Demand for overseas travel has not weakened despite higher airfare costs driven by surging international oil prices following the Middle East conflict, industry data showed. Instead, travelers are choosing closer destinations, shifting from long-haul Europe and Americas packages to short-haul trips to Japan and China, where total travel costs are relatively lower.
According to the travel industry on Wednesday, package travelers sent abroad in April by three major travel agencies — Mode Tour, Hana Tour and Yellow Balloon — rose 5 to 10 percent from a year earlier. The figure refers to the number of travelers sent overseas through package products. While overall package demand grew, regional trends diverged. Travelers heading to Japan jumped 30 to 40 percent year-on-year, while those bound for China rose around 30 percent. In contrast, Europe-bound travelers fell about 15 percent, and travelers to the Americas and the South Pacific dropped roughly 40 percent.
Short-haul demand was concentrated in Japan and China. Mode Tour's April package travelers to Japan rose 47 percent year-on-year, with China up 31 percent. Hana Tour also saw travelers to Japan and China rise around 30 percent each. At Yellow Balloon, Japan accounted for 27 percent of total overseas package customers, China 25 percent and Vietnam 25 percent, reflecting a heavy weighting toward short-haul destinations.
Long-haul packages to Europe and the Americas, however, faced airfare burdens that hampered demand recovery. The international fuel surcharge rose to level 18 in April, adding price pressure on long-haul routes. For Korean Air international flights departing from Incheon, the April fuel surcharge reached up to 303,000 won one-way. On a round-trip basis, that adds about 600,000 won on top of the airfare. Europe and Americas packages also involve longer stays than Japan and China trips, adding to lodging and meal expenses.
Airfare burdens grew further in May, as the international fuel surcharge climbed to level 33 for the first time on record. While the level falls six notches to 27 in June, long-haul routes still carry one-way fuel surcharges in the 400,000 won range. Even with the one-way airfare burden easing by about 110,000 won from May, the industry sees little chance of a near-term reprieve for Europe and Americas package prices.
"Rather than overseas travel demand weakening, the trend toward choosing nearby destinations has strengthened due to airfare and local living-cost burdens," a travel industry official said. "Even with fuel surcharges coming down somewhat, long-haul products still carry a heavy total travel-cost burden, so the concentration in short-haul packages to Japan and China is likely to continue for the time being."
