For my friend's wedding, we stayed at such a place. I had a long conversation with the owner, who lived in a side room. It looked like an extension he built on the house.

He told me he was running into issues with the city. Not from hotels or what not, but complaints from neighbors. They did not like the fact that strangers were constantly going in and out. BUT he said that he had heard hotels and motels were not happy about the popularity, especially from other short-term vacation home owners.

It's going to be a two front battle, one side from big business, and the other from neighbors. In the end my guess is that the city will license it, and heavily tax it, in other words the cities win.