Cardiff could become the first part of Wales to introduce a tourism tax for overnight visitors.
The city council plans to launch a public consultation next month on introducing a visitor levy, after Welsh Government legistation was given Royal Assent in September.
It will allow Welsh councils to charge as much as £1.30 per person per night in most accommodation, iincluding hotels, and 75p a night in campsites and hostels.
Vale of Glamorgan Council has previously ruled out introducing such a levy, but if plans go ahead, visitors staying in the Welsh capital could be charged from April 2027 onwards.
Cardiff Council says it expects around £3.5 million to be raised annually, which would be paid to the Welsh Revenue Authority, who in turn would pay it back to local authorities.
The money raised would be spent on supporting Cardiff's visitor economy, including marketing campaigns, improved infrastructure and supporting more events in the city.
Some visitors would be exempt from the levy, including under 18s in campsites or shared rooms, people staying more than a month in one booking and anyone in emergency or temporary accommodation arranged by the council.
Cllr Russell Goodway, cabinet member for investment at Cardiff Council, said: "Not only do we want people to enjoy their experience coming to Cardiff, but we also want people to stay longer, so we need to increase our offer though investment."
"The proposed charge, set out in legislation, is significantly lower than the typical charge across Europe."
"This initiative is clearly set out in the council’s corporate plan and has been scrutinised in detail by the economy & culture scrutiny committee, and their findings have been built into our proposals going forwards."
"If the proposed visitor levy is agreed by Cabinet and Full Council, a visitor levy partnership forum will be set up to advise on how the funds are used and will help shape Cardiff’s tourism strategy. Final decisions on the spending of the money raised will remain with elected officials.”
But the Welsh Conservatives say the tourism tax will "deter visitors at a time when the hospitality sector needs support most".
South Wales Central MS Joel James said: “With Cardiff set to welcome thousands of visitors for Euro 2028, this tourism tax sends the wrong message."
"Instead of encouraging people to visit, stay, and spend, Labour and Plaid Cymru are putting up barriers to business and punishing success."
"Wales should be open for tourism, by taxing people to come here, Labour and Plaid are sending the opposite message."
The 12-week public consultation is due to begin on Monday 1st December, although approval is needed from the council's Cabinet, who are meeting on Thursday.
A final decision on the proposals is expected next March.
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