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Councillors in Edinburgh have voted for the introduction of a tourist tax with the aim of raising up to £50m ($65m/€59m) per year.
It means that Edinburgh will become the first Scottish city to charge a levy on stays with profits used to fund improvements of public spaces.
The charge will cover hotels, B&Bs, self-catering accommodation and properties let through websites such as Airbnb.
The vote in favour of draft proposals begins a 12-week consultation period that will be launched in the autumn.
It will see residents asked whether a 5% charge should be higher or lower.
The Scottish Greens proposed raising the additional tax to 8%, with plans to implement it in time for the end of summer in 2026.
Council leader Cammy Day said that £5m would be devoted to housing while 35% would go into the arts sector.
“It’s equivalent to a few pounds worth of a cup of coffee,” Day told the BBC.
“The evidence that we’ve done and research from across the world shows a levy has no impact on tourism.
“People don’t come here to see the insides of hotel rooms, people come here to see the world heritage centre, the castle, the palace, the hills, the sea around the city, the amazing capital that we are.
“I can’t see a few pounds putting somebody off visiting the city. If you can afford to spend hundreds of pounds on a hotel room, you can afford a few pounds to support the city that you are visiting.”
Earlier this year, the historic Italian city of Venice introduced a tourist tax designed to combat excessive tourism.
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