"Paying an Extra One Million Won, America Is Out of Reach"... Soaring Fuel Surcharges Drive Travelers to Domestic Hotels

As the Middle East conflict triggered by U.S. and Israeli attacks on Iran continues, international fuel surcharges have soared, prompting a shift in travel demand from overseas trips to domestic destinations.

Jeju Airport is bustling with tourists and other arrivals. Photo by Yonhap News

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According to the travel and accommodation platform Yanolja on April 26, the number of overseas accommodation bookings from April 1 to 23 was only 75% of the February total, a decline from 82% in the same period last year. However, domestic accommodation bookings reached 107% of the February figure, up from 103% last year, showing an even larger increase. Analysts attribute this trend to the surge in international fuel surcharges, which has caused international travelers to turn to domestic destinations.

In fact, the highest fuel surcharge tier, Level 33, was applied to tickets issued for May. For long-haul routes, the fuel surcharge has increased more than fivefold in just two months, and as oil prices remain high, there are concerns that not only fuel surcharges but also ticket prices may rise further, dampening travelers' willingness to go abroad. For example, for a round-trip ticket to Da Nang, Vietnam on Korean Air, the fuel surcharge jumped from 60,000 won in March to 195,000 won in April and will rise further to 360,000 won in May. For long-haul routes to destinations such as New York and Chicago, Korean Air's fuel surcharge alone has soared to 564,000 won. As a result, bookings for long-haul tour packages to North America and Europe from major travel agencies have decreased by about 40% compared to the previous year.

Meanwhile, occupancy rates at domestic hotels and resorts have risen. Hanwha Resort's average occupancy rate in April increased by 8 percentage points year-on-year. By region, Gyeongju saw a 21 percentage point surge to 96% compared to one year ago, followed by Jeju (up 16.2 percentage points), Daecheon (up 13.5 percentage points), and Haeundae (up 8.8 percentage points). Kensington Resort Gyeongju and Seogwipo, as well as Kent Hotel Gwangalli by Kensington under Eland Park, saw their April booking rates jump 30-40% year-on-year. The booking situation for next month is similar. Major travel destinations like Haeundae (87.9%) and Gyeongju (82.5%) have already surpassed last year's actual occupancy rates. In particular, the average booking rate at all Kensington Resort locations during the golden holiday period from May 1 to 5 has exceeded 90%, and major hotels and resorts are expected to be fully booked.

Resorts in the Gangwon region are also seeing summer peak season bookings fill up faster than last year, as improved accessibility and travelers' preference for natural environments are driving up the number of visitors seeking longer stays.

Urban and metropolitan areas are experiencing similar trends. According to Josun Hotels & Resorts, The Westin Josun Seoul has maintained a room occupancy rate of around 90% this month, while L'Escape, Four Points Josun Myeongdong, and Four Points Josun Seoul have recorded rates between 85% and 93%. Incheon Yeongjongdo Inspire Entertainment Resort's room occupancy rate (OCC) in the first quarter of this year rose by 10 percentage points year-on-year.

Industry experts predict that if high oil prices continue through the summer peak season, domestic travel demand will only increase further.

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