, there are many sub-sectors that interact in order to make these experiences happen. From food supply to transportation to accommodation, travelers consume a wide range of resources in order to fulfill their needs in their destination. This resource usage highly impacts on the region’s ecosystem:

At each one of the ‘destination’ stages, a local business sees income. However, in the current landscape of travel business, big business, represented by marketplaces, dominate at every stage of the cycle.

This means that the more money a region makes, the larger sums of money leave the community.

The solution? Build and champion a circular economy that continually pushes revenues back into the local sphere.

It is estimated that for every 1$ you spend on local travel, 0.68$ is given back to the community through salaries, taxes and local services. But when you buy through internationals (such as OTAs — Other Travel Agents), only 0.43$ stays local.

Clearly, supporting local travel is preferable for locals. And as we have already seen, sourcing your experiences, activities and tours locally is actually also better for the tourist.

What can you do to support change

This brings us back to the original question: Can circular economies create better, more sustainable travel experiences? Here’s what we’ve learned so far:

  • Businesses and local residents often do not benefit from the tourism in their region: in fact, the resulting gentrification can make life harder for them.
  • Tightened pricing and high volume of visitors creates fewer authentic, unique and personalized experiences for tourists.
  • Linear economy currently leads the trend, removing over 70% of tourism revenues from tourist regions through international marketplaces and OTAs.
  • Supporting local businesses directly benefits them, their local community, and your travel experience.

In short, supporting a circular economy could be the solution to the problem with travel. If businesses as well as tourists can divert their attention towards a personal connection with direct sales, we might have a chance to make a difference!

Let’s look at a couple of tips to get us started:

For travel businesses:

  • Get your own website, and drive traffic to it. This doesn’t mean you have to let go of OTAs and marketplaces (as you can integrate these with your website backend!), but it puts you in the driver’s seat. Head over to atravo, tailor-made for travel businesses, for a demo.
  • Keep your services and products local. The more your hard-earned cash ends up in the pockets of your neighbors, the better!

For travellers:

  • Buy local. Sometimes the best advice is the simplest.
  • Where possible, take the extra time to book tours and activities directly from the service providers without going through any third-party vendors.
  • Don’t expect everything to be low-cost. We all love those killer holiday deals, but remember the real cost of what goes into running a business.

So, book your next trip! And get excited about getting to know the locals in a way that will support tourism in that region for years to come!