Soaring oil prices driven by the Middle East war are pouring cold water on Korea's booming tourism industry. With fuel surcharges alone adding more than 1 million won ($730) to round-trip airfares from the Americas and Europe, concerns are spreading inside and outside the industry that long-haul first-time visitor demand could be the first to falter.
Record-Breaking Visitor Numbers Expand to Western Markets
According to data from the Korea Tourism Organization released on the 5th, 2.7 million foreign tourists visited Korea in January and February this year, up 19.6% from the same period a year earlier.
Greater China drove the growth. China (up 30.9%), Taiwan (up 53.1%) and Hong Kong (up 55.9%) led the overall increase. Western markets also showed steady expansion. Over the same period, visitors from the Americas rose 7.4% from 194,341 to 208,718, while European visitors grew 15.8% from 113,620 to 131,588.
Industry observers say the Korean Wave — led by K-pop, K-beauty and K-food — is fundamentally reshaping the inbound tourism market, which was previously centered on Japan, China and Southeast Asia. An official at a major duty-free retailer said, "Since the start of this year, visitors from Europe and the United States have noticeably increased, and overall we are seeing a trend of diversifying nationalities."
Last year, Korea welcomed a record 18.7 million foreign visitors, and the target for this year has been set at 23 million. Riding the K-content wave, the inbound tourism market is making strides in both volume and quality.
Jet Fuel Doubles, Triggering Fuel Surcharge Domino
However, the Middle East crisis is holding back that momentum. As international oil prices have surged due to the prolonged war involving the United States, Israel and Iran, Korean airlines have raised April fuel surcharges on flights departing Incheon by up to three times compared with March.
Foreign carriers face the same situation. Cathay Pacific announced a blanket increase in fuel surcharges across all routes starting April 1. Air France-KLM sharply raised fares on long-haul routes and trimmed some services.
Scandinavian Airlines (SAS), a major Nordic carrier, drastically reduced its April flight schedule, cutting at least 1,000 flights. SAS CEO Anko van der Werff said, "Jet fuel prices have doubled in 10 days. This is a direct shock to the aviation industry."
According to the International Air Transport Association (IATA), the global average jet fuel price in the last week of the previous month (the 21st to 27th) was $195.19 per barrel, edging slightly lower. But that remains 96.3% higher than the pre-war level of $99.4 per barrel the month before.
Short-Haul Routes Hold Firm, but Long-Haul New Demand Is the Wild Card
The industry expects limited impact on short-haul markets such as Japan and Taiwan. The absolute cost of airfare is lower, and K-pop fandom drives high repeat-visit loyalty.
The wild card is the Americas and Europe. Fuel surcharges alone now add hundreds of thousands of won to more than 1 million won in extra costs for a round trip. Given that airfares tend not to come back down easily once they rise, long-haul travelers' budgets could tighten further ahead of the summer peak season.
An industry official said, "With inbound demand expanding — including BTS domestic concerts in Goyang in April and Busan in June — the number of foreign tourists visiting Korea will not decline immediately." However, the official added, "If the Middle East war drags on and fuel surcharge hikes continue, demand from long-haul regions such as the Americas and the Middle East could be the first to fall away."