People want a more relaxed environment when they do go on their vacations. Some do it on a yearly basis, some on a preset time period (say every 3 or 5 years) but whichever the case, all of them want hassle free accommodations that do not cost much giving them more money to spend on other leisurely pursuits. Apartments can be rented instead of condos and hotels for it takes away the hustle and bustle of living in a box and kind of brings you to a home rather than a place to sleep in. Some of the best apartments for rent in tourist destinations have the best access to the beach for example, or are quite hidden from the fast paced live they aim to leave behind, tucked away amongst the trees and hidden grottos. You get privacy and a vacation at your pace (no one knocking at your door to tell you they have to change the sheets or do some maintenance)
You can cook your own food and buy them at the local markets making the experience more personal for your get an insight into the culture of the place. Get to know locals and get to know them and how they live better. After a good day of touring, you get home to your own private place with no interruptions.