The levy, which could raise up to £33million a year, will see adult visitors to Wales charged £1.30 per night to stay in hotels and Air BnBs and 80p per night for campsites and hostels.

It means a group of four adults holidaying in an AirBnB for a week will have to pay £36.40 in fees. For a group of eight adults, this rises to £72.80.

For four adults holidaying in a hostel or campsite for a week, the visit will cost an extra £22.40. For eight adults, this rises to £44.80.

The levy has been heavily criticised for hitting the poorest families the hardest as the cost-of-living crisis worsens after Chancellor Reeves’ disastrous budget failed to spark growth.

Welsh Conservative Shadow Cabinet Secretary for Finance, Sam Rowlands MS, said: “Labour and Plaid’s toxic tourism tax will hit the poorest families the hardest.

“On the same day that energy, water and council tax bills all rise substantially for families across Wales, Labour Ministers have chosen to vote through a new tax on domestic family holidays. They are completely out of touch.

“The Welsh Conservatives will not rest until we axe the tax and renew the case for a pro-tourism, pro-business and pro-family tax policy from the Welsh Government.”

There are also concerns the levy will impact Tourism, a vital part of the Welsh economy which accounts for 12 per cent of all employment in Wales.

Leading trade body UKHospitality Cymru, which represents over 130,000 hospitality venues in Wales, warn the tax will ‘further burden accommodation businesses’.

They advocate for any funds raised from the tax to be ‘ring-fenced for spending on the hospitality, tourism and visitor economy’ and ‘not be funnelled into day-to-day council spending’ which includes enormous council chiefs’ salaries and pension payments.

David Chapman, Executive Director of UKHospitality Cymru, said: “While we don’t agree with the introduction of visitor levies, which place an additional burden on already over-stretched businesses and impact the ability of Welsh tourism to remain competitive, should the Bill be passed it’s crucial that hospitality is made central to the process.

“The sector must be the primary beneficiary of any funds directly raised, so that we can invest in the local economy, drive job creation, and boost economic growth right across Wales.”

Monmouthshire resident Helen Fawcett who recently ran an Airbnb said: “We despair daily about the crazy ideas coming out of Cardiff.

“They should be promoting Wales, not shutting it down. A room tax will further deter people from visiting.

“People will feel unwelcome, and it will again impact rural businesses, many of whom are farmers trying to diversify by renting rooms.

“So much for a welcome to Wales!”

It will be up to Wales’ 22 councils to decide if they want to impose the tax, but it is widely expected all will do so as Wales’ authorities are scrambling to raise more cash as costs soar.

All 22 councils are raising council tax by an average of £145 for 2025/26, with Ceredigion (£192 rise), Conwy (£185) and Flintshire (£184) having some of the largest hikes in Britain.

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Furthermore, Labour controls the most councils in Wales (seven) and runs minority administrations in most of the nine councils under ‘no overall control’, meaning they are likely to implement their party’s legislation from the Senedd.

Three other councils in tourist hotspots of Ceredigion, Gwynedd and Anglesey are controlled by Plaid Cymru whose Senedd members also backed the bill last night.

Defending the decision, Finance Minister Mark Drakeford argued the charge is too small to deter people from visiting Wales.

He pointed to the nightly charge costing ‘less than a sausage roll’, ‘half a cup of coffee’ or ‘bottle of water’.

“I don’t believe for a single moment that paying this modest levy will put people off from everything that Wales has to offer.

“This modest bill will do good, it will offer choice to people,” he argued.

Mr Drakeford argued visitor levies were not radical, highlighting 50 or so countries already use them.

The former First Minister also argued tourists who benefit from Wales’ infrastructure and services should help maintain them to keep Wales as a compelling destination to visit.

“It is simple, straightforward and fair. A flat rate levy, as we propose, is simple to understand, it’s clear to visitors and providers alike,” said Mr Drakeford.

“Moreover, it is straightforward to administer. Most small businesses will only be required to submit one annual return, and all businesses will have the choice of making that return through an agent.

“It allows local authorities to decide whether or not to introduce a visitor levy in their areas, reflecting local needs and circumstances.”

During yesterday’s Senedd debate, Mr Drakeford also announced the charge would be rising by 5p for Air BnB and hotels to £1.30 and by 5p for hostels and campsites to £0.80.

This is so the Welsh government can exempt under 18’s from the charge after concerns were raised from scout groups and school trips visiting Wales.

The Bill will now progress to the amendment stages in the Senedd for two further votes before it becomes law. It is not expected to be in place before 2027.

The Welsh Government was approached for comment.