Tourism, which is sensitive to macro-environment, is significantly influenced by institutional structure and industrial policy. Under the guidance of the new institutional economics, this paper analyzes effects of institutional change on regional tourism development and differences. Firstly, from the temporal aspect, China's tourism management system evolves with institutional environmental change and it is divided into the period of the planned economy and the period from the planned economy to market economy. Institutional change is an important factor to promote the rapid development of tourism industry in China. Its rapid growth is clearly linked to institutional change since the implement of reform and opening up policy. Secondly, from the spatial aspect, according to the law of the path dependence, institutional change is one of variables to form and expand regional tourism differences. Tourism development is possibly locked by the inefficient institution and institutional innovation unlocks the inefficient institution and promotes tourism industry to enter again into a beneficial circle. As a result, institutional innovation promotes tourism industry, and reduces regional tourism differences. Thirdly, the study finds that institutional change is significantly relevant with tourism gross income and foreign exchange earnings. China's tourism foreign exchange earnings sustained growth with the institutional change. To some extent, institutional change is an important variable to promote tourism development and result regional tourism differences in China. Finally, institutional change is strongly dependent on the law of the path dependence. The authors also point out that the government of China at all levels can not copy or transplanted from other regional institution or mode of tourism development. They should scientifically analyze regional situation and internal and external influencing factors, so that they would make suitable policies and reasonable orientation of the regional industrial status of tourism industry, which will improves economic performance and promote tourism sustainable development.