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Your comprehensive guide to hotel classifications

  Posted in Resources

What are hotel classifications?

Hotel classifications are a way for guests to understand the quality of the hotel they are booking. Classifications immediately let guests know what kind of service and amenities they can expect. This helps hotels market their offerings and also makes it easier for travellers to research and book accommodation.

But there are many different types of hotels. Most of us are familiar with the hotel classification system that ranges from one start to five stars, but there are other ways of classifying hotels. From types of guest rooms to the ownership structure, the different types of hotels and their categorisation can depend on a variety of factors.

So, with that in mind, let’s take a look at all the different types of hotel properties and classifications.

Table of contents

Star hotel classification

This is the most common classification of accommodation worldwide. However, it’s important to note that there is no one global governing body for hotel star ratings. In fact, most organisations that provide star ratings in each country are independent agencies and not government authorities.

Some of the most prominent organisations that determine hotel star ratings include:

The UN World Tourism Organisation also works to improve tourism competitiveness, promote sustainability and regulate standards.

There are plenty of other agencies that are responsible for hotel classifications in their respective countries and regions, and they all have slightly different guidelines that affect a hotel’s star rating. That being said, they all follow a similar system, with one star being the most basic type of accommodation and five star being on the luxury end of the scale.

One star hotel classification

This is the most basic standard of hotel. One star hotels are usually independently owned and smaller in size. The price of rooms in these types of accommodations reflect the quality and the types of services available in the hotel. As a low budget option, there are usually no additional facilities in the hotel and no type of room service.

Certain one star hotel rooms may not have an en suite bathroom. In these cases, there are shared toilet and shower facilities.

Two star hotel classification

Two star hotels usually come with an en suite bathroom. They are normally small to medium sized hotels and offer some food and beverage services. Two star hotels are still relatively basic and low budget but the standards and services will be a little higher.

Three star hotel classification

Three star hotels offer more services and facilities. As a middle of the road option, they offer all the basic amenities and services you would expect from a hotel without the extra trimmings.

As we’ve already mentioned, the criteria for a three star hotel rating may differ from country to country but, broadly speaking, they offer a variety of room types, have on-site facilities such as gyms and restaurants, and offer some kind of room service.

Three star hotels are not budget options and therefore guests will expect high quality customer service.

Four star hotel classification

Although they may not be quite as luxurious as 5 star hotels, guests still pay for a premium service. Again, the specific requirements vary depending on the regulatory agency, but four star hotels usually have a variety of room and hotel suite options, 24-hour room service, and a number of in-house facilities such as swimming pools, spas, gyms, restaurant, meeting rooms, business centres and secure parking garages.

Four star hotels are generally considered luxury hotels.

Five star hotel classification

As you may have guessed, five star hotels offer a luxury service to their guests. In order to be rated higher than a four star establishment, they must offer different types of services in the hotel.

Some services and features you can expect to see at five star hotel include:

  • Concierge and reservations desk
  • Valet parking
  • 24-hour room service
  • A doorman or butler
  • Nightly turndown services
  • Laundry services
  • Shoe polishing services
  • Dry cleaning and ironing services
  • In-house fine dining establishments (usually multiple bars and restaurants)
  • Transfer services
  • In-house childcare services
  • Flat-screen smart TV with international programming and streaming services
  • Fully stocked mini bar and fridge
  • An array of spa facilities and treatments
  • Luxury bedding
  • Luxury en suite with multiple shower jet options
  • Swimming pools
  • Gym facilities
  • Sauna

Every five star hotel might not have every single one of these features, however they will all offer a high level of service and go the extra mile to provide a luxurious experience.

Read our full guide on star ratings to learn how they are determined and how you can improve yours.

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Levels of services/facilities in a hotel

The star rating system is widely recognised by consumers across the globe, and having that kind of accreditation could therefore be seen as a strong marketing tool. However, hotels don’t have to apply for the star rating. In fact, they can easily be categorised — and subsequently marketed — according to the level of service provided.

The hotel level of service classification can be broken up into three main categories: luxury, mid range and budget.


