Hotel regulations are by and large rent-seeking behavior (irony?). For example, OTA's have created several rules that only exist to protect their profits. Hotels have to have the same price on all listing websites including their own, so it doesn't matter if one OTA charges 40% as their cut. You're not allowed to bake their overhead into your bottom line.

Despite the wild-west nature of vacation rentals like this, people often prefer it over traditional hotels. Maybe it's the free market saying all this regulation meant to entrench the incumbents has hit its critical mass.