Over the past decade, the hospitality landscape has undergone a profound transformation. At the center of this shift is the meteoric rise of short-term rental platforms like Airbnb and Vrbo, which have redefined what it means to “travel like a local.” These platforms have democratized hospitality, enabling everyday homeowners to offer travelers more than just a place to sleep—they offer a story, a slice of local life, and sometimes, access to the kinds of neighborhood secrets that don’t show up in guidebooks.
1. The Rise of Short-Term Rentals and the Hospitality Challenge
What began as a niche option for budget-conscious backpackers has become a global force with significant economic, political, and cultural influence. Airbnb now lists millions of properties in over 220 countries and regions, catering to solo adventurers, families, digital nomads, and eco-tourists alike. But more importantly, Airbnb hosts are no longer passive actors in the tourism economy—they are emerging as political stakeholders, shaping regulations and lobbying for the future of short-term rentals. Recent legislative battles in cities like New York demonstrate how these hosts, backed by platform companies, are becoming key voices in the policy landscape.
For traditional hotels, this evolution presents a serious challenge. Long governed by star ratings, brand standards, and formal protocols, hotels now find themselves competing with neighborhood apartments marketed as intimate, hyper-local, and community-rooted. Worse yet, the regulatory playing field hasn’t always been level—hotels comply with rigorous safety codes, zoning laws, and labor standards, while many short-term rentals have operated in a legal gray zone. Although recent regulations in major cities are beginning to address this imbalance, enforcement alone isn’t a long-term strategy.
The more compelling and sustainable response lies elsewhere: embracing what made short-term rentals so appealing in the first place—personalization, cultural connection, and the promise of “living like a local.” Ironically, hotels may be even better positioned to deliver on this promise—if they rethink the role of their greatest competitive asset: their people. That front-desk associate who recommends the perfect hole-in-the-wall dumpling shop. The concierge who knows how to get last-minute jazz tickets. The housekeeper who leaves a handwritten note. These moments of magic aren’t algorithmically generated—they’re the product of human capital.
As the battle for guest loyalty heats up, the key differentiator isn’t price or even property type—it’s the community experience. And the frontline warriors? Hotel staff who are trained, empowered, and inspired to make each guest feel like they truly belong.
2. The Strengths and Weaknesses of Airbnb’s Community-Centric Model
Airbnb has built its brand on a seductive promise: belong anywhere. This tagline taps into a growing cultural desire for connection and authenticity. Rather than offering a standardized bed and breakfast, Airbnb markets itself as a lifestyle—a way to immerse in the daily rhythms of local life, guided by hosts who double as neighborhood insiders.
The strategy has been effective. By allowing guests to book homes in real neighborhoods, interact with hosts, and receive personalized recommendations, Airbnb has created a sense of intimacy that traditional hotel chains often struggle to replicate. Peer-to-peer communication, transparent reviews, and narrative-driven listings have all contributed to a product that feels personal, flexible, and uniquely local.
But here’s the tension: community sounds great—until things go wrong.
Airbnb’s decentralized structure is its innovation—and its liability. Because individual hosts manage each property, many without formal training in hospitality, quality control is inherently inconsistent. One guest’s cozy loft may be another’s nightmare of double bookings, poor communication, or unclean accommodations. Unlike hotels, which operate under standardized procedures and accountability structures, Airbnb’s experience varies dramatically based on host diligence, cultural norms, or even sheer luck.
To mitigate this, Airbnb has introduced tech interventions: automated refunds, trust metrics, and safety protocols. But trust isn’t built on back-end systems alone—it’s a relationship. And this is where the platform’s model begins to fray. The recent decision to ban indoor security cameras, even in common areas, sparked debate over guest privacy versus host safety. It also revealed a larger truth: community-building at scale is messy. The very intimacy that defines Airbnb’s appeal also introduces friction, risk, and regulatory scrutiny.
Beyond individual experiences, the platform’s societal impact raises alarms. In many cities, the proliferation of short-term rentals is linked to housing shortages, rising rents, and the erosion of residential communities. What begins as “home sharing” often morphs into de facto commercial real estate. In cities like New York, where regulators have moved to tighten restrictions, the debate centers not just on tourism, but on the soul of neighborhoods.
That said, many Airbnb hosts are thoughtful, community-minded entrepreneurs. But without consistent standards, support systems, or training, the quality and safety of these experiences remain uneven. The brand promise—“travel like a local”—too often depends on chance.
And that’s exactly where hotels can flip the script.
3. Hotels Fighting Back: Human Capital as Competitive Edge
While short-term rentals have captured the cultural moment, hotels are quietly reclaiming their turf—not by copying, but by doubling down on what they’ve always done best: delivering exceptional, human-centered service.
Their secret weapon? Human capital.