Sometimes referred to as ‘world-class service,’ these types of hotel accommodation offer a luxurious experience for those who can afford to pay for it. Similarly to five star hotels, luxury or world-class service hotels cater to the rich and famous, business executives and so on. Luxury hotels and resorts should have many different types of suites on offer, along with several in-house facilities and services such as fine dining facilities, gyms, spas and swimming pools.

Guests have extremely high expectations when it comes to luxury accommodation. So, if you are advertising your establishment as a luxury hotel, you need to make sure that you have the facilities and services to back it up.

Mid range

Mid-range service hotels are the most common types of accommodation in the tourism industry. Similar to three star hotels, they offer all the comforts that the average traveller would expect from a hotel but without the luxurious add-on services.

Mid range hotels are clean, safe and comfortable and offer reasonably expected hotel services including room service, Wi-Fi, in-room entertainment, and in-house facilities such as gyms, bars & restaurants.


Also referred to as ‘limited service’ establishments, budget hotels offer guests the basic necessities. Guests at budget hotels will not expect any lavish services or facilities, but they will expect a clean, safe and quiet space to sleep for a low price.

Classification of hotels on the basis of ownership or management

Another way to distinguish between different kinds of hotels is by the types of hotel management. These categorisations can be used in conjunction with star ratings or service based classifications.

There are 3 main types of hotel management categorisations: proprietary ownership, management contract and franchise. However, there are other different categories of hotels to consider such as time-shares and condominiums.

Proprietary ownership

This categorisation of hotels refers to establishments that are independently owned and managed. This type of hotel business can range from residential facilities to commercial ones. Also known as ‘independent’ or ‘single owner’ hotels, these can often be family run businesses.

The standard and size of hotels under proprietary ownership can vary. Whether it has 50 budget rooms or 1000 luxury suites, it can be included in this category as long as it is independently owned and is not part of a wider company or chain.

Management contract

These types of hotels are managed by companies or organisations other than the owners. Under this kind of agreement, the owner (or owners) of the hotel will appoint a management company to take over the day to day operations of the hotel, usually on a long term basis.


Franchises and chains are often assumed to be the same thing. Although both can result in the same hotel brand existing across hundreds or thousands of locations, there is a key difference.

Chains are owned and run by corporations. In these instances, the corporation owns the rights to the brand and all services & standards are regulated according to a corporate policy. Franchises on the other hand are operated by individual business owners who have bought the rights to operate under the broader brand name.

Generally, the level of service and aesthetics of a certain hotel brand will be consistent across all locations regardless of whether it’s a chain or a franchise. However, in terms of finance management and operational procedures, a franchisee may pay fees to the corporation in exchange for advertising, reservation systems and other operational necessities.


Broadly speaking, a time-share is a property that is shared by various stakeholders. By buying into a timeshare, you share the cost of the property with others and therefore have guaranteed access to the property for a certain percentage of the year.

In theory, if the timeshare is shared by 12 owners, each owner has access to the timeshare for 1 month of the year. Similarly, if it is shared by 52 owners, each owner will get access 1 week of the year. How and when this access is negotiated depends on the timeshare contract.

There are many different types of time-share contracts but the two major distinctions are whether they are deeded or leased. Shared deeded contracts means that the owners buy a portion of the property. They therefore share responsibility for maintenance and so on. Shared leased contracts means that you are effectively renting access to the property and the deed remains with the resort or owner.


A condominium is a building which is divided into several units that are separately owned, often with common areas that are jointly owned by owners or residents. A condominium hotel is a building that is legally considered a condominium but is operated as a hotel, providing short term rentals and front desk services.

There are legal complexities as well as advantages and disadvantages to managing or owning a condominium hotel. However, they are generally considered on the luxury side of hotel room categories and can therefore be relatively lucrative.

Classification of hotel types by target market, types of hotel properties and classification of hotel types by location

The various types of hotels in the tourism industry can also be grouped according to their location, their target customers and the types of service the accommodation provides. This could be broken down in a myriad of different ways, but here are some of the most common hotel room type classifications.


