Lodging would not be "Ordinary and Necessary" business expenses, for a day car provider. Your geographic area would be the grandparent's "tax home", for this activity; so the expense would not qualify as "out-of-town" business expenses.
A Schedule C day care provider can normally deduct a percentage of her home rent as a business expenses. But this lodging is not her home nor is it a business location. I don't think the IRS is not going to allow a vacation rental to be written off as a business expense.
