Impact of inflation on the demand for hotel services in Kosovo

The term Inflation means a process of continuous increase in the prices of goods and services and a decrease in the purchasing power of people.The indicator that serves to measure inflation is the Consumer Price Index (CPI), that is, the consumer basket that includes the costs that people make to buy the most important products that are necessary for the family, monitored over time.The costs for this basket at a given time expressed relative to the base period represent the consumer price index (CPI).The percentage change in the CPI over the specified period relative to the base period is consumer price inflation.Inflation inevitably affects the operation of all activities and branches.Therefore, tourism and hospitality industry are no exception.Inflation affects the reduction of the purchasing power of the population, so in the conditions of inflation, people try to reduce the expenses in the family by completely giving up or reducing the purchase of products and services that are not necessary for them.All of this on the one hand, and on the other hand the increase in prices in accommodation and catering facilities, additionally influences people to reduce the number of tourist trips, to choose closer and cheaper destinations for tourist trips or to completely give up on tourist trips.In order to determine whether inflation in Kosovo affects the change in the tourist travel habits of the population, an online survey was conducted that included 200 residents of Kosovo.The data from the survey was processed with the SPSS system using the methods of linear regression and correlation, with inflation and the prices of hotel services as independent variables, and travel within the country and the use of hotel services in Kosovo as dependent variables.Applying the Chi-square test shows the existence of a significant difference between domestic tourism trips in Kosovo in 2015 and 2022 (Chi square value of 4.927; degree of freedom 1; two-sided asymptotic significance is 0.026), as well as the existence of a significant difference between the use of hotel services by the domicile population in Kosovo in 2015 and 2022 (the obtained Chi square value of 44,444;degree of freedom 1; the two-sided asymptotic significance is 0).The research also showed that inflation inevitably leads to an increase in the prices of hotel services (correlation coefficient 0.959; coefficient of determination 0.920, B = 0.617, p = 0), and an increase in the prices of hotel services leads to a decrease in the use of hotel services.by the domicile population (correlation coefficient -0.807, coefficient of determination 0.651, B = -0.568,p = 0).Inflation also affects the decrease in the number of domestic tourist trips (correlation coefficient -0.859, coefficient of determination 0.738, B = -0.389,p = 0).Based on that, it can be concluded that the negative impact of inflation on both domestic tourist trips and the use of hotel services by the resident population is huge.