Analyzing the relationship between pricing strategy and customer retention in hotels: A study in Albania

Abstract

Background: In the consumer-centric global economy of the 21st century, customer retention is a vital concept in the hospitality industry for building and sustaining long-term relationships. Recognizing the challenges of acquiring new customers, the industry acknowledges the significance of retaining existing ones. To achieve their goals, hospitality businesses need a comprehensive strategy that extends beyond price targets, emphasizing the development of effective pricing strategies from the outset. Methods: Data collection took place between June 2022 and January 2023, involving a random sample of seven international hotels located in Tirana, Durres, and Vlora. Quantitative data was collected through surveys utilizing Likert-scale questions. Statistical analysis, including crosstab tests, was employed to explore the relationship between economy pricing strategies and customer retention. Results: The study encompassed 572 participants representing diverse demographic characteristics. Analysis revealed a statistically significant positive relationship between economy pricing strategies and customer retention in international hotels in Albania. These findings underscore the importance of implementing effective pricing strategies to enhance customer loyalty and guide the development of improved strategies within the hotel industry. Conclusions: This study provides empirical evidence of a significant positive relationship between economy pricing strategies and customer retention in international hotels in Albania. Effective pricing strategies play a crucial role in fostering customer loyalty. However, the study's limitations, primarily its focus on specific hotels in Albania, call for further research to validate the generalizability of these findings. The insights gained from this study inform policymakers and industry stakeholders in formulating strategies to enhance customer retention within the hospitality sector.