Samenvatting

White paper: Financing the circular economy in the tourism sector

For SMEs in tourism, a transition to a circular economy can often be costly. Crowdfunding is a promising financing approach for a circular economy in tourism as it can help avoid the bureaucratic and often complex funding application procedures as well as the possible absence of appropriate loans and grants. It is essential, however, for entrepreneurs to follow guidance on how to initiate, develop and propose a crowdfunding campaign.

In addition, the white paper has also highlighted the importance of creating and promoting a destination-based crowdfunding platform. Such a platform would allow the destination to create a collective effort and potentially joint crowdfunding campaigns, target tourists and communities, and ultimately promote the destination and its sustainability successes.

Entrepreneurs should also consider different aspects after the implementation of the circular project, this for instance may include assessing the benefits of the circular project and communicating these to the funders and all customers. Such communication would ensure support for future campaigns, and a sense of participation in a successful project by the funders and it would also enhance customer experience.

Local authorities can have a pivotal role in both cases, when a destination-based platform is created and used, and when entrepreneurs use existing crowdfunding platforms. Authorities can for example provide technical and financial support to SMEs to develop a circular project and can provide promotional support to the campaigns potentially reaching a wider audience through the destination website and by using social media.

Tourism is very much a fashion-based industry, and, as such, it needs to have effective marketing. It is increasingly known that sustainability can be a marketing asset for a destination. The circular economy, as a concept, is not well-known, partly because it is new. The wider concept of sustainable tourism is not fully understood by the market, even after its emergence and first implementation nearly forty years ago (Bausch et al., 2021). Steps should be taken to explain and market the concept of the circular economy as often as possible, using a multi-media marketing strategy.

The issue of governance might need to be considered if the circular economy is undertaken by a partnership of several SMEs, by an entire destination, or even perhaps by several destinations in one region. It is to ensure equity between partners, maximise benefits, and publicise the benefits of the process. Evidence for the need for effective governance comes from the now abundant experience obtained from efforts to implement sustainable tourism strategies (Bramwell, 2011; Bramwell & Lane, 1993; Bramwell et al., 2017).

To conclude: crowdfunding for a circular economy in tourism has the potential to raise essential funds for SMEs that cannot easily be accessed through more conventional financing options, but as in using every funding channel, it requires time and resources to be successful. This white paper provides initial guidance to tourism entrepreneurs that are seeking to engage in fundraising for their circular projects.