well yes, it's about that.
which makes the debate more about if a room for rent -literally- is a hotel - and why it's not a hotel if the guest stays for a month..
How about the simple fact that most tourists staying in a place for just a few days usually won't bother to go to authorities if there is something wrong with their rooms? As such, to protect the reputation of a city, they have to regulate the hotels that primarily target tourists?
If you are going to stay in the same place for a month or more, it is likely you will find out anything wrong in the first week, and you would more likely report it to police as you still have to stay for weeks there. Plus, people usually do more research when spending more, such as where to spend the money to stay a whole month or more, including possibly a prior visit in person for longer stay.
Not so for a hotel you probably going to stay just one night. Any problem you found in the night, you are leaving the next day and not coming back to that city again anyway. That would allow bad hotels to stay in business for quite a while, damaging the reputation of the area and hurting tourism for everyone else.
America being as it is, doing more to drive away tourists than promoting it, it is not surprising that most Americans have no idea how important it is for tourism to maintain a certain minimum standards on the hotels in the area. Next time you go on a trip to another country, talk to the hotel manager how many regulations they have to comply, you would be surprised how regulated they are for your safety and enjoyment.