--- title: "Fuel Surcharges Are Soaring. Here's What It Means for Your Property" description: "Lessons from COVID and the second balloon. April 2026. Oil prices are spiking. The balloon is inflating again. Geopolitical instability in the Middle East is rocking global oil markets, and international fuel surcharges just jumped from level 6 to level 18 in a single month. Airfares to the Americas and Europe are up double digits year-over-year. Korean Air's one-way fuel surcharge to the U.S. alone..." published: 2026-04-24T09:00:00+00:00 author: "ONDA 편집팀" category: "Insights" image: "https://zqcfqfqgiyckyhazcfrk.supabase.co/storage/v1/object/public/blog-images/webflow/6316f3f75130788ec2d762dd/69fd927b4edbae5dd45b94de_2026-04-24-img1-_.png" canonical: https://global.onda.me/en/blog?slug=balloon-effect-on-korea-accommodation-market locale: en --- # Fuel Surcharges Are Soaring. Here's What It Means for Your Property ## Lessons from COVID and the Second Balloon April 2026. Oil prices are spiking. The balloon is inflating again. Geopolitical instability in the Middle East is rocking global oil markets, and international fuel surcharges just jumped from level 6 to level 18 in a single month. Airfares to the Americas and Europe are up double digits year-over-year. Korean Air's one-way fuel surcharge to the U.S. alone has crossed ₩300,000 (Korean Air, Apr 2026). For a family of four flying roundtrip to the States, fuel surcharges alone hit ₩2.4 million — total ticket cost easily tops ₩10 million. With that kind of money, you could rent a pool villa in Jeju, eat out three meals a day, and stay over a week. Families canceling overseas trips are quietly typing new searches: _domestic pensions. Jeju pool villas. Gangwon-do private stays._ This scene feels familiar. ## Three Corners of the Balloon Are Being Squeezed at Once The balloon effect is simple. Press one side, another side bulges. In travel, this principle repeats with eerie precision. **Corner 1: Outbound.** Middle East instability. Oil price surge. Airfare spike. Outbound demand shifts domestic. **Corner 2: Inbound.** 2025 saw a record ~19 million foreign visitors to Korea (Korea Tourism Organization), and Q1 2026 alone welcomed 4.76 million, up 23% year-over-year (Ministry of Culture, Sports and Tourism, Apr 2026). Seoul hotel average daily rates (ADR) hit ₩198,000 in 2024 — a 58% jump from 2019 (Mastern Investment Management). Three-star properties rose 85% to ₩162,000. But hotels take ~5 years from permit to opening. Seoul's room shortage will persist through 2029 (Asia Economy, Feb 2026). Demand explodes while supply stands still. Priced-out domestic travelers spill into Gyeonggi-do, Gangwon-do, and regional markets. **Corner 3: Substitution.** When Seoul gets expensive, regional hotels fill up. When hotels get pricey, pensions boom. When pensions surge, guesthouses become trendy. Demand doesn't vanish. It relocates. All three corners are being squeezed simultaneously. My property should benefit, right? ## But — This Balloon Popped Last Time I watched the entire cycle play out on the ground. Six scenes stick with me. ### Scene 1. Freeze Early 2020. COVID hit. The market froze solid. Fear of an unknown virus kept everyone indoors. Every accommodation — hotels, pensions, guesthouses — saw bookings vanish. The industry cut staff and locked the vault. ### Scene 2. Rise of the Private Villa The first properties to thaw were **private stays**. Pool villas and standalone pensions — places where families could isolate without human contact — started taking bookings again. Non-contact demand. Families who once took kids abroad gladly paid villa rates matching international trip budgets. ### Scene 3. The Era of the Yard Tub As private villas heated up, prices climbed. ₩500,000/night for a weekday villa became normal. Families who used to take weekend trips with kids couldn't keep up. Where did they go? **Old pensions with a big tub in the yard.** As long as the kids had somewhere to splash, it worked. Decades-old pensions stuck a plastic tub or kiddie pool in the yard and started filling bookings. And those bookings filled. The balloon effect had trickled all the way to the bottom. ### Scene 4. The Birth of the "Hocance" Meanwhile, Seoul hotels faced a different problem. Properties that relied on foreign guests took the hardest hit. To survive, they slashed rates and bundled packages — breakfast + room + amenities at prices young Koreans could afford. That's when the term **hocance** (hotel + vacance) went mainstream. The word existed pre-COVID. But when hotels repositioned for survival and consumers swarmed that repositioning, the word became a travel category. ### Scene 5. Developers Enter the Chat News spread that even yard-tub pensions were filling up. Capital from outside the industry poured in. **Construction firms and developers started building pool villas.** Gangwon-do, Jeju, Gapyeong, Gyeonggi outskirts — even Namhae and Tongyeong. Simultaneous nationwide buildout. Individual owners rushed to keep pace: expansions, renovations, staff hires, price hikes. "This demand is permanent." That belief guided every decision. ### Scene 6. Pop After nearly two years of waiting, COVID restrictions lifted. Overseas travel reopened. And right at that moment, **all the pool villas that broke ground during early COVID flooded the market at once.** Demand dropped. Supply surged — years' worth hitting the market simultaneously. The outcome was inevitable. Vacancy rates spiked. ADR plummeted. Discount wars erupted. And owners who had ramped up fixed costs during the boom now faced cash flow crises as bookings dried up. The biggest casualties weren't the developers. Professional capital could absorb losses and exit. **The hardest hit were individual owners who overextended during the surge.** Sadly, many are still dealing with the aftermath. ## The Formula The six scenes above distill into a formula: > External shock → Outbound demand shifts → Private villas/pensions surge → Even budget alternatives benefit → Outside capital enters → Supply glut → Demand normalizes → Price collapse One step never skips: **supply glut.** When demand heats up, supply follows. Supply arrives late and stays long. ![](https://zqcfqfqgiyckyhazcfrk.supabase.co/storage/v1/object/public/blog-images/webflow/6316f3f75130788ec2d762dd/69eecd835d3abcf0eb606abc_2026-04-24-img2-two-balloons-comparison.png) Will this balloon be different? One thing is different. This balloon is inflating **on top of existing oversupply** from the last cycle. Last time, demand came before supply. This time, supply is already sitting there. This difference could change how this balloon behaves. Even if demand shifts, existing properties absorb it first. The balloon might not inflate as much. But opportunities still exist. How you **operate** in front of this new wave of customers will determine wildly different outcomes. ## Standing Before the Balloon I'm not here to tell you "now is the time to invest." After 18 years in hospitality, I'll say this: **the riskiest move right now is betting fixed costs on short-term demand.** Balloons under extreme pressure always pop. The question isn't when they pop — it's **where you're standing when they do.** Pool villas you expand now will complete right when the balloon pops. Staff you hire now won't cost less when bookings drop and ADR falls. OTA dependency you increase now to capture one more booking will return as commission and ad spend burdens when the balloon deflates and you need to cut costs. We know where people who believed "this demand is permanent" in 2020 were standing in 2023. Not standing there again. That's the most important principle for navigating this balloon. ## Next Time The balloon is being squeezed from multiple sides again. Eventually, it will pop. In between, there are opportunities. How to capture those opportunities **with a structure that survives the pop.** Fixed cost management. Investment limits. Building sustainable brands instead of chasing short-term bookings. I'll cover the **principles** drawn from 18 years in the field in Part 2. **A property that doesn't inflate with the balloon and doesn't collapse when it pops.** That's the goal. --- ⚠️ All rights reserved. Cite this piece as 'ONDA (온다)' when quoting.