Circular economy could reduce costs and carbon emissions in hospitality sector

A circular economy could boost the hospitality sector by reducing costs and making resources go further while at the same cutting greenhouse gas emissions, a new report finds. 

The ‘Hospitality Spotlight Report’ explores how circular economy business models, which place an emphasis on enabling materials to be re-used and wasted less, can play a vital role in ensuring the hospitality industry is more efficient and cost-effective, as well as less polluting.

The report, part of the NICER (National Interdisciplinary Circular Economy Research) programme, saw researchers run consultations including two workshops with 42 stakeholders from across the hospitality sector and its supply chains in which they explored the challenges and opportunities for circular economy adoption and measures of success.

It advocates for a ‘whole-system approach’ to eliminating waste and pollution that focuses on circulating products and materials during the ‘inflow’, ‘use’ and ‘outflow’ stages – an approach it says has the potential to reduce emissions, boost resource productivity and reduce costs.

It details initiatives that reduce demand for materials and resources at the outset, such as creative design agency Object.Space.Place’s (OSP) approach to circular refurbishment, working with clients in hospitality industry to embed circular principles into their refitting plans so as to prioritise longevity, energy efficiency and the use of low-impact materials.

It highlights mattress maker Silentnight’s initiative to tackle low rates of mattress recycling through redesigning their products to use fewer materials (with those materials used chosen due to ease of recycling) and a new modular design where a top ‘comfort layer’ can be replaced, reducing a mattress’ carbon footprint by 23%.

Initiatives such as Loopcycle (now part of ImpactLoop) help tackle the amount of working equipment that businesses no longer use, with their digital platform helping to trace, manage and recover physical products throughout their lifecycle, as they work with businesses to identify opportunities to refurbish, reuse or resale unused equipment, while making significant cost savings.

Other initiatives aim to decrease waste by extending the life of materials, such as a new recycling programme by the Textiles Services Association designed to maintain the value of high-quality textiles through future-use cycles, aiming to address the 6,000 tonnes of textile waste generated each year by hotels.

The hospitality sector is the UK’s sixth largest industrial sector, contributing £103bn per year to the economy and supporting 2.74 million jobs.

However, its environmental impact is largely negative, with 2.8m tonnes of waste generated per year at a cost of £3.2bn, and the sector emitting around 1% of the UK’s total greenhouse emissions.

Hotels, pubs and restaurants are also intensive users of materials, either through activities such as construction and refurbishment, or through goods and services such as textiles and laundry for soft furnishings, linens and uniforms, or electrical items, packaging and food and drink.

The Hospitality Spotlight report looks at how a circular economy can help a sector facing a number of business pressures, such as tight profit margins, staff shortages and the rising cost of living (food prices rose 26.2% between 2021 and 2023 and the cost of energy rose 238% in 2022).

It finds that a high percentage of the hospitality sector’s emissions (around 84% on average) are embedded in its supply chains, making it difficult to tackle through a net zero approach, which will mainly focus on renewable energy and increasing optimisation and efficiencies.

The report acknowledges the barriers to a circular economy in hospitality, including limited knowledge of circular economy and no clear goal to work towards, while identifying six enablers that would accelerate the transition: funding and incentives; data collection and transparency; collaboration and leadership; knowledge and awareness; policy and regulation; and shared vision.

It also sets out recommendations for five groups: hospitality businesses, policymakers, academic partners, manufacturers and third parties, which focus on funding and incentives, data transparency, collaboration, policy engagement, knowledge sharing and creating a shared vision across supply chains and sectors where circular economy thinking is embedded into organisations’ vision, mission and values.

Danielle Farrow, an Industrial Impact Fellow for the NICER Circular Economy Hub, said: “Our report underscores that a circular economy offers a tangible solution to the challenges faced by the hospitality sector. To do nothing, or to focus on net zero targets alone, misses the opportunity to realise financial savings through addressing wasteful practices, to increase resource and material security through value capture strategies, to increase supply chain resilience through simplification and increased collaboration and to increase profit margins through innovation.”

‘Hospitality Spotlight Report: Accelerating Circular Economy Adoption’ will be launched at 12 noon on Thursday 10 October at the webinar Accelerating Circularity on the Hospitality Sector (register via link).

Read and download the report here.