I have watched the success that is the Albion over the past few years, and the refurbishment of most of Conwy pubs - not to mention the opening of a new one, The Bank, at a time when many pubs are closing. I have given the matter due consideration and several moments thought as to the difference between Conwy and Llandudno and my conclusion is the same as yours - price - but from a different angle. The local trade from the relatively affluent rural and semi-rural Conwy area are not so price oriented as 'ambience' oriented; they want a pleasant pub experience, not simply the cheapest. Plus, the average visitor to medieval Conwy is possibly rather different to the average Llandudno visitor, a walker, hiker, history buff or someone who appreciates the 'quaintness', and is prepared to pay for it. Many tourists are foreign and find the prices acceptable. They are, like you and I on holiday, prepared to pay for the nicities in life and the Albion is a bit like a working museum, a feeling of nostalgia for the wood floored pubs of 'Olde'. The boat owners from the marina are another source, and you don't own a boat and berth it in Conwy marina if you are in any way price concious. All of which differ from Llandudno, whose resident population and visitors are possibly far more price conscious, shall we say, and look at price first and quality second; ambience perhaps not of the importance that it possibly is to Conwy clientele.
So, in all, we agree, sadly, the Albion business model might not work in Llandudno.