They have said to send over a competitive LOI and they'd consider it (on tax rolls for ~80k, small rural town). 

So competition is high.

If that were true the various real estate niches would have almost unlimited competition and profits would head toward 0.  

Keep this in mind when calculating potential profitability.Research active and potential competitive rentals in your intended market near Gatlinburg, not just through AirDNA, but searching booking platforms.

I am not looking to waive the inspection but what other options can I present that people have used which makes the offer competitive.

Luckily the personal referral had the most competitive bid and ended up going that direction.

What about the competition? 

Are you fully booked but maybe not charging as much as you could or are you failing to fill your calendar (maybe you're not pricing competitively enough).If you aren't booking up your property then a tool like RankBreeze could help you increase exposure of your Airbnb listing while also doing some of those strategies Mike suggested.

There is always room to add another property and make a decent return, but it requires enough knowledge/experience to create a rental that is unique enough to attract renters away from the competition.

Something to the effect that they will look at pics and video of the space and give you ideas on how to make the space unique with good style to help your place stand apart from the competition and you can purchase the material from the company as well (think wall accents, cabinetry, etc)I think the pod dropped in the last couple weeks.