The Effect of Service Quality on Customer Retention: Insights from Travel Agency Managers in the KRI

This research, grounded in relationship marketing (RM) theory, investigates the relationship between service quality and customer retention in Kurdistan Region of Iraq (KRI) travel agencies. Travel agencies have realized they cannot compete effectively in the market without retaining existing customers. The purpose of this study is to shed light on the dimensions of service quality and investigate their impact on customer retention. Purposive sampling was used to select 353 respondents from KRI travel agency managers. A quantitative approach, via a survey questionnaire, was employed for data collection, using partial least squares structural equation modelling (PLS-SEM). The data indicates that the service quality dimensions of tangibility, assurance, and empathy have a significant positive direct effect on customer retention, whereas reliability and responsiveness do not. The study’s findings contribute to the literature on customer retention and service quality in the travel and tourism sector. The findings suggest that agencies should adopt hybrid models rather than relying solely on traditional travel agencies (TTAs) or online travel agencies (OTAs). Agencies that use both online and traditional methods tend to succeed more than those that use just one. This study ultimately addressed some shortcomings and proposed recommendations for further research.