With guests sharing a residence with the owner or manager, Bed & Breakfasts and Homestays are often small, family run businesses. The level of service in these kinds of establishments can vary significantly as can the price tag.

These kinds of hotels are often found in small towns or rural areas and guests often choose them because they offer an insight into the local area. As such, a friendly, hands on service is usually a big part of running a B&B or Homestay.

Vacation stays/Extended Stay Hotels

As the name suggests, an extended stay hotel offers long term accommodation for guests. They often combine the amenities of a serviced apartment with the basic services of a hotel. The rooms or suites are therefore usually bigger and come with facilities such as kitchens and self-service laundry.

Extended stay hotels can range from budget to luxury and the services, facilities and amenities will be reflected in the price.

Resort hotels

Resorts are a full-service hotel facility primarily designed for relaxing. Although many travellers will also want to explore the local area, resorts are designed to be self-contained to the point where guests could, in theory, stay within its confines for the duration of their stay.

Hotel resorts vary in terms of luxury and service levels, but generally speaking they usually include a swimming pool, several dining facilities, a bar, a gym, recreational activities and so on.

There are also various types of hotel resorts. Some of these include:

  • Beach resort
  • Golf resort
  • Ski resort
  • Family resort

Serviced apartments

Serviced apartments are fully furnished and self-sufficient apartments that can be suitable for both short and long term stays. Again, these can vary in terms of service levels. Some serviced apartments may be situated within a building that allows access to facilities such as gyms and swimming pools. Others might not.

Suite hotels

Suite hotels are often confused with hotel suites (which is one of the hotel room category names).

Put simply, a suite hotel is an entire hotel made of hotel suites. Every guest in the hotel will therefore have access to a type of suite with multiple connected rooms. While suite hotels can vary in terms of star rating and service levels, they are generally considered upmarket and fall under the ‘luxury’ category. As such, suite hotels will often provide additional luxury services and facilities for guests.

City/Business hotels

Although any traveller can use this kind of accommodation, these kinds of hotel rooms and wider establishments generally target business travellers as their main demographic.

Priority services and facilities in these kinds of hotels will therefore include:

  • Conference rooms
  • Video conferencing capabilities
  • High speed internet access
  • Workspaces within the rooms
  • Communal work spaces or business centre
  • Executive suites
  • Access to transport

Airport hotels

As you may have guessed, these are hotels that are located close to the airport. Catering to people who have a long layover, have missed their flight or need a place to sleep after a late arrival, they are mostly used for short stays. Turnover in these types of hotels is therefore very high.

Although usually only used for one night (or even a few hours), airport hotels can vary in terms of service and star rating. However, as proximity to the airport is the main factor for guests, many big hotels will offer various service levels within one building. So, in theory, the same hotel could offer five star suites and services to some guests while also providing basic packages and room options for those travelling on a budget.

Boutique/Independent hotels

There’s no specific definition for a boutique hotel. They can vary in terms of luxury levels but generally speaking, they are usually above average and veer towards the higher end of the scale. Boutique hotels are generally smaller, have a strong sense of character and often have unique design features.

Green/sustainable hotels

Sustainable or Eco-friendly hotels are establishments that are built and / or operated in ways that minimise the hotel’s carbon footprint. From using only local produce and products to creating energy saving and water saving systems, there are many ways hotels can be sustainable. These establishments can also vary in terms of their classification in the hotel industry.

Suburban hotels/Inns

Suburban hotels are categorised purely on their location. The kinds of hotel rooms found in these establishments can vary. Suburban hotels don’t necessarily have to be intimate inns or boutique hotels, they just happen to be located in quiet surroundings. In fact, some suburban hotels can even be large chain hotels located outside of a city.


Hostels and motels cater for people who are travelling. Motels are usually found on the road and outside of major cities and cater to all types of people, including families.

Meanwhile, hostels are usually extremely low budget options for backpackers and travellers. Some hostels may cater specifically to young travellers looking to socialise and have fun, whereas others might provide quieter accommodation on a budget. Some hostels offer private rooms but many of them offer shared dorm rooms as a means of providing extremely cheap accommodation. Shared kitchen facilities are also featured in hostels.

