Wollongong Lord Mayor Gordon Bradbery has voiced his support for a possible "bed tax" in tourist areas to help councils offset the cost of infrastructure and services for holidaymakers.
The issue was raised this week after Local Government Minister Don Page admitted infrastructure in many popular tourist towns in NSW could not cope with the influx of visitors during the holiday period.
Mr Page used his experience in his home town of Byron Bay to highlight the problem, saying he was astounded at the amount of rubbish on New Year's Day.
"If there were bins, they were overflowing," he said.
On Thursday, Mr Page said a bed tax was one answer.
"The reality is that the infrastructure can't cope and the question is: 'What do we do about it?' A bed tax is definitely an option."
Cr Bradbery said Wollongong Council spent a considerable amount of money each year on facilities used by tourists, the most prominent being beach maintenance and lifeguard services.
"A small levy on each bed, in a cumulative way, would help us offset our costs. We could also put the money towards providing better amenities," he said.
Proposals for a bed tax, which have long been controversial - and rejected - would meet staunch opposition from the accommodation industry.
The Accommodation Association of Australia, which represents businesses from bed and breakfasts to hotel chains, said a bed tax would lead to job losses and have a significant impact on domestic tourism.
"Domestic tourism just couldn't afford to have this sort of tax at the moment," chief executive Richard Munro said.
Destination Wollongong general manager Mark Sleigh said the recently released Visitor Economy Taskforce report, considered a seven-year blueprint for the NSW tourism industry, did not mention a bed tax.