The world is facing climate change, biodiversity loss, and pollution, significantly impacting lower-middle-income countries like Egypt, Morocco, and Tunisia, which depend heavily on tourism. Poor waste management, unclear responsibilities, and weak policies contribute to environmental degradation. Tourism, a key economic driver, also increases the problem by high plastic use and waste generation during peak seasons. This study evaluates current waste management practices in Alexandria (Egypt), Essaouira (Morocco), and Hammam Sousse (Tunisia) and proposes improvements using a newly developed “Extended Sector Responsibility” (ESR) model, which introduces an innovative organizational approach to waste management in touristic destinations. Using a combination of desk research, questionnaires, waste sorting analyses, and expert interviews, our research identifies systemic deficiencies. None of the studied locations have formal source separation systems, and waste management heavily depends on the informal sector. Hotels exhibit limited capacity for effective waste practices due to the lack of municipal infrastructure for separate collection. Economic analysis of the ESR model, which involves the establishment of a new waste recovery facility, demonstrates that while such facilities can generate revenue exceeding operational costs under specific scenarios, their long-term viability hinges on additional funding, possibly through Extended Producer Responsibility (EPR) mechanisms. Although Egypt and Tunisia have EPR legislation, implementation remains inadequate, and Morocco lacks such frameworks. The study emphasizes the critical need for investments in municipal waste management infrastructure, including logistics, sorting, and recycling systems. It also highlights actionable opportunities for the tourism sector to reduce waste by minimizing single-use plastics and food waste. By adopting the ESR model, the tourism sector can play a pivotal role in transitioning to a circular economy, ultimately mitigating environmental impacts and enhancing sustainability in the region.