Most of my wedding party is from out of town. They will most likely need to stay in a hotel for two to three nights. My parents think it is the attendants' responsibility to pay for their rooms. I think that the bride's family is supposed to pay for the out-of-town bridesmaids, while the groom's family pays for the visiting groomsmen. Who is responsible? Would it be okay to split the cost with the wedding attendants as a possible compromise?
Your parents are right, etiquette-wise. Generally, the attendants are responsible for paying their own way, just as they also pay for what they'll be wearing to your wedding. And usually when you have out-of-towners in for your wedding, you are able to reserve a block of rooms for them at a discount, so you will be helping them save some cash. That said, if you're willing to pay for some (or all) of their accommodations considering the amount of money they’re already putting toward your festivities, that's very considerate, and they likely won't object.
Choosing Wedding Attendants
Your Bridal Party