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The Decomposition Analysis of Tourism Water Footprint in Taiwan: Revealing Decision-Relevant Information

Tourism water consumption reflects the dynamics between the visitation volume, economic structure, and water use technology of a destination. This paper presents a structural decomposition analysis that attributes changes of Taiwan’s tourism water footprint into the demand factors of total consumption and purchasing patterns, and production factors of the industry input structure and water use technology. From 2006 to 2011, Taiwan experienced a 48% growth in visitor expenditures and a 74% surge in its water footprint. Diseconomies of scale were observed, with a 1% increase in consumption leading to a 1.5% increase in the tourism water footprint. A strong preference by visitors for water-intensive goods and services and a changing economic structure requiring more water input for tourism establishments and supply chain members contributed to this worrisome pattern. The water requirements received only a minimal offset effect with technological improvements. Decoupling tourism water consumption from economic output is currently unattainable.