One of the measures being adopted to deal with the water shortage is to put up the price of water in the hope that high consumers in particular will use less. Palma is one municipality where there are to be increased tariffs for high domestic consumers and also for hotels. However, researchers at the University of the Balearic Islands are not convinced that putting up price is an effective way of reducing hotel water consumption.
A study published in a recent issue of the journal Water Resources Research was conducted by researchers at the university's geography, business economics and applied economics departments. It considered the elasticity of demand for water by 134 hotels in fourteen Majorcan municipalities. The price of water varied substantially between municipalities.
Through an econometric model, the study concluded that a one per cent increase in the price of water led to a reduction in use of 0.024%. So low was this reduction that it was barely possible to attribute it to a rise in price.
The researchers argue that water consumption depends on hotel management and on guest behaviour. For the most part, guests don't think about either the price of water or about their usage. The study also suggests that the cost of water is small compared with other costs that hotels incur.
The article calls for investment in initiatives aimed at saving water, believing these to be more effective than via price increases. It highlights measures such as the redesign of gardens in order to lower water consumption and water recycling.