The Role of Tourist Satisfaction and Price Sensitivity in Driving Competitive Sustainability for SMEs in the Indonesia Tourism Sector

Tourism have a significant role in global economic development and is a key driver of sustainable development, particularly in developing countries like Indonesia. This study examines the relationship between tourist satisfaction, price sensitivity, and competitive sustainability within the context of Small and Medium Enterprises (SMEs) in Indonesia's tourism villages. Using a quantitative approach and structural equation modeling (SEM) with SmartPLS, the study analyzes data from SME actors in tourism villages. The findings reveal that tourist satisfaction positively influences competitive sustainability by fostering loyalty and repeat visits, which enhance the long-term viability of tourism destinations. Similarly, price sensitivity significantly impacts competitive sustainability, emphasizing the importance of strategic pricing in fostering competitiveness in the tourism sector. These results underscore the necessity for SMEs to prioritize service quality and adopt effective pricing strategies to remain competitive and sustainable in the evolving tourism industry. The study contributes to the literature by highlighting the interconnected roles of satisfaction and pricing in achieving sustainable competitive advantage for tourism SMEs.