This study argues that sustainable tourism planning cannot be implemented unless institutions restructure their behaviors (i.e., the formal policy process) in close cooperation with the industry’s stakeholders (i.e., informal elements). What is missing in the case of North Cyprus is the concept of governance as distinct from government, which began to manifest when government became an organization apart from citizens rather than a process (Plumptre and Graham, 1999). Therefore, this study investigates the institutions that compromise the policy-making process of governance and its inferential outcomes for the purpose of achieving sustainability. Using a qualitative research strategy, a semi-structured interview questionnaire was administered. Interviewees were targeted within the relevant institutions based on purposive and snowball sampling. The underpinning conceptual framework that guides the methodology is based on the Environmental Sustainability Index (ESI, 2005) with emphasis on the component of ‘social institutional capacity’: governance. The study revealed the need for an institutional overhaul with an embedded process of governance as a new institutional culture. Furthermore, an institutional approach should accompany new practice methodologies for the way the tourism sector consumes places, produces products, and applies a conservation-based ethic to the natural and built environment.