A large fraction of families traveling value the kitchens (leftovers, kid breakfasts, not having to eat restaurant food for every meal, when all the kids want is Kraft Mac&Cheese, etc.) and the common living spaces (kids go to bed early). I hate traveling with my family and being stuck in a hotel room (or two!). When I'm traveling alone or with just adults, I can be out all day and only use my hotel room for sleeping, but with a diverse set of ages traveling, we often hang out in the living room while someone naps, or my kids will be done with touristing by 3pm and we need somewhere to be until dinnertime.

You see this in vacation destinations like Hawaii and Ski towns; there is a significant fraction of accommodations that are Condos, because you need a place to hang. AirBNB brought that to urban areas by sub-letting apartments, when hotel operators only provided maximally-dense sleeping-focused options; multi-bedroom hotel rooms with living rooms and kitchens largely did not exist in major city centers.

Sure tho TBF I wouldn't use the word lax - it implies there's something dangerous or untoward going on and we are choosing to let it slide. :)

Rather since the rules limiting hotel size, locations, quantity etc have nothing to do with safety and everything to do with class, exclusivity, and segregation, we can jettison them confidently without worrying that we are being too lax about anything important :)