The Welsh Government has rejected calls for under 18s to be exempted from a proposed tourism tax, arguing doing so would result in a "significant" fall in revenue.
Plans put forward would see guests paying a ￡1.25-a-night fee at hotels, B&Bs and self-catering accommodation, with camping pitches and dormitories at a reduced rate of 75p.
It will be up to individual councils whether to adopt the levy if the Visitor Accommodation Bill is passed by the Senedd, with charges possibly coming in from 2027.
Local authorities could also increase charges in future, though it would require ministerial approval and further consultation.
The decision to include children within the tax has faced criticism from hospitality bosses, with trade body UKHospitality Cymrum among those calling for under-18s to be exempt.
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The organisation's executive director, David Chapman previously said: “We need to see them exempt children from the levy, to ensure families, many of whom may already be on tight budgets, can enjoy holidays in Wales, rather than elsewhere."
Finance Secretary Mark Drakeford pushed back on the idea as he appeared before the Senedd's finance committee on the bill.
Mr Drakeford, who argued the fee would be "less than the cost of a cup of coffee", said: "I see that you have heard from a range of voices who argue that particular groups ought to be excluded from the levy," as per BBC News.
"I've said to you from the very beginning that this is a broad-based tax with a low charge, at the low end of what you'll find anywhere else," he added.
"If you narrow the base, the only way you can sustain the take from the tax is to put the charge up."
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Cardiff argues the levy will could raise as much as ￡33m per year and would help fund reinvestment for local areas.
The proposed measure was part of co-operation deal signed in 2021 between Labour and Plaid Cymru, the BBC reports.
But Plaid has since warned that tweaks should be made, with economy spokesperson Luke Fletcher saying exemptions were neccessary to prevent "unintended consequences".
He argues that doing so would ensure that the levy is affordable for larger families, as well as encouraging "opportunities for children, for educational trips, carers, and accompanying adults, and for those needing emergency and temporary accommodation, in line with international best practices", as per the outlet.
But the Welsh Tories have joined some industry figures in saying the tax shouldn't be introduced at all, fearing it could deter visitors.
Welsh Conservative Shadow Cabinet Secretary for Finance, Sam Rowlands MS, previously Express.co.uk: “Labour’s toxic tourism tax will put off visitors to Wales, hamstringing our economy which relies on the industry."
“By Labour’s own figures, hundreds of hospitality jobs per year could be lost and GVA could be hit by over ￡60 million annually," he added.
The Welsh government has said if all local authorities introduced a levy, it could potentially raise as much as ￡33m across the country.
Exemptions will apply, with stays longer than 31 nights not subject to the levy, and it will also not apply to people forced into temporary accommodation or people in homeless hostels.
Officials have argued they want the tax to be easy for visitors to understand, as they defended the flat rate applied to both adults and children.
A Welsh government spokesperson previously said: “Tourism makes an important contribution to the Welsh economy and to Welsh life. We want to ensure its long-term sustainability.
“We have taken a fair approach to application of the levy and the Bill proposes keeping rates low, avoiding the need for more exemptions and nil rates, which would produce significant challenges for both visitors and accommodation providers.
“As set out in the Bill, any money raised would have to be reinvested in the local area to provide and improve services for visitors and residents. The money would be held in a separate account with councils required to publish an annual report to show how any revenue has benefited their local area.”
Jim Jones, CEO of North Wales Tourism Ltd, called the decision "a slap in the face".
He wrote on X, formerly known as Twitter: "The decision to implement a tourism tax that includes charging children, infants, and even babies is nothing short of unbelievable. To state this as a policy, Mark Drakeford, just days after we visited the Senedd, where concerns were raised, feels like a slap in the face to those who took the time to attend and engage in good faith.
"I'm disappointed to learn that this tax would extend to the youngest members of our society. Families who camp, stay in caravans, or opt for self-catering accommodations are already facing enough financial pressures. Adding this additional burden will undoubtedly provoke hostile reactions from visitors who feel unfairly targeted.
"The impact on events like the National Eisteddfod, where families come together to celebrate Welsh culture, will be particularly devastating. Low-income families, already struggling with the cost of living, will be penalised further.
"This policy risks alienating the very people who contribute to the vibrancy of our communities and the success of our tourism sector. It’s time to rethink this approach and listen to the voices of those who will be most affected. Let’s hope common sense prevails before this policy causes irreparable damage."