Challenges in the roles played by public and private sector organizations in the sustainable tourism development are identified for two of the Russian Arctic regions: Nenets Autonomous Okrug and Sakha Republic. A review on the existing institutional arrangements is made including the public sector (regional and local levels), private entrepreneurship, local communities and the ways the participatory decision-making process is promoted. The evaluation of the outcomes of the present institutional framework prove to be unbalanced in order to facilitate coordinated tourism development. Furthermore, the issues arising from the unclear institutional setting influencing the creation of an integrative system of tourism distribution channels. This situation weakens the roles played by all stakeholders and gives fewer incentives for the private businesses and local communities to be involved in the tourism development activities.