Tour Operator Licensing Guide Investment Sector Licensing Department Shawal 1435 1 Contents S Headline Page 1 Introduction 3 2 Legal Reference 3 3 Licensing Regulations for Tour Operators 4 4 Definitions 4 5 License categories for tour operators 4 6 Licensing Requirements 5 7 Additional Requirements for inbound tour operators 7 8 Licensing Mechanism 8 9 Tour Operator Office Requirements 8 11 Employment Requirements 01 11 General Financial Liabilities 01 12 License Form and Validity 01 13 General Guidelines 01 2 Introduction The Saudi Commission for Tourism & Antiquities seeks to develop and improve the tourism industry through creating comprehensive tourism programs and activities, which include various elements required by tourists during the tourism trip. SCTA is keen on delivering such programs and activities by international standards to assure quality and uniqueness of the tourism product, hence, assisting in the marketing of such products in all tourism areas and sites within the Kingdom. SCTA is well aware of tour operator key roles and their direct influence on the development of the tourism sector. Hence, it was stated in the General Strategy for Tourism Development, that the organization of the tour operators’ sector is one of the most basic elements for the success of sustainable tourism development, which is fully in line with the orientation of all tourism departments in various countries around the world. In order for the SCTA to control the development of the tourism industry in the Kingdom, it had to develop rules and regulations for tour operations with the objective of winning the confidence of consumers in the quality of tourism products. Legal Reference It was on this basis that the SCTA has developed special regulations for licensing tour operators with the aim of developing this activity in accordance with international standards, and guarantee the rights of investors and beneficiaries alike. The SCTA’s main role is licensing and then monitoring tour operators to verify their efficient application of the required regulations. SCTA will offer necessary incentives and support to investors in this sector enabling them to play their role in the development and marketing of tourism trips, activities and events. This guide covers licensing controls and requirements for tour operators’ activities. Licensing Regulations for Tour Operators First: Definitions SCTA: Saudi Commission for Tourism & Antiquities Tour Operators: any entity, company/institution offering the wholesale of tourism services specializing in tourism groups arriving to the Kingdom or domestic tourism, which regularly or systematically organizes tours or tourism packages consisting of two or more elements of the following, for a comprehensive price to the public: Guided Tours All types of tourism accommodation Transportation services including car rentals for tourists and issuance of international 3 driving licenses Travel insurance services. Second: License categories for tour operators The license category The scope of the license Bank Guarantee Bank Guarantee Domestic Tour Operator Design and organization of tourist programs in a specific geographic scale (within a single administrative region) and has no right to access permissions on tourist visas, or tourism marketing programs outside the Kingdom of Saudi Arabia. 25.111 Internal Tour Operator Design and organization of tourist programs geared for tourists from within the Kingdom of Saudi Arabia And is not entitled to access permissions on tourist visas, or tourism marketing programs outside the Kingdom. 51.111 Inbound Tour Operator Design, organization and marketing of tourism programs geared to tourist groups coming from outside the kingdom of Saudi Arabia, and is entitled to access permissions on tourist visas, according to additional requirements. 111.111 Outbound Tour Operator Design, organization and marketing of tourism programs geared to tourist groups leave outside the Kingdom of Saudi Arabia, and is not entitled to access permissions on tourist visas 211.111 Third: Licensing Requirements 1. Operators shall not practice tour operation services without a license issued by the SCTA. 2. Applicant shall complete the forms prepared for this purpose on SCTA website (www.scta.gov.sa), and attach the following: a. A copy of the applicant’s ID card (for Saudis) b. A copy of the commercial registration, if available; c. A copy of the establishment contract for companies, if available d. A copy of the power of attorney, if any, or certified authorization of the Chamber of Commerce. 4 3. Applicant shall be of good conduct and has never been judged by offense incompatible with the duties of the profession or outrageous offense or criminal penalty or an offense against honor or integrity. 4. Applicant shall sign an undertaking to comply with all provisions and instructions issued by SCTA to practice tour operating activity in marketing outlets, main and branch offices licensed by SCTA in consideration of adopted regulations by concerned parties, and that his activity, concern and focus shall be limited to tour operation only. 5. Licensee shall undertake to provide adequate and safe means of transportation for tourists, with special specifications suitable for the climate and geographical conditions of the Kingdom and which are approved by the Ministry of Transport. 