For a non-airbnb example of this, look at Ireland: they have minimal regulations/barriers to entry for starting a (real) B&B, and the result is that you can get great accommodations all over this heavily-touristed island for €35-55/night. Truly one of the great deals in European travel.
Similar in the UK, the regulations for B&Bs and guesthouses are pretty minimal compared to a hotel. The biggest issue people run into in getting licensed is that often some changes are needed to meet the fire code for overnight accommodations. Usually not hard to fix, but may involve things like installing fire doors at the top and bottom of stairwells, and installing lockable fire doors on any closets that are located beneath stairs.
I rented an entire 3br/2 ba apartment in Dublin for a week for $700, circa 2007. We had 15 people in there.
On the first night there a child cat burgled one of our wallets. He scaled the side of the building and came in through an open window. We caught him in the act, but he was too quick and scampered out the way he came. When we complained to the host (the pharmacy downstairs, really) they asked if we wanted a NEW apt in a different building or another apartment in that one (basically two apts for a week for the price of two nights in a hotel)
I had the same reaction. Then realized he meant a pint-sized cat burglar scaled the wall, snuck through a window, and lifted a wallet. To me this is extreme considering it would be far easier to be a pickpocket or scam artist.
