Fuel Surcharges Surge Fivefold... Peak Travel Season Sees Rush for Short-Haul and Package Bookings

Package Tour Bookings for July and August Rise Year-on-Year
Discount Promotions Offset Record-High Fuel Surcharges
Middle East Conflict Expected to Significantly Impact Demand Over the Next 1–2 Months

Starting this month, as fuel surcharges for airlines departing from Korea have risen sharply, dampening travel sentiment, the travel industry is mobilizing all kinds of promotions to respond. With the peak travel season of July and August approaching and signs that the Middle East war may be prolonged, it has become more important to reduce the burden of fuel surcharges and lower the perceived price for travelers within the next one to two months.

According to the industry on May 12, as of the first week of this month, package tour reservations (based on departure) for July and August increased by 10% year-on-year at Modetour, and Kyowon Tour saw a 20.4% rise. Hana Tour, the industry leader, reported that package tour reservation rates for July and August are currently at a similar level to last year.

By region, Modetour stated that China accounted for 22% of all package tour reservations for July and August, ranking first. Japan and Vietnam followed, with steady bookings, and even Europe, a representative medium- to long-haul destination, ranked fourth in reservation share, demonstrating significant interest. This month, short-haul destinations such as China and Japan, which saw concentrated demand during the golden holiday period, are also drawing attention for the summer peak season.

An industry official said, "Typically, short-haul products have a short lead time from reservation to check-in, but due to the fuel surcharge issue, even short-haul bookings are being made earlier, and we are seeing demand for early ticket purchases. In this month, when fuel surcharges have risen sharply, new demand for the peak season is expected to slow down."

In fact, the travel industry is on high alert ahead of the peak season. As this is the time when recruitment for July and August travel products should be in full swing, the record-high fuel surcharge is expected to have a significant impact. For airline tickets issued this month, the highest fuel surcharge level—level 33—applies. This is the first time level 33 has been applied since the introduction of fuel surcharges in 2016. Compared to last month (level 18), the surcharge has jumped 15 levels in just one month.

For major domestic carrier Korean Air, international routes between Incheon and cities such as Shanghai, Beijing, Tokyo, and Okinawa saw one-way fuel surcharges jump from 21,000 won in March to 102,000 won in May—a more than fivefold increase. On the longest routes, such as Incheon to New York and Chicago, the surcharge soared from 99,000 won in March to 564,000 won in May.

As a result, travel packages that include relatively inexpensive airline tickets, which are secured in advance and less affected by fuel surcharge increases, are drawing attention. In addition to operating promotions such as offering discount coupons or providing travel agency mileage, card company discounts are also being widely offered.

Hana Tour is selling "Fuel Zero" special packages for major destinations such as Zhangjiajie in China, Fukuoka in Japan, and Sydney in Australia until May 20, which do not reflect the increase in fuel surcharges. Modetour is holding a "Fixed Price" promotion, gathering products that are unaffected or minimally affected by fuel surcharge or exchange rate fluctuations.

Kyowon Tour is running a "Special Overseas Travel Price Retention" campaign, which allows travelers to depart at the original reservation price even if the fuel surcharge is increased. Nol Universe is also holding an event offering discounted airline tickets to destinations such as Japan, China, Vietnam, and Thailand. An industry official explained, "Inquiries and reservations related to special overseas travel promotions are increasing, with new demand focused on products that use foreign or low-cost carriers, or those with relatively lower price burdens compared to long-haul destinations."

The industry expects that travel demand will change rapidly depending on the Middle East conflict, which determines the fuel surcharge. If the war heads toward a cease-fire and the situation stabilizes, oil prices could stabilize, making a reduction in fuel surcharges possible. There are high expectations that a drop in fuel surcharges would lead to a sharp recovery in travel demand. However, if the conflict is prolonged, there are concerns that high fuel surcharges will persist, negatively impacting travel demand.

This content was produced with the assistance of AI translation services.