Unlicensed accommodations represent a growing change in the hospitality industry. Hotels must now face a new competitor in the form of anyone with a free room and access to websites like AirBnB. However, consumers must also understand how the two services now differ in terms of expectations, regulations, and more.

For those who don’t know, the new websites allow property owners, or sometimes just those on lax leases, to list their vacant rooms for lodging. There are certain expectations, but they are largely negotiated between the owner and the occupant, with the websites simply acting as intermediaries for currency exchange and advertising.

At first, these newcomers accounted for less than a fraction of a fraction of the lodging industry’s revenue, guaranteeing little more than an idle eye from the hotel industry. In the last year, however, these services have exploded: AirBnB, for example, has coordinated more than 10 million stays since its founding.

It is important that both savvy consumers and concerned executives understand the inherent differences between traditional hosting and these new services.

First, hotels are a regulated industry. In addition to star ratings, laws at the municipal, state, and federal levels define minimum guidelines for cleanliness and safety. This provides travelers with a degree of certainty when booking accommodation. The BnB websites claim to mitigate these concerns through a review and return process; however, such a process is reactive, leaving stranded travelers stranded in the event of a bad rental. The consumer has the responsibility to examine any new or uncertain rentals.

Cities around the world are moving to address the regulatory issues of these rents that go unnoticed. Many cities already have requirements for buildings acting as BnB to be licensed, but many avoid this requirement. As a result, tax revenue is lost and minimum standards, such as disabled access, are avoided. The use of profiles, praised as a way of connecting to the community, differs from the traditional hosting community, which is required to offer hosting based solely on ability to pay. The process by which an AirBnB tenant can choose who stays based on photos and personal information opens the door to discrimination.

However, the interest in legitimizing these alternative services lies in the demand of consumers for an alternative way to stay while they travel. While hotels serve a fantastic function for short-term and business travelers, they may not be suitable for longer-term and themed stays. Alternative accommodations often include apartment-like services geared towards longer stays and lower prices – services that few businesses can afford to keep in high volume. Online BnB rentals can often have fascinating topics. An example includes a “tree house” in the jungle on the Caribbean side of Costa Rica. Although many resorts can be “themed”, these themes are often limited to common areas and room decor.

As the two industries build on their strengths, it is the consumer who will win. Hotels are likely to save costs by not having to meet the demands of boutique and long-term rentals, while online rental services will slowly develop the legitimacy necessary to ensure a minimum level of service.