6. When applying for (inbound tour operator) category, applicant shall submit documents verifying an experience of no less than two years in domestic tour operations licensed by the SCTA at the category of (internal tour operations) during that time. If this requisite is not met, it may be replaced with the following requirements: A - Present a vision for the tourism programs to be implemented including: Quality of these program Geographical scope within the Kingdom Target markets Time period for implementation of each phase B - Provide an administrative and technical organization comprised of efficient and experienced personnel, for the design, marketing and organization of tourism programs according to criteria approved by the SCTA. C – Sign a written pledge for inbound tour operators D - Provision of the following: Certificate verifying regular tour operation during that period and prior to the submission of application as well as the ability to implement tourism programs Present any verification of willingness to cooperate with a certified external agent for the implementation of the tourism program in the coming period. E. License inbound tour operator for one year on a temporary basis F. Link tourist visas to the activation of domestic tourism programs that are to be reviewed every 3 months by (The Saudi Commission for Tourism and Antiquities), so that a standard ratio of domestic tourist numbers is set 60% and the number of inbound tourists, 40%, and if the licensee fails to achieve this ratio the system is shut down 5 G. The system will be shut off for current inbound tour operator licensees that have not started practicing yet, licenses will not be renewed after their expiration, and if they wish to activate or renew their licenses, new requirement shall be applied. 7. The license applicant shall provide SCTA with the following documents, in the event of approval: • Lease or title deed (valid). • Illustration of the site (Sketch). • An unconditional and irrevocable guarantee from a local bank approved by the Saudi Arabian Monetary Agency on behalf of the Saudi Commission for Tourism and Antiquities for a period of three years, depending on the license category. • Copies of Saudi employees’ certificates (executive director / programs planner / Public Services Officer), experiences and police certificates. Fourth, Additional requirements for foreign investors: 1- The foreign entity should be an existing entity established outside the Kingdom and has the permission of tourism investment in the Kingdom according to investment regulations of the General Authority for Investment to practice these tourist activities endorsed by SCTA for foreign companies. These companies should have a license issued by the competent parties in their country of origin. 2- Foreign investment activity is authorized to practice tour operating activities through main or branch office of in all cities of the Kingdom with the exception of (Makkah / Madina) where any tourism programs are not allowed. 3- All employees in the facility should be Saudis and the investor is not permitted to issue visas for any employee in the facility. 4- Establishment / investor should have an experience of not less than five years in the same activity in the country of origin. 5- Establishment / investor should be a member of an association in country of origin or in one of the main organizations related to tourism. 6- Provide a feasibility study for the project from certified office of the Kingdom in Arabic. 7- All the documents should be endorsed by one of the Saudi embassies / consulates in the investor's home country. 8- Foreign investor in tour operating activity may only get one or both of the following classifications: • Internal tours operator. • Outbound tours operator Fifth: Licensing Mechanism 1- Applicant shall fill-in all forms and enclose the required documents. 2- License application shall be personally submitted by the applicant or his authorized 6 representative. 3- A committee from SCTA shall inspect the applicant’s office prior to approval to ensure that all conditions and specifications are met. 4- SCTA shall establish a special register of all licensed tour operators. Sixth: Office Requirements A. Main offices & Branches:1- The office shall be accessible and located on a main road. 2- The office shall be used exclusively for the purpose by which it was licensed 3- A clear sign shall be properly installed in the office premises, displaying the commercial name in both Arabic and English, the logo, and SCTA license number. 4- The original valid license or approved copy shall be displayed at all times at the main office and all branches. 5- Minimum communication means/equipment shall be installed at the offices (phones, faxes, internet connection, etc.). 6- All safety and security measures shall be provided in the office; 7- Inclusive and detailed records of all activities and operations shall be kept in the office. B. Marketing outlet:1- Outlet shall not be less than 4m2 and no less than the space specified for the employee; 2 m2 2- Outlet shall be closed from all sides and provided with an entrance for employees 3- A sign shall be suitable posted above holding the trade name of the licensee in both Arabic and English, type of activity, and license no. 4- Maintain quality of appearance, hygiene, condition of furniture and ensure periodic maintenance 5- Provision of all safety measures 6- Outlet shall be designed so that the reception is no lower than 1 m 40 cm with a part above to hang the sign. The outlet is a closed unit where only SCTA approved personnel may stand inside 7- Select a suitable location for the port so that it does not block emergency exits or hinders movement in public places 8- Use of suitable materials to build