Whitepaper: Financing the Circular Economy in the Tourism Sector
Highlights
Below, a brief summary is given in English, Dutch and French of the key insights from the white paper. You can download the full version at the top of this page.
White paper 2 highlights (Dutch)
White paper 2 highlights (English)
White paper 2 highlights (French)
The purpose of this Whitepaper
This white paper is mainly addressed to tourism SMEs. It proposes crowdfunding as one of the available financing mechanisms for a circular economy. In a recently published White Paper by the FACET project, six strategic steps were identified to enable local authorities to create a favourable environment for supporting the emergence of a circular economy in destinations. Pieces of advice were also given on how conventional financing options can be tailored to financing circular solutions. Conventional financing options include grants, voucher schemes, and loans and can be tailored to the needs of a circular economy in tourism by:
- Promoting the concept of the circular economy among financial stakeholders.
- Providing technical support to tourism SMEs to apply for funding.
- Restructuring funding requirements for a circular economy.
Yet, these financial solutions are not always available and/or suitable for SMEs and circular solutions, therefore, in this white paper, reward-based crowdfunding is proposed as a promising option for SMEs, especially when seeking to raise initial capital investments for a circular initiative.
SMEs often find it challenging to access conventional funds because of high administrative costs and the time-consuming and complex funding applications involved. In addition, some financial support schemes tend to target larger scale investments. For SMEs working in tourism in the 2 Seas region, reward-based crowdfunding might be an interesting alternative. It offers the opportunity to raise money more simply, without creating debts or losing ownership. Also, crowdfunding provides an opportunity to promote and market the company as well as its sustainability strategies, get feedback on the new business concept, and stimulate more active involvement of the public and tourists in sustainable initiatives. Crowdfunding allows firms to raise small amounts of money online from many individuals to fund new projects. Crowdfunding can help tourism SMEs overcome the financial barriers of a circular economy, related for instance, to the purchasing of equipment, installations, and technologies. Yet, crowdfunding is not easy and requires a strong proposition for a target audience, solid planning, and professional execution. The purpose of this white paper is to provide the necessary guidance to tourism entrepreneurs that intend to crowdfund their circular economy ideas.
This white paper will not only explain the process of crowdfunding – with a particular focus on reward-based crowdfunding – but also suggests the creation of destination-based crowdfunding platforms and provides stepby-step guidance on how tourism SMEs can engage in crowdfunding campaigns to make their business models more circular. The white paper builds upon the experience of the FACET project, the interviews with financial stakeholders, and relevant literature.
