New legislation in the field of tourism

Image: Dyrhólahey. ©Ragnar Th. Sigurðsson - arctic-images.com

On June 12th this year, the Icelandic Parliament passed two new acts of law in the field of tourism;

  • Act No. 96/2018 on the Icelandic Tourist Board
  • Act No. 95/2018 on package travel and linked travel arrangements

Both acts of law will enter into force on January 1st 2019. The most extensive changes in legislation are in matters/issues pertaining to improved consumer rights and safety.

All parties organizing, combining, selling or operating tours must, under the new acts of law, as under the current ones, hold a valid licence from the Icelandic Tourist Board. Licences will be issued in two categories: Authorized Travel Agency and Authorized Travel Service Provider.

The definition of package travel (package holiday) is redefined and broadened and a new concept of linked travel arrangements is introduced.

Many of those who have hitherto been exempt from mandatory licencing and from providing insolvency protection will fall under the scope of the new acts of law.

All parties operating tours in Iceland will be required to compile safety plans for each type of tour offered.

Current licences for Travel Agencies will keep their validity; licenced Travel Agencies will not be required to renew their licences. Current holders of Tour Operator licences and other parties falling under the scope of the new legislation must apply for a new licence no later than March 1st 2019.


Two types of licences

All parties organizing, combining, selling and operating tours will be required to hold a valid licence under the new acts of law, as well as under the current legislation. Licences will be issued in two categories:

  • Authorized Travel Agency
    Applicable to all parties falling under the scope of Act No. 95/2018 on package travel and linked travel arrangements
  • Authorized Travel Service Provider
    Applicable to parties offering tours that are not covered by Act No. 95/2018 on package travel and linked travel arrangements. 

The concept of booking service will no longer be applicable under the new law; registered booking services must apply for appropriate licence. The operation of information centres must be registered with the Icelandic Tourist Board.

A broader definition of package travel (package holiday)

The concept of package travel (package holiday) is redefined and broadened, including much more varied combinations of travel arrangements than pre-defined tour packages.

A new concept – linked travel arrangements

Furthermore a new concept of linked travel arrangements is introduced by the law. The short definition of linked travel arrangement is that it entails at least two different types of travel services purchased for the same trip or holiday, not constituting a package, resulting in the conclusion of separate contracts with the individual travel service providers. Parties facilitating linked travel arrangements must provide insolvency protection as is required of those providing package travels (package holidays).

Sellers of package travel are required to provide more comprehensive information regarding consumers’ rights than under current legislation. Parties facilitating linked travel arrangements are also required to provide information on consumers’ rights.

More parties will be required to hold licences and provide insolvency protection

It is evident that many of those who, according to current legislation, are not required to hold a licence or provide insolvency protection will fall under the new acts of law; this may e.g. apply to the operation of booking services, airlines, accommodation and car-rental companies that facilitate linked travel arrangements.

Safety plans made mandatory

Anyone operating organized tours within Icelandic territory will be required to compile safety plans for all types of tours. Safety plans must be updated regularly and made available in English as well as Icelandic.

Licences for travel agencies keep their validity

Current licences for travel agencies will keep their validity but new logos will be introduced. Licenced travel agencies are not required to renew their licences.

No licencing fees for renewed licences before March 1st 2019

Current tour operator licences and registrations of booking services will be valid until March 1st 2109. Before that time licenced tour operators and registered booking services must look into their operations and apply for a new licence in accordance with their operation. The Icelandic Tourist Board will determine whether the applicant is operating as travel service provider or travel agency, according to the new legislation, and issue the appropriate licence. No licence fee will be collected for licences that are renewed before March 1st 2019, however if the operations require a licence for travel agency, a fee for assessing the amount of insolvency protection will be charged. All applications submitted after March 1st 2019 will be subject to full licencing fees.

Companies advised to start adaptation to the new legislation as soon as possible

The aforementioned amendments to the legislation will have considerable effects on the operating environment of tourism companies. It is important that tourism executives acquire a good understanding of the new acts of law and start proper adaptation processes as soon as possible.

Further information

Further information and guidelines will be published on the Icelandic Tourist Board‘s web. Letters including further clarification and information, tailored to each group of stakeholders, will be sent to current licensees as well as others that fall under the new acts of law.

When the new acts of law enter into force at New Year they repeal the Tourism Administration Act no. 73/2005 and Act No. 80/1994 on package tours.


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