Enhancing the regulatory environment and enhancing the level of provision is a crucial approach to achieving sustainable growth in the tourism economy. This paper employs a DID model to analyze the effects of legal institution development on the performance of tourism firms. Specifically, it focuses on the Tourism Law of the People's Republic of China as a quasi-natural experiment. The study utilizes listed tourism firms from 2011-2021 as the research sample. The finding reveals that implementing tourism law can promote firms' financial and non-financial performance, especially non-financial performance. This impact operates mainly through the positive effect of labor supply.