Airbnb's shares slid 12% on Wall Street today after the holiday rental firm issued a gloomy second-quarter forecast and signaled that the high cost of travel may be finally catching up to budget-conscious US consumers.
Household savings and pent-up demand have largely insulated the US travel industry from inflationary pressures that have roiled other sectors.
Airbnb, however, said it expects fewer bookings and lower average daily rates, or accommodation prices, in the second quarter.
"What we're seeing is that people are most price-sensitive, at least currently, in North America, especially in US," CEO Brian Chesky said in response to an analyst question.
Hilton Worldwide Holdings last month indicated that pent-up travel demand that helped the hotel operator boost its annual profit outlook may run out of steam in the second half of 2023.
The resiliency of travel demand has been closely watched by investors amid fears that the recovery over the past year may hit a macro-economic speed bump.
Some airlines and hotel operators have resumed investor returns in the past few months, as higher prices boosted profits.
But average daily rates during Airbnb's first quarter was flat year-on-year at $168, after rising 5% a year earlier.
"We believe Airbnb's commentary will result in increased caution in the travel space, but more specifically around vacation and the US with online travel agencies better insulated overall," JPMorgan analyst Doug Anmuth said.
Some analysts say accommodation prices may now need to go down further.
"While Airbnb believes it is supply constrained, it will have to compel hosts to cut prices in order to improve demand," RBC Capital Markets analyst Brad Erickson said in a note.
