Neolocal expressions where inhabitants promote distinguishing community characteristics through tourism have become increasingly popular in remote cold-water islands. Although scholars primarily discuss neolocalism in the context of microbreweries, evidence has emerged of tourism-neolocalism dynamics. Airbnb rentals, for instance, can be considered as neolocal playgrounds where inhabitants and tourists immerse themselves in and promote a destination’s localness. Through a qualitative case study, this paper examines how these traits play out on Heimaey, Iceland. It investigates whether distinct Airbnb hostings, ranging from locals cohabiting with visitors to more professionalised services exhibit divergent neolocal forms. Findings demonstrate that Airbnb delivers a form of neolocalism stemming from inhabitants’ living spaces whereby hosts construct localness either in the name of conservation or innovation. In this process, the boundaries between the local(isms), the global, and cosmopolitanism are blurred, thus complicating people’s sense of localness. Here, neolocalism becomes more than a mere commercial tool that automatically leads to sustainable outcomes. This study enriches our understanding of new intersections of modern tourism trends and their impact on a community’s sense of localness. Further research is needed to unravel the implications of these dynamics for community wellbeing from a community sustainability and resilience perspective.