The building has been passed over by many people due to the layout, but I have a creative and viable solution (boutique hostel/hotel hybrid in well-established and overpriced tourist destination). 

For those following along at home, that language is found in Title 10, Chapter 1, Article E, section 6 (or 10-1E-6) in the municipal code.It reads: "The renting or leasing of real property for residential occupation for periods of time less than thirty (30) days is prohibited in any zoning district within the town, except as permitted in this title for hotels, motels and bed and breakfast inns."

The key factor is ensuring the property qualifies for favorable tax treatment by adhering to IRS rules regarding short-term rentals and material participation.For the 7-day rule, the IRS requires that:The average guest stay must be seven days or less for the property to qualify as a short-term rental.If the average stay is 30 days or less, you must provide substantial services similar to what hotels offer, such as daily cleaning or concierge services.Regarding material participation, to further classify the income as non-passive, you must meet one of the following criteria:You spend more than 500 hours actively managing the rental in a year.You manage the business yourself and spend at least 100 hours, with your involvement exceeding that of any other person involved in the rental.Please note there are actually 7 ways to qualify, the above two are the most common.

Here’s where it gets wild: right before the holidays, we not only closed on the house but also helped her move into an extended stay hotel.

New Orleans is very saturated with hotels, and STRs.

Is there anyone here who either has experience in hotel to apartment conversions or is interested in getting into that field?

Many of the larger hotels use a system called Opera for their PMS.

Hello,My name is Chris and I am a member of of private equity group that buys apartments and hotels.

It's not a hotel, the houses won't be perfect (unless it's new construction or luxury). 

I was told you could contact the hotel directly to see if they could extend on either end and keep you in the same room.