Airbnb and regulatory environment

Just read this article at HN http://needwant.com/p/buying-apartment-airbnb/ 

I've had the discussion about this "business model" (with similar ideas for finding high demand / low supply areas) with at least 3 separate set of friends - debating the profitability/scalability of the model.

One of the key question that arises - is the long term regulatory environment - the whole hotel and entertainment industry pays a great deal of use taxes - allows for strict regulation  - compared to an apartment rent this way. The odds are that the hotel industry will focus first on homes/apartments whose exclusive purpose is the daily rent (as opposed to a resident that occasionally rents their place when they are away...). This long term outlook is relevant when you are looking into 4yr plan - (more than that if you are to take into account the cost of capital/interest rate, taxes etc.). 

... doing a bit more research: Las Vegas city tax on hotel rooms is 12%...

I am curious how much is the regulatory overhead : making sure that your processes pass regular health inspections, that the people you employ are working legally, pay taxes etc.

Quite probably it may add up to another 10% - which still doesn't kill the model.

However, if I were in the hotel business I would probably push primarily for enforcement of certain rules that would make it impossible to allow the retrofiting of a typical residence into a "hotel", these are typically the regulations around fire and emergency rules (e.g. fire doors across the building, alternative exits, exit lights throughout the building that work when electricity is out, building plans and exit maps throughout the building so as the un-experienced resident can find their way out etc etc...

I wonder when this will happen. Either when the first bad airbnb accident happens or when the hotel industry reads the HN post :-)  (I am sure that the post will produce more copy-cats)

I bought an apartment to rent out on airbnb | Need/Want