2. Hospitality business smart innovation

Smart innovation of tourist service requires scope of business, technical and social changes, considering sustainability criteria. Considering circular qualitative growth character of any social activity, tourism service business is being modelled as repeating smart cyclic feed-back process, operating in dependence on such cycle of tourism service consumption.

2.1. Tourism business cycle

Tourism business service cycle is being constructed on the base of primary tourism service consumption cycle (table 3).

Table 3. Tourism service provision and consumption dialectics.

Fig. 8. Simplified tourism service cycle (S. Paulauskas 2017)

Simplified tourism service business cycle consists of 6 stages: marketing, communication, accommodation, catering, wellness and local transportation. (Fig. 8)

2.2. Tourism business growth

As in any business there exists quantitative and qualitative growth in tourism sector.
• Quantitative growth means increasing of number of visitors, income and market geography.
• Qualitative growth shows positive changes in rates and relative indicators, such as work productivity, profitability, etc.

Work productivity is the most important indicator of progress. It shows which amount of income was generated by one employee. In tourism business is a lot of manual work, which could be replaced by equipment/robots, smart solutions and virtual informational systems. Employees should switch from manual work to more qualified jobs. Permanent increasing of staff salaries pushes employers to search means for automation of manual work at first.
Reduction of low qualified manual work is global change of Humanity occupation. In the short period employees should be involved in service innovation process through requalification for high-tech work with smart systems. Further robotisation and virtualisation requires to create political and social conditions for providing payment to all citizens Universal Basic Income or Dividend .
Work profitability shows overall efficiency of SME’s tourism business. At first extent transition to green, blue or smart growth requires investments, which allows to increase service efficiency through rise of attractiveness of service thanks to better environment and health quality of service.

2.3. Tourism business service expenses

Detail analysis of tourism service enabled to recognise and divide all expenses of Economic growth into 4 relative groups according to means of their impact into business growth (Fig.9):

1. Office expenses. Reduction of office expenses is possible through virtualisation of communication and globalisation of marketing. For this achievement the accommodation, catering, wellness and local transportation should be managed by smart automotive and robotic systems.
2. Manual work. Manual work reduction will be a result of automation and robotisation of accommodation, catering, wellness and local transportation.
3. Energy. Energy costs will become lower with reduction of office and manual work costs through automation and robotisation of accommodation, catering, wellness and local transportation. Qualitative process of transition from non-sustainable to sustainable – not combusting energy has evident ecological value for reduction of pollution and impact into climate change and human’s health. Decentralisation of energy supply and achievement of autonomous energy quality enables avoid electricity network’s and energy loses in their costs.
4. Materials. Material costs will become lower with reduction of office and manual work costs through automation and robotisation of accommodation, catering, wellness and local transportation.

Fig. 9. Main kinds of tourism service expenses/savings (S. Paulauskas 2017)

Reduction of Energy and material costs leads to increasing of business profitability and this is on direct interest of tourism service business. Reduction of staff costs, transition from manual to high-tech job leads to qualitative growth, which has impact into social and global development processes and progress. Green, sustainable and smart growth require appropriate Clean technologies, Health technologies and Smart technologies, which became nowadays tools for develop tourism service business.

3. Tourism business circular economy innovation

Circular economy innovation ideas cover all stages of tourism business cycle starting from marketing and finishing with utilisation.

3.1. Global transition of tourism innovation

Tourism – is traveling with purpose of information, wellness and entertainment. The demand for travel is grounded on geographical deconcentration of tourism sources in different continents, regions and countries. Informational character of tourism forms two main tourism directions: physical and virtual. Covering of tourist demands is very expensive for tourists and for planet. Tourist spends a lot of money. Planet meets problems related to air and water pollution by travelling and accommodation. During last years risk of travel to some exotic countries became evident due to local climate disasters and terrorism.
Internet technologies are developing in direction of virtual transmission to all 5 human senses: eyesight, hearing, touch, smelt and taste. First two of them are implemented easily trough TV, radio, movies, etc. Scientists are still working on transferring of other senses. And they have success on that.

