Legal costs for package holiday sickness cases will be fixed under new rules aimed at deterring false claims.
Similar controls are in place for other personal injury claims, but they will now be extended to cases when holidaymakers seek compensation.
The travel industry says claims have mushroomed in recent years despite illness in resorts declining.
Travel agents are now calling on the government to ban cold calls encouraging people to make a claim.
The Association of British Travel Agents (Abta) said there were about 35,000 claims over holiday sickness in 2016, a 500% rise since 2013.
The industry said the total cost of all claims was £240m in 2016 and the growth in cases risked raising holiday prices for all.
It said that many tour operators were put off challenging cases in court owing to the potential of spiralling legal costs.
In turn, this is said to have prompted claims management companies to encourage tourists to seek holiday sickness compensation.
The government asked the Civil Procedure Rule Committee, which is responsible for setting rules on legal costs, to consider bringing package holiday claims under the same rules as personal injury claims.
The committee has approved that move and the limits on legal costs will take effect in the coming weeks.
Justice Minister Rory Stewart said those claiming compensation when they had not been being sick on holiday was fraud.
“This damages the travel industry and risks driving up costs for holidaymakers. This behaviour also tarnishes the reputation of British people abroad. That is why we are introducing measures to crack down on those who engage in this dishonest practice,” he said.
Mark Tanzer, chief executive of the Association of Travel Agents said: “Closing the legal loophole before the summer should lead to a reduction in the number of false claims.
“We encourage the government to keep this matter under review and continue to pursue a ban on cold calling by claims management companies in relation to sickness claims.”