Purpose This paper aims to critically analyse the circular economy (CE) models adopted in hospitality and tourism to tackle societal challenges in the current Anthropocene era, exploring the driving values and sustainability approaches. Design/methodology/approach A systematic literature review was carried out with an increasing level of analysis to delve more in-depth into the ability of the CE models to respond to current societal challenges. The review involved a stepwise analysis, starting with a thematic analysis of 151 papers to create a conceptual structure map of circular hospitality and tourism literature. Based on originality and representativeness, 22 papers were selected and analysed according to Hoffman and Jennings’ (2018; 2021) institutional approach to sustainability, which entails specific archetypes to address the Anthropocene society: market rules, technology fix and cultural re-enlightening. Findings The hospitality and tourism industry has made progress towards implementing CE models. However, CE models in market role and technology fix archetypes may fail to address the current challenges of the Anthropocene era. New culture-led approaches within the cultural re-enlightening archetype, such as the regenerative land practices, a-growth and place-making, and circular society, can foster a more radical shift towards strong sustainability. Research limitations/implications The paper highlights the urgent need for a cultural shift towards radical and strong sustainability, identifying future research directions. Policymakers have a crucial role in shaping sustainability practices consistent with an ecological culture centred on acknowledging planetary boundaries. Originality/value Despite the increasing interest in CE models, it is still debated how the hospitality and tourism industry can continue to thrive while avoiding harmful impacts on the environment and local communities. The study critically reflects on the current contribution of CE models towards strong sustainability in hospitality and tourism.