Although the Labor Day holiday, China’s representative peak tourist season, has begun, demand for overseas travel has not risen as expected. The aftermath of instability in the Middle East, such as a surge in international flight cancellations, seems to affect the overall aviation and tourism markets.

According to Chinese media such as Hong Kong media Myeongbo on the 2nd, the total number of flights across China during this year’s Labor Day holiday (May 1-5) was 85,285, up 5.25% from the previous year.

Although the overall size of operations has increased, the situation of international flights is in contrast. Of the 9,827 international flights, 785 were canceled, with a 7.4% cancellation rate. This is twice the level of last year (3.6%). In particular, the cancellation rate of international flights operated by Chinese airlines exceeded 10%, showing a higher level.

Cancellation routes were concentrated in the Middle East, Southeast Asia, East Asia, and the Pacific. Representative tourist routes such as Xi’an-Puket, Chongqing-Puket, and Yantai-Bangkok have been suspended one after another, and low-cost airlines (LCCs) have also reduced or suspended flights to Southeast Asia from China. Some Chinese airlines reportedly reduced their flights to Southeast Asia by ‘system adjustment’ or individual notification instead of official notifications.

The industry points to a surge in aviation oil prices caused by the war in the Middle East as a key reason. Analysts say that since it is difficult to offset the rise in fuel costs with an increase in air ticket prices, the reduction of fuel costs is being made mainly on low-profit long-distance routes.

Unrest in the international situation is also affecting travel demand. Chinese media reported that the number of overseas travel reservations decreased by about 30% compared to the previous year, especially in South Asia. Some routes, such as Sri Lanka and Nepal, which operated about four flights per week, have plummeted from weekly flights to one per month.

On the other hand, domestic travel demand is rather expanding. China’s transportation authorities forecast that 1.5 billion people will move during the holiday season. It is explained that demand is flocking to domestic travel, where the cost burden is relatively low amid the economic slowdown.

In particular, small city travel outside of large cities is emerging as a new trend. The reservation rate for small-town tourism products such as Pingtan, Fujian Province, Anji, Zhejiang Province, Yangshu, Guangxi Zhuang Autonomous Region, and Ribo, Guizhou Province, increased by more than 100% compared to the previous year.