Need a full guide on hotel types? Read it here.

Hotel size and number of rooms

Classification of hotels based on size isn’t a reflection on the quality and service level. Instead, it categorises hotels based solely on the amount of rooms available.

Much like star ratings, this system can vary depending on the region and type of hotel in question. For example, a large hotel in a small town in rural Australia could be significantly different to a large hotel in New York City. Equally, a boutique hotel with 25 rooms might be considered large but a chain hotel with 25 rooms would be considered small.

Broadly speaking, however, hotel sizes can be grouped in the following categories.


Any establishment with 0 – 25 guest rooms can be considered a small hotel.

As you may recall from earlier in this article, one star hotels usually fit into the ‘small’ category. However, you could equally have a luxury boutique hotel that is technically considered small in size.


Anything between 26 and 300 guest rooms can be considered a medium size hotel.


Anything above 300 guest rooms is considered a large hotel.

Length of stay

Another Hotel room classification system is by length of stay. Once again, this is not necessarily a reflection on the quality of the hotel but it can inevitably have an impact. For example, hotels where guests are likely to spend a significant amount of time will most likely offer more services and facilities than those who cater to short-stay guests.

Commercial hotels

This term can be confusing as it can also be mistaken to mean a hotel business that is commercial. However, in this context, a commercial hotel refers to one that caters for business travellers.

Although these kinds of guests only tend to stay for a few days, they may expect a certain level of service along with facilities such as business centres, conference rooms and high speed internet connection.

Transient hotels

A transient hotel refers to an establishment where guest stays are generally considered short term (less than 30 days).

Semi-resident hotels

Semi residential hotels are usually priced out on a nightly basis but there is no limit to the amount of time that a guest may book the accommodation. Guests can book semi residential hotel rooms for months or even years at a time but the amount will still be broken down on a daily basis.

Apartment/residential hotels

Residential hotels are usually for longer term stays and can be priced out on a monthly basis. Residential hotels usually have self-sufficient rooms or apartments with kitchen facilities and self-serve laundry options.

Some large companies may even hire out a residential hotel unit for years at a time so that they can provide various employees with accommodation for business travel, pleasure, training and so on.

Extended stay hotels

Extended stay hotels are similar to serviced apartments in that they offer a self-sufficient space for guests to sleep, cook and relax. The difference between extended stay hotels and serviced apartments, however, is that hotels usually offer services like reception, concierge and access to in-house facilities like gyms and swimming pools. Some serviced apartments might offer these too but they are not a requirement.

Hotel classification by guests

Although many hotels will try to service a broad range of guests in order to maximise profits, the best hotels understand their main target demographic and tailor their services to cater for them. Different types of travellers will require different types of guest rooms in a hotel. Even luxury travellers can require a different suite room type depending on the reason for their trip.

There are many different types of guests, and some travellers might fall into multiple categories. However, here are some of the main categories of guests that require different rooms in a hotel.


Tourists come in all shapes and sizes. Some might want nothing more than a clean and quiet bed in the heart of the city whereas others might rely heavily on services like concierge and in-house facilities like spas and restaurants.


Business travellers also have a variety of needs. Some might require executive suites whereas others just want a room with a desk space and high speed internet.


Some families might want a hotel resort with all the trimmings to keep everyone entertained, whereas others might be looking for safe and comfortable accommodation on a tight budget.


Backpackers and travellers generally don’t require luxuries or lavish services. In fact, many might prioritise social and communal spaces over large or luxurious bedrooms.


Delegates are usually in the area for a conference or event. Again, their needs can vary greatly. Some may just want a quiet and clean place to sleep whereas others might require five star treatment.

Hotel room classification comes in many forms. Although the star rating is universally understood by potential guests, there’s no right or wrong way to classify your hotel. The important thing is understanding what your brand is and who it is you are catering for. Once you know that, you can market your hotel with the classification you believe is most suited to your business.

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