the marketing port as well as provision of method of communication inside the outlet. Sixth: Employment Requirements A. General Provisions: 1- The licensee shall comply with the policies and instructions of nationalization and activate the Saudiazation plan in tourism corporations, establishments and offices; 7 2- The licensee shall ensure that all employees shall be a holder of the minimum qualifications and experience in the tourism field and shall submit their certificates of qualifications and experience with the application; 3- The licensee shall employ qualified human resources for no less than the following positions: Operations Executive Director (or can act as such himself if meeting all the requirements). Tourism Program Planner. Licensed Tour Guides according to the size and number of tourism programs. Sufficient number of general service employees in accordance with the demands and needs of the services offered B. Required Qualifications for Employees 1- The licensee shall provide the SCTA with a list of all employees selected for the practice along with their respective qualifications and certification of experience 2- The minimum level of qualifications and experience approved for the positions stated in (phrase 3 of the general employment conditions) above as clarified in the table below: Position Provisions, Qualifications and Experience Executive Director Tourism Program Planner Saudi national Fluency in both English and Arabic (reading and writing as minimum) Certificate of good conduct and Police Clearance Certificate Must hold a university degree unless applicant holds the following: - a high school diploma with an experience of no less than 3 years as an Executive Director in the field of tour operation. - a diploma in the field if tourism with an experience of no less than 1 year as an Executive Director in the field of tour operation. - A tourism (technical/ vocational) certificate, (ISATA, UFTA, Tourism Institute or an equivalent) with no less than 2 years administrative experience in the field of tour operation. Saudi National, if not available, a qualified non-Saudi may be employed temporarily for not more than 3 years, during which a Saudi counterpart is trained for that positions; or until a qualifies Saudi is identified and employed. Fluency in both English and Arabic (reading and writing as minimum). Certificate of good conduct and Police Clearance Certificate. Holds one of the following: - A university degree in marketing or business management with no less than 3 years’ experience in the same field or 8 Position Provisions, Qualifications and Experience - has attended a tourism training course for the last 3 months. Scientific degree/diploma or certificate in tourism with no less than 5 years’ experience in the development and design of tourism programs. - Tour Guide General Service Employee Saudi national Holds a valid Tour Guide License issued by the SCTA Saudi national 18 years or age or above Certificate of Good Conduct and Police Clearance Certificate Holder of either one of the following: - Intermediate school certificate - Appropriate certification issued by certified institutions (local/ international) or vocational training course conducted by certified tour operators - Three years’ experience in general services related to tour operations Eighth: General Financial Liabilities 1. Tour operators shall submit a bank guarantee of: a- Domestic Tour Operator (25.000) thousand SR. b- Internal Tour Operator (50.000) thousand SR c- Inbound Tour Operator (100.000) thousand SR. d- Outbound Tour Operator (200.000) thousand SR. Enclosed with the license application form, in order to cover the risks of the tour operator’s activities. The SCTA may modify the amount of the guarantee if it deems necessary. The guarantee shall be issued in favor of the SCTA by a local bank approved by the Saudi Arabian Monetary Agency, and shall have a validity period of not less than 6 months from the expiration of the license. The guarantee shall be automatically renewed and shall not be released without the SCTA’s written approval or at the termination of the activity. This shall protect the rights of tourists or tour operators in the event of malpractices. 2. SCTA President may cash in all or part of the bank guarantee if the licensee did not settle his financial liabilities for other parties included in the tourism program upon a final judgment of the court. The bank shall comply with the order of the SG in case of violation. 9 Ninth: License Form and Validity 1- The license shall be valid for 3 years and can be renewed for one or more similar periods of time if the licensee has met all the licensing requirements. 2- The License shall be issued in both Arabic and English, stating the following: The name and coat of arms of the Kingdom of Saudi Arabia SCTA’s name and logo License number and date of issuance Commercial Registration number for companies and personal ID number for individuals Owner’s name (company/institution) Office title and address Validity period of License Tenth: General Guidelines 1. Tour operators shall only contract tourism sites and service providers that adhere to the Royal Decree No. (M/24) dated 8/7/1426H regarding the activation of private civil security systems by contracting private security companies approved by the Ministry of Interior to guarantee the safety and security of tourists. 2. Tour operators shall adhere to all related rules and regulations issued by the government. For further information, please visit SCTA’s official website: www.scta.gov.sa 11