Tourism products vary in their direct and indirect (supply chain) water use, as well as in their economic contribution. Hence, water-scarce destinations require a method to estimate and compare water use intensity (water use in relation to economic output) for different kinds of tourist products in order to optimise their tourism offering. The present study develops an original framework that integrates segmentation with an environmentally extended input–output (EEIO) framework based on detailed tourism expenditure data and tourism satellite accounts (TSAs) in order to quantify the total (direct and indirect) economic impact and water use for multiple tourism segments. To demonstrate the rigour of the methodology, it is applied to the eastern Mediterranean island of Cyprus. The results show that cheaper forms of tourism tend to have a significantly lower total water use and, depending on the economic impact indicator of interest, may have above-average economic contribution per unit of expenditure. The proposed framework provides a significant step towards achieving sustainable water use through destination-specific estimates of water use intensity which take into consideration segment-specific attributes. It is envisaged that this could eventually lead to customised interventions for diverse tourism market segments.