Fig. 10 Tourism transition trichotomy (S. Paulauskas)

Transition from physical to virtual tourism is going through trichotomy (Fig. 10): A) Physical tourism is wellbeing (thesis); B) Physical tourism is too polluting and risky for travellers; C) Virtual tourism allows to achieve all tourist demands avoiding travel and pollution of environment.

3.2. Tourism innovation virtual model

Nowadays tourism is mostly economic Kf’(t) phenomenon, wide field of tourism business is related to travel, accommodation, catering and SPA (Fig. 11). Large marketing tools are used for attracting travellers and visitors in all countries. Due to transition from biogenic to safety and health demands (A. Maslow) humans start take care of saving environment and stopping climate change. Economical paradigm is being replaced by Sustainable development paradigm Kf(t).

Fig. 11 Virtual model of tourism innovation (S. Paulauskas)

The contradiction H(t) between economic and sustainable approaches will increase accordingly resonance sinusoid. In not far future the physical Kc’(t) tourism will start to be replaced by virtual tourism Kc(t). Each informational demand could be covered trough internet avoiding expensive and dangerous travel. But this will be a bit in Future.  

4. Circular economy principles of tourism SME’s innovation

Circular economy innovation of tourism SME’s business requires to understand and follow the number of the best theoretical principles, raised from great EU strategical growth initiatives and documents.

4.1. Dialectic

Tourism service provider and consumer are two opposites, but always united parts of communication. Frequently consumer looks like passive side seeking for impressions and convenience.
Service provider is active side and he leads on organising and assuring the best communication and satisfaction of the consumer. No secret, that businessman seeks to earn profit from his service.
The principle of dialectic means the balance between service provider and consumer. Disruption of such balance from one or other side reduces efficiency and quality of the service.

4.2. Sustainability

Tourism SME’s innovations should be in accordance to sustainable development criteria:
1. Economic – should result higher work productivity and reduce manual work of tourism service users and providers.
2. Ecologic – not polluting of environment.
3. Social – should result in longer full-range life span and happiness of tourism service providers and users.
4. Responsibility – no leave problems for people around and next generations.

4.3. Complexity

Tourism services should provide and assure covering all complex of consumer needs, which are obligatory during tourism service cycle:
1. Communication – exchange of information between service provider and consumer during overall service cycle.
2. Accommodation – to assure hotel service.
3. Catering – to assure meal and drinks.
4. Wellness – to assure opportunities for SPA.
5. Local transportation – to assure opportunities of choice of convenient transportation in service location.

4.4. Holistic

Considering A. Maslow’s human demand growth pyramid holistic approach requires to consider and create opportunities to satisfy all level needs of tourism service consumers:
1. Biogenic – needs on meal and water.
2. Safety and health – avoidance of risk for body and mind.
3. Communication – assure wished contacts with other people.
4. Self-esteem – to protect disturbing of achieved self-assessment level.
5. Self-expression – opportunities for expression of a creativeness.

4.5. Smartness

Considering different quality levels of business growth, SME should give priority to higher ones:
1. Physical growth – increasing of technical facilities to give service for bigger number of visitors and higher complexity of service.
2. Economic growth – increasing of work productivity and profitability through automatization and virtualisation of business service.
3. Green growth – introduction of clean technologies seeking to reduce pollution of environment and expenses related to waste treatment and recycling.
4. Sustainable growth – introduction of health and secure for employees and consumers work conditions.
5. Smart growth – assuring of permanent growth through introduction of cyclically operating technical and social Self-Management system including software, artificial intelligence and innovation service.

4.6. Applicability

CE solutions must be applicable, based on:
1. Technical implementability – must exist technical solutions of an innovation considering hardware and software equipment.
2. Practical use – must be applied in business practice of some places of the World.
3. Interest of consumers – consumers must be interested in an innovation considering tourism service scope and elements, price and delivery conditions.
4. Interest of SME’s – tourism service providers SME must be interested on an innovation, considering profitability of business and covering other demands of businessmen.
5. Interest and legislation of a society – European community or/and a State must be interested, and EU/local legislation must be friendly for an innovation. 

