Your friend Kazu was supposed to come visit you from out of town, but he cancelled his trip. You told your friend Jamie, who knows Kazu. She says this to express her disappointment.
Oh, that's too bad.
"Oh" is something people say when they hear new information that they didn't know before.
"That's too bad" is a common phrase that you say when you hear about something that's a little disappointing. Use this when someone tells you that they can't make it to an event, when someone doesn't win a competition, when something that a person wanted to buy is sold out, and so on.
The disappointing event should be something that's not too serious. For more serious negative events, use something like:
I'm so sorry to hear that.
(This is a slang expression used mostly by young people talking to other young people)
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