In a digital age of app-based bookings and contactless check-ins, the emotional resonance of a warm welcome matters more than ever. That front desk smile, the bartender’s neighborhood tips, or the way housekeeping personalizes a guest’s stay—these micro-moments add up to something no platform can mass-produce: belonging.
The real contest isn’t over buildings or booking interfaces—it’s about people and the experiences they co-create.
Hotels don’t need to mimic Airbnb to stay relevant. Instead, they should cultivate what short-term rentals often promise but rarely standardize: authentic local immersion, delivered consistently through professional, well-trained staff. Imagine a concierge who introduces guests to local artists. A bellhop who shares stories about the historic district. A server who grew up around the corner and knows where to get the best late-night street food.
This isn’t concierge 2.0. It’s place-based storytelling through hospitality.
But these outcomes don’t happen spontaneously. They require design—and discipline. Using evidence-based management (EBM) strategies, hotels can turn human capital into a strategic differentiator. Instead of relying on instinct or legacy practices, they can use data, feedback loops, and experimentation to elevate guest experiences through their staff.
Here are four EBM principles to guide that shift:
- Shrink the Mission:Start small. Pilot hyper-local programs like a “Local Insider” training track or curated neighborhood maps created by staff. Let data and feedback drive what scales.
- Do Not Internalize the Enemy: Don’t fear Airbnb—learn from it. Use their storytelling ethos, but apply it with the operational consistency that hotels already possess.
- Find Your Champions: Every hotel has culture carriers. Identify staff who naturally build community, and give them the platform to lead.
- Use the Science of Persuasion: Show the ROI of people-first strategies. Use guest stories, review data, and internal metrics to communicate the value of human-centered hospitality.
The transformation hotels need is not just technological—it’s philosophical. It’s about shifting from transactional service to transformational hospitality, where employees are treated not just as labor but as curators of local experience and agents of belonging.
In this new era, hotels don’t need to out-tech Airbnb.
They need to out-human it.
4. Tech Can Scale Service, But People Create Belonging
As hospitality rides the waves of generative AI, predictive analytics, and digital interfaces, hotels stand at a crossroads. The choice isn’t between innovation and tradition—it’s about integration. AI can streamline operations, anticipate needs, and personalize suggestions. But it cannot replicate the warmth of a handwritten note or the wisdom of a local recommendation delivered with a smile.
AI can remember your anniversary. But it’s the front-desk agent who surprises you with an upgrade. AI can suggest top-rated spots. But it’s the bartender who tells you where to hear live jazz on a Tuesday.
In this age of instant everything, the most luxurious amenity is still empathy.
To truly compete with short-term rentals, hotels must invest in their people, not just as labor but as a strategic asset. Here’s how:
- Invest in Local Literacy for Staff – Make local knowledge a foundational part of onboarding and continuous staff training. Equip employees with insider insights about nearby neighborhoods, cultural landmarks, independent shops, seasonal events, and culinary gems. This transforms front-line workers into cultural ambassadors who offer guests the kind of authentic recommendations that no algorithm can replicate. When staff speak with pride and familiarity about their city, they create a more profound sense of place that guests remember and return for.
- Design Human-AI Collaboration, Not Competition – AI excels at automating repetitive tasks—checking availability, processing room service requests, or adjusting energy usage. Use it to free up your team’s time so they can focus on the human moments that define exceptional hospitality: welcoming a jet-lagged traveler with empathy, solving a complex guest problem on the spot, or intuitively sensing when someone needs help. Technology should be your staff’s assistant, not their replacement.
- Build Community through Strategic Partnerships – Position your hotel as a cultural hub, not just a lodging provider. Collaborate with local chefs for pop-up dinners, invite neighborhood artists to exhibit their work in your lobby, or partner with nearby entrepreneurs for curated guest experiences. These partnerships enrich the guest’s stay while strengthening the hotel’s role in the community ecosystem. When your hotel becomes a bridge to the city, guests feel like insiders, not outsiders.
- Measure What Matters – Don’t stop at occupancy and revenue metrics. Track how often local recommendations are used, monitor the feedback on staff-led experiences, and survey guests about their sense of connection to the destination. Use these insights to refine training, guide partnerships, and build a culture where community connection is not just a bonus—it’s the brand.
In a world where platforms promise belonging at scale, hotels must deliver it—genuinely, consistently, and humanely. The future of hospitality doesn’t lie in outcompeting short-term rentals on price or novelty. It lies in delivering something deeper: community, care, and connection.
The hotels that will win aren’t the ones with the flashiest apps or trendiest rooftop bars. They’re the ones that empower their people, celebrate their place, and make every traveler feel like a local—even if it’s their first time in town.
Reprinted from the Hotel Business Review with permission from www.HotelExecutive.com.
