"It's also likely a realization by Airbnb that their current business model is flawed with its reliance on income from illegal activity by commercial investors using their site. We're not surprised by this move given major cities, including New York, Boston, Los Angeles and Washington, D.C. just passed strong short-term rental laws last year to rein in Airbnb," he said.

"If Airbnb wants to enter the hotel business, then it needs to do so on a level playing field and be regulated, taxed and subject to the same safety compliances and oversight that law-abiding hotel companies adhere to each and every day."