The Senedd passed plans for a 拢1.30-a-night tourism tax in parts of Wales from 2027.
Senedd members voted 37-13 for the tourism tax which will see people charged 拢1.30 each, plus VAT, for stays in hotels, B&Bs and self-catering accommodation.
People staying in hostels and campsites would pay 75p per person per night, with under 18s exempt from the lower rate of the tax which would be introduced in 2027 at the earliest.
The tax would raise around 拢33m a year if implemented across the country but the 22 councils in Wales will be given powers to decide whether to introduce a levy locally.
Only two councils, Cardiff and Anglesey, 鈥 have so far plans to bring in a levy but other authorities had yet to make a decision or had 鈥渘o plans鈥 to introduce a tax.
A register of visitor accommodation providers operating in Wales will also be established by the bill, laying the groundwork for licensing plans set to be brought forward separately.
Proponents argue the levy will ensure visitors contribute to the cost of services with revenue reinvested, while detractors warn the tax will put tourists off and damage Wales鈥 economy.
Tourism taxes are commonplace on the continent and, closer to home, Scottish councils will gain similar powers next year and Manchester introduced a visitor charge in 2023.
Leading a debate before the key vote Finance Secretary Mark Drakeford told the Senedd: 鈥淏y passing this bill, we will give councils the choice to introduce a modest additional charge which would be reinvested to support a thriving, sustainable tourism industry.鈥
The finance secretary said the visitor levy will be the first local tax for more than 500 years to have been designed and made in Wales, marking an important step for devolution.
Prof Drakeford said the Welsh Government wants to ensure the pressures and opportunities of tourism are fairly balanced, with visitors contributing to infrastructure and services.
The former first minister pointed to evidence 鈥渇rom Iceland to New Zealand鈥 of the revenue generated contributing significantly to challenges without deterring tourism.
He argued the bill would strengthen communities and build democratic accountability, putting tourism in Wales on a new and sustainable footing.
But Sam Rowlands, the Conservatives鈥 shadow finance secretary, described the bill as 鈥渂ad for Wales and bad for the Welsh tourism sector鈥.
Warning the economy is in dire straits, Mr Rowlands said the tourism tax will impact jobs and harm the economy as he pointed out that the industry itself was broadly opposed.
The tourism tax bill was introduced as part of the Welsh Government鈥檚 now-collapsed co-operation agreement with Plaid Cymru between 2021 and 2024.
Luke Fletcher, Plaid Cymru鈥檚 shadow economy secretary, reiterated his party鈥檚 support, saying: 鈥淭here is a genuine opportunity here for us to create a sustainable tourism sector that works with both our communities and businesses.鈥
Mr Fletcher added: 鈥淭he very same arguments were happening when they were looking to introduce a tourism levy in Barcelona and in other places, so I do really believe we will look back at this as a positive step forward for our communities.鈥
Labour鈥檚 Jenny Rathbone criticised the Conservatives for 鈥渂eing completely out of touch鈥, with thousands visiting Cardiff for the Oasis concert and communities picking up the costs. She asked: 鈥淲hy should poor people rather than visitors have to pay?鈥
Closing the debate, Prof Drakeford agreed, accusing the Tories of 鈥渃atastrophising鈥 a 鈥渕odest measure鈥 which he compared to less than the cost of a cup of coffee.
