Antoni Riera (Impulsa Balears): “Circular economy eliminates many of the value leaks that exist in hotels.”

One of the aspirations of Impulsa Balears, as a strategic knowledge platform at the regional level, is to become a benchmark in the creation of shared value that facilitates decision-making, the commitment to new strategies and, ultimately, the boosting of the global competitiveness of an eminently touristic archipelago. According to Riera, the circular economy is recognised as having “essentially environmental sustainability motivations and benefits” but believes that hotels need to go further and fully introduce circularity into their corporate strategy and business core.

Can the circular economy improve the current competitiveness of hospitality businesses?

Certainly. We understand that the circular economy allows opening new sources of value, from the creation of new products and services, the transformation of current business models, etc. Issues that promote the simultaneous cross-activation of levers of efficiency – innovation – sustainability, as important both at the microeconomic level for companies and at the macroeconomic level for the whole archipelago.

Could you specify an example of a product or service that a hotel can develop in terms of circularity?

There are endless examples, the range is very wide. For example, in terms of reuse, there is the possibility of reusing furniture or co-designing it. We also have specific cases of hotel chains that have opened a line of business around making compost from organic waste from buffets. In hotels there are many value leaks, whether in the supply chain, in the provision of services, in the renewal of assets… All these value leaks, from circularity are eliminated and therefore efficiency and competitiveness gains are achieved.

The nice thing about circularity is that it is closely related to the company, as it seeks a return

And wouldn’t it lead to any noticeable loss or collateral damage?

Actually, no, it’s a win-win. The beauty of the circular economy as opposed to other avenues of progress or even other levers such as sustainability is that it is closely linked to the company. Therefore, when the company executes it, in principle it seeks a return. At the moment an important part of the hotel sector is orienting its circularity efforts more in terms of corporate social responsibility rather than business, but this must gradually move and that is what we focus on, to get circularity into the corporate strategy and the core of the business.

In the search for a circular and more sustainable model, what role does technology play?

Technology is a must for circular transit. Technology facilitates the circular economy with its innovative vision and scalable solutions from technology companies (IT). Digital access, the cloud, cognitive computing, blockchain, high-speed internet, IoT and digital reality will enable the paradigm shift, closing technical loops of materials. Thanks to them today we are already able to give traceability to materials (including waste), lower costs, automate tasks and even generate economic value.

For you, what are the outstanding issues that currently exist in the hotel sector?

According to UNWTO reports and World Bank data, the sector is responsible for about 21% of all tourism-related carbon dioxide emissions. This is because hotel activity consumes many resources such as water, food, energy, non-recyclable products, natural resources, etc. Aware of this, the Balearic hotel sector has already started circular transit. Proof of this is the good circular practices already being implemented. Beyond broadening the base of these good practices and aligning them strategically at both the property and sector levels, perhaps if I had to point to a pending subject, I would opt for the development of measurement models. Much work remains to be done not only in terms of measuring consumption, emissions… derived from hotel activity but above all in terms of the impact that circular practices can bring to the hotel sector.

The hotel sector is responsible for about 21% of all tourism-related carbon dioxide emissions

What conclusions do you think would confirm these measurements?

In other sectors, the focus on the circular economy is at the core of the business, mainly in industrial companies. The challenge is to do the same in service companies, for which there was little evidence. We are already working on it, and we see that many projects are oriented towards corporate social responsibility and take measurements in terms of the actions they do, but not in terms of the impact that this can have on their value chain, on their supply chain. This is what is missing to get that evidence.

Is that something we can see accomplished in the short term?

Since the sector’s technological resources are high, I believe it is feasible to fill this gap in the short term. The main obstacle is labour. This will require specialists who are able to implement the new projects. This will be a differential value for the many workers with the right qualifications and a new avenue for those who are currently training or for those who will be training in the coming years.

What fields should these future professionals be trained in?

In terms of ecodesign, both buildings and furniture, etc. Circular economy itself, especially in terms of recycling, reuse of materials. You also need a lot of chemical, architectural knowledge. I think it opens a very wide range of professions that are not currently on the market and that will be needed. In renewables, the demand for engineers is already very high. The same will happen in terms of regenerative agriculture. Deep down, we are opening new professions.

Circular economy opens a very wide range of professions that are not on the market now

Hotelinking’s book “Hotel Data” speaks of “the technological revolution that the hotel sector has been waiting for.” Do you share that hoteliers must jump on the Big Data bandwagon to become more competitive?

Without a doubt, improving the customer experience and improving the operation of the property is possible from the correct application of Big Data and this will lead to a significant increase in competitiveness in these two areas. It is enough to highlight the benefits that Big Data brings in customer satisfaction, offer segmentation, demand anticipation, rate management, continuous improvement, inventory optimisation…

Do you think we are witnessing a change in the business vision when it comes to managing the hotel business?

I think we are facing a change of mindset. Sustainability has fully entered the strategy of companies both in terms of image, reputation and differentiation, but also with the circular economy sustainability penetrates the internal processes of the hotel company. From this perspective, circularity is increasingly welcomed. This is also helped by the fact that available technologies allow us to embrace the circular economy, because without technology there is no circularity. At the same time, these are actions that are also being promoted from a regulatory point of view, especially in the Balearic Islands.

The Impulsa Foundation pursues the objective of turning the Balearic Islands into the first circular tourist destination. What would it mean for the community to achieve this milestone?

The Foundation presents actors with the transition to a circular tourism system as a valid ‘regional development commitment’ to set and achieve new aspirations for prosperity. Particularly in the Balearic Islands the activation of these levers is essential to shorten the negative productivity differentials that the islands accumulate compared to the average of the European regions. Negative differentials, which in turn result in per capita income losses.