I think you're talking about cramming an entire family into one larger hotel room vs. renting an entire apartment/house, right? The thing is if you need two or more rooms, then renting an entire house/apartment often becomes substantially cheaper (I just checked for Sydney, Australia, and it's the case there), you get much more common space, and also the ability to cook/wash clothes.
There are some caveats - the hotel has daily maid service, but most people don't need a maid to clean their room on a daily basis. The AirBnB one time cleaning fees make it so that the longer you stay in the AirBnB, the cheaper the cost of the stay is on a per-day basis.
There are some caveats - the hotel has daily maid service, but most people don't need a maid to clean their room on a daily basis. The AirBnB one time cleaning fees make it so that the longer you stay in the AirBnB, the cheaper the cost of the stay is on a per-day basis.