I'm accessioning an enormous stack of 1940s-1950s photographs of hotels and restaurants in my county (St. Lawrence Co., New York) that were taken for the purposes of getting or keeping liquor licenses. The hotels aren't what we'd think of as hotels (or even B&Bs) today, they're mostly large houses with a bar/restaurant downstairs and rooms to rent above. The rooms seem like they might have been something of an afterthought, given how small some of these localities are, without even incorporated villages.
So why is this something we don't see anymore? I'm guessing that the rise of motels has something to do with it, but why were motels more successful than this model? Why was it feasible for a tavern to have lodgings, even if they were rarely used, up to a certain time?
I don't really have any official sources on this, but I do have an undergraduate degree in urban planning. I think you'll find that in America it has a lot to do with the lack of a national highway system at that time: the Federal Aid Highway Act was passed in 1956. Folks who were travelling would not be able to move as fast across the country and would need to be stopping more frequently to spend the night and even the smaller municipalities were able to support a place of lodging. During the Urban Renewal period in the middle of the 20th Century, a lot of historic areas of American cities were demolished and reconstructed, as well, which lead to a loss of a lot of historic buildings and the "flattening" out of the affected cities, as the Euclidean zoning regulations of the time generally meant that the replacement structures had to be single-use (strictly commercial, residential, or industrial, without any provisions for mixed-use) and as such, it generally made more sense to rebuild single-story buildings.
The fast-moving and limited-access nature of national highway system has reorganized a lot of the American urban and economic fabric.
Would you mind posting a small collection of your photos to /r/TheWayWeWere? They sound interesting!
From a business standpoint, people wanted consistency and standards for when they use a hotel. The smaller ones just couldnt provide that back in the days (they dont have internet reviews). Even if they were good (clean, no pests, etc) it would only be known by the locals which was not their prime customers. There is also economy of scale that smaller hotels cant take advantage of. Theres more to this but those are the two main factors.
I know of many pubs that still offer accommodation in upstairs rooms. Where, specifically, are you talking about?