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(Reuters) – Airbnb’s shares slid 13% before the bell on Wednesday after the top vacation rental firm issued a gloomy second-quarter forecast and signaled that the high cost of travel may be finally catching up to budget-conscious U.S. consumers.

Household savings and pent-up demand have largely insulated the U.S. travel industry from inflationary pressures that have roiled other sectors.

Airbnb, however, said on Tuesday 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 United States,” CEO Brian Chesky said in response to an analyst question during a post-earnings call.

Hilton Worldwide Holdings Inc 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 U.S. with OTAs (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, while cutting price target by $30 to $105.

Airbnb shares were trading at $110.11 before the bell.

(Reporting by Abhijith Ganapavaram in Bengaluru; Editing by Sriraj Kalluvila)