Nowadays, the process of transformation towards a circular economy (CE) is a priority issue for the European Commission (EC). Circular economy presents a new approach, which consists in keeping products, materials and resources in the economy for as long as possible and minimizing the production of waste, which, if it is created, should be treated as secondary raw material. However, the model of transformation towards the CE is not an easy issue which takes place at different stages in the individual Member States. Moreover, there are visible differences in the implementation of the CE model in individual industries. These differences have deepened in 2020 as a result of the COVID-19 pandemic in Europe and worldwide. The paper presented best practices for effective implementation of the CE in the tourism industry, and opportunities and obstacles faced by the sector in the face of the prevailing COVID-19 pandemic. It should be underlined that tourism industry is the sector most affected by the COVID-19 pandemic. To rebuild the importance of tourism industry, a lot of attention is paid to the issue of new management models, emphasizing that the recovery plans should include actions focused on economic stability, epidemic safety, but also the implementation of the sustainable development (SD) principles to convert the tourism industry to CE model. It requires reorganizing the functioning model of all key market participants, including entrepreneurs, public institutions and consumers.