The new law also includes clauses ensuring tourists' rights to know, choose, receive aid, and be respected during their travels, while advising them to behave at the same time.
The long-awaited law, which had been in development for about 30 years, was adopted by China's top legislature on April 25.
"It is high time to introduce this law," Dai Bin said.
"The law answers both the demand to regulate the fast-developing tourism industry and the call from the central authority to build the sector into a pillar industry," he said.
The country's tourism sector has undergone dramatic changes over the past decades.
In the 1980s, tourism remained a privilege for only a few in China, mainly foreigners and overseas Chinese, while ordinary Chinese mainly acted as service providers in the sector.
Over the past 30 years, the sector has gradually grown into a pillar industry of the national economy, and China's domestic travel market has grown into the world's largest.
China now has about 25,000 travel agencies, more than 20,000 scenic spots, and more than 13.5 million people employed in the tourism industry.
The major consumers in the travel market now are members of the general public.
Figures from China's tourism authority show that domestic tourists made 2.96 billion trips and Chinese tourists traveling overseas made 83.18 million trips in 2012 -- about two to three trips per person a year on average.
China previously had no specific law concerning tourism, but did have some administrative rules concerning travel agencies and tour guides, which have failed to solve many "deep-rooted problems" regarding the sector.
Dun Jidong, senior travel marketing manager at China's leading online travel agency, Ctrip, said the new law will inevitably lead to a reshuffle in the tourism industry.
"By setting legal curbs on business operations, illegal practices will be phased out and regular travel agencies will have greater room for development," he said.
Dun said the new law will require travel agencies to use product innovation and high-quality service, instead of tempting prices, to attract customers.
"The new law, however, has to be strictly carried out to have its due effect," he said. "A 'zero tolerance' attitude should be adopted to counter violations."

National Plug In Day celebrated in Washington D.C.
New model of indigenous surface-to-air missiles testfired
118.28-carat diamond to be auctioned in HK
Maternal love under streetlight
Naked foreign student sits in the middle of a road in Haikou
Colorful Yunnan: Enjoy the natural beauty
Harbin named Chinese city with most beautiful women
For last four students, teacher couple sticks to post on island
When big sport stars were kids
PLA's 38th Group Army conduct training
People mourn for victims of mall attack
The last days of Wan Aihua
Highlights at 12th National Games of China
Beijing Film Academy welcomes freshmen
Large mahjong party sets new world recordDay|Week|Month