Coastal tourism must support local livelihoods while reducing waste and environmental pressure, yet circular-economy initiatives often depend on governance arrangements that connect material flows, local actors, and decision-making. This comparative qualitative case study examined how circular-economy principles were understood and practised in Pallette and Bajoe, Bone Regency, Indonesia, and what enabled or constrained their application. Twenty purposively selected informants (10 per site) represented tourism and small-enterprise actors, residents, local government, local organizations, and community representatives. Semi-structured interviews and field observations were analysed through reflexive thematic analysis using a hybrid deductive-inductive coding strategy supported by NVivo. Interview and observation data indicated that waste management in both sites remained predominantly collection-and-disposal oriented, although Pallette had more formalized cleaning arrangements while Bajoe relied more on dispersed informal handling. Reuse and material recovery occurred through isolated practices, including bottle collection and the use of food waste as livestock feed, rather than through coordinated recovery systems. Community involvement was more commonly reported in tourism-related economic activities than in environmental decision-making, indicating participation asymmetry. Governance fragmentation was identified in discontinuities among actor roles, responsibilities, coordination, community influence, and links between collection, sorting, recovery, and reuse. Existing informal recovery channels enabled limited circularity, whereas weak sorting infrastructure, knowledge and time constraints, unstable recovery channels, and limited institutional coordination constrained its institutionalization. The study contributes by showing that the central problem is not the complete absence of circular practices, but the weak governance connections needed to transform dispersed informal circularity into an integrated community-based recovery system.