5. CE innovation solutions and applications suitable for tourism SME’s business

Innovation is the bridge between the past and the future. In this investigation the past is liner economy, and the future is circular economy. Absolutely necessary to forecast and provide how tourism SME will look in quality of circular economy. Nobody knows and cannot forecast the future exactly. However, use of existing development trends and advanced practical applications gives opportunity to talk about circular economy solutions and applications in tourism sector.

5.1. Global marketing

Globalisation of tourism enlarges geography of visitors and unification of services. Tourism globalisation is related to transition of physical booking to large internet marketing and booking networks, such as booking.com, hotels.com, etc. Holders of such networks keep close direct links to consumers and realise promotion and feed-back loops on tourism service through polls of visitors on matter of satisfaction of received services.
Participation in global tourism marketing and booking networks allows to increase work productivity, reduce local marketing operation, office expenses and qualified manual work. Transition of competition to global market raises needs of tourism service provides to be in line with nowadays innovations and service culture.
Application: Marketing services operated by a global tourism service network.

5.2. Virtual communication

Computer, internet, mobile phones are rapidly changing communication between tourism service providers and consumers. Face-to-face booking of tourism service is replaced by use of computers, e-mails and internet pages. The communication service is transforming into virtual self-service, which allows to avoid some office work and office expanses. There are no any doubts, that in nearest future any face-to-face communication between service providers and consumers will be avoided.
Application: Face-to-face contact-less booking and self-service of a customer through internet (PC or smart phone).

5.3. Smart accommodation services

Accommodation is one of the main parts of tourism service. Accommodation service needs significant manual work related to cleaning of apartment and bedroom, replace of materials and bed-clothes. Assurance of lighting, heating, cooling, ventilation and other conditions is enough big challenge to employees of a hotel.
So, new or energy efficient buildings, equipment, smart loops of circular self-regulation must become unavoidable features of each building. Room, furniture, equipment, shower, etc. must be convenient for consumers and not require large manual work from employees. Use of energy and materials should be reduced by smart innovations. There is only one option in visible future – to be smart accommodation.
Application:
• A++ energy buildings and equipment.
• Own electricity production.
• Wind, solar, hydro energy.
• Smart heat pump heating.
• Smart ventilation system.
• Smart climate control.
• Person recognizing lock.
• Smart lighting system.
• Tweaking glass panels.
• Smart cleaning system, dirt free surfaces.
• Smart adjustable bed.
• Automatic roll sheet change.
• No garbage.
• No waste.
• No wastewater.
• Heat from waste water return to the heating system. 

5.4. Smart catering

Provision of catering services in hotel and its restaurant is obligatory component of whole tourist services. Special attention should be paid to planning of a meal according to individual needs. Convenient buffet has weak side related to up to 40% of waste food. Virtual booking systems enable to book catering according to personal needs and request of visitors.
Easy communication by internet should give opportunity to reduce food waste amounts. Scientific researches on Human genome creates further opportunities for food service individualisation according to very specific needs of a concrete guest. Use of automatic drink preparing equipment and 3D print food solutions in hotel rooms could avoid necessity to have expensive restaurants and breakfast rooms.
Application:
• Food supply on individual pre-orders.
• Meal processed with 3D printer.
• No food wastes.
• No waste cooking oil.

5.5. Smart wellness

Health monitoring and support devices in rooms and special SPA, sport and wellness procedures become obligatory part of whole tourist service. This assure increasing income of service provider due to additional services. Also, this requires taking care of automation of lighting, heating, cooling, water supply. Traditional use of paper, towels, cosmetic materials should be replaced with electronic solutions. Waste and heat should be taken off from water, which should be cleaned and reused. SPA visitor emergency and trauma prevention equipment should be used in SPA.
Application:
• Smart toilet with bidet and dryer.
• Smart shower with dryer.
• Smart bathhouse.
• Water taps with dryer.
• Dirt free surfaces.
• Health monitoring with wristwatches. 

