Airbnb has created an interesting value proposition for consumers. On the one hand, with its ostensibly cheap nightly rates and its myriad of product offerings, the site has opened up a new travel niche (alongside Craigslist) by freeing more people to travel where budget might be the major factor and allowing guests to experience a city from a completely different vantage point than a hotel. Yet on the other hand, the company has been stealing business from certified room providers — hotels!

So successful is Airbnb that it now has a multibillion-dollar valuation and more than 250,000 worldwide listings, not to mention the fact it is pushing 200,000 bookings per month. But alas, the envy of hoteliers near and far is finally coming under fire with the recent announcement that New York City has deemed the website illegal. Citing Airbnb’s prominent flaw insofar as NYC room providers must be licensed — a license granted by abiding to strict regulations that uphold guest safety and privacy, among other things — this is a definite victory for hotels.

Outside America’s most populous metropolis, Airbnb is still alive and well, and if the snail pace of government legislature is any indication, don’t expect similar action anytime soon. So, in the meantime, how do you, as a wholly accredited provider of guestrooms for third-party persons, fight back against this interloper?

The first item to note is that this does not concern those hotels whose clientele do not predominately overlap with the intended audience for Airbnb. That is, 5-star, ultra-luxury, boutique or nearly any properties with an ADR above US$200 per night need not be all that concerned about potential incursions from this company.

Aside from the appeal of huge savings in travel expenses, Airbnb lures consumers in by selling the prospect of an intrinsically unique experience, and it’s hard to see its product offerings as anything else. Each listed “room” has been customized and furnished in a style distinctive to its owner, much unlike what many should consider the stock guestrooms in hotels. Additionally — and this speaks more to its urban fare — the website’s listings may crop up in far more obscure and possibly adventurous neighborhoods than hotels, which tend to congregate around downtown and the airport (a gross generalization, but work with me).

So, step one would be to imitate the supposed authenticity that Airbnb tenders. One method to this end is to tailor guestrooms with individualized furnishings, arrangements and names so they feel slightly different from one another. Then again, part of good branding is delivering a consistent product, so this might not be ideal, especially when considering the costs of such physical modifications. There are easier ways to conjure the verisimilitude of an authentic local experience, and they largely revolve around staying in touch with what your community has to offer and steering your patrons with insider tips and guidance on neighborhood traditions.

Beyond attempts at replication, though, there is one cardinal advantage for which Airbnb cannot hope to supplant certified room providers: service. This is what people pay for — your readiness to help, your soft smile and the comfort of knowing there are people to alleviate their worries of being alone in an unknown land. Airbnb has none of that, only whatever assistance a person can scrounge off Google searches. And so, I implore you to make your guest services as fantastic as possible, because this will be the key differentiator between you and third-party usurpers that emerge in this digital era of competition.

(Article published by Larry Mogelonsky in HOTELSmag on July 29, 2013)