5.6. Smart local transportation

Tourism service provider could earn some attractiveness and additional income by proposing for visitors local transportation means: bicycles, rollers, wheel chair, bus shuttles, etc. All combusting transport means should be replaced by natural or electric vehicles. Driver-less transportation outside and inside a hotel is the most appropriate from point of view of circular economy, especially for people with special needs.
Application:
• Smart care system for guests with special needs.
• Free of charge smart transportation outside and inside of the hotel.
• Faces recognising elevator.
• Electric driver less vehicles.
• Dirt free surfaces of cars.

It’s necessary to mention, that innovation flow is permanent, so, the self-assessment tool will be constantly updated. 

6. Self-assessment results

After finishing self-assessment users should have opportunity to see:
1. Achieved level of circular economy culture in scale: physical, economical, green, sustainable and smart.
2. Achieved level of circular economy by activities: global marketing, virtual communication, smart accommodation, smart catering, smart wellness, smart local transportation.
3. Comparing achieved CE culture on tourism service market map.
4. Potential savings on scale: office expenses, manual work, energy and materials.
5. Monitoring of own CE innovation progress.
6. Links to e-handbook, e-learning and e-advisory tools, worked out by project CIRTOINNO team.

7. Benefits of circular economy innovation for tourism SME’s business and society

Circular economy, same as other European innovation initiatives and strategies are not a buzzwords. They are targeted to decide global and local development problems. At the same time circular economy gives direct additional profit for tourism SME’s through increasing of service complexity, saving of materials, energy and indirect – trough increasing of benefit for society. Anyway tourism SME’s earn many times through circular loops of innovations.

7.1. Rise of work productivity

Work productivity is one of main economic indicators of progress and development of a society. It shows efficiency of human work, which economic value is created by one employee or worker. Stagnation of work productivity growth results destruction and crisis in a society. So, only increasingly growing productivity is indicator of wellbeing of a society.
Talking about increasing of work productivity it’s necessary to state, that higher work productivity not necessary results in total exclusion of people from job places. Human are operating two kinds of job: manual and intellectual. First of them is hard, mostly physical and it’s not desired by human, being done mainly for salary. At other hand, the price for manual work permanently is increasing. Naturally, this not desired manual work is being replaced by machines, robots and virtual systems.

7.2. Increase of high-tech jobs

Intellectual work is desired and related to highest human demands – self-esteem and self-expressions, which are constantly increasing.
So, raise of work productivity is freeing people from hard manual work and creates opportunities for high-tech intellectual jobs. Human should seek to increase their intellectual abilities to fit high-tech jobs through permanent self-improvement. No other ways exist.
Tourism business nowadays uses a lot of manual work on assuring clean rooms, beds, SPA and healthy catering. Automation and robotisation of tourism services result in reduction of manual work demand, work places. However, the need for high-tech jobs related to innovations of tourist service will create new high intelligence work places.

7.3. Growing business profitability

It’s not a secret, that business historically is dedicated to profit and this can’t be taken from SME’s purpose. However, European Community declares being society of social market. It means that not only economic, but social capital also is a value of interaction of service providers and consumers.
Social market orientation gives businessmen market opportunities to attract more visitors and ern additional income. Seeking to increase service complexity SME could assure the catering during all the day, SPA, local transportation opportunities and other.

7.4. Increasing social responsibility

Socially responsible business brings new feature into social market activities. Because socially responsible businessmen ern not direct additional income, but increasing of self-esteem for doing good deals, which anyway returns to them sooner or later.

7.5. Cleaner environment

Cleaner environment and reduced climate change become undisclosed good deals for planet. Large tourist flows, and huge amounts of energy, food and other materials are related to enormous amounts of waste and pollution of environment. Circular economy ecological benefit is evident and not doubtful.
Tourism SME’s have opportunity to take part in great ecologic initiatives and help to do our planes more acceptable for life.

7.6. Longer life span of people

Cleaner environment, safer food, healthier tourism services result in the most important indicator of human wellbeing – full-range life span and wellness. According to World Health Organisation, combustion related pollution of environment reduces human life span by 17-20%. So, humans could live 20 years longer if combusting and polluting of environment would be stopped.