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Your complete guide to hotel classification

  Posted in Resources  Last updated 22/05/2024

What is a hotel classification?

A hotel classification is a way for guests to understand the quality and style of the hotel they are booking. Hotels are often classified based on various criteria such as star rating, ownership or management, guest type, and length of stay, among others.

Hotel classifications immediately let guests know what kind of service and amenities they can expect. This also helps hotels market their offerings and also makes it easier for travellers to research and book accommodation.

But there are many different ways to classify hotels, including being based on who owns them or the guests they attract.

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

Table of contents

Importance of hotel classification

The importance of hotel classification revolves around the benefits for both guests and the industry as a whole.  

For guests:

  • It helps set expectations for what their experience will be.
  • It enables them to compare hotels easily and make an informed booking decision.
  • It allows them to find the right fit for their preferences.

For the industry:

  • It helps to set standards of quality for properties to adhere to.
  • It gives hotels another marketing angle.
  • It builds trust with guests.

Of course, there are always variations and tangible differences even in hotels that are classified as being the same. And guests differ in their standards and expectations too, but classification is an important and useful guide for everyone.

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What is a hotel classification system?

A hotel classification system is an organised structure that helps governing bodies determine the category of a specific hotel. The hotel classification system that most of us are probably keenly familiar with is the system that ranges from one star to five stars.

Each star rating is linked to a set of criteria that considers factors like room size, amenities offered, guest services, and sometimes even food and beverage options.

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:

AustraliaQuality Tourism Australia

USAAmerican Automobile Association

EuropeHotelStarts Union

United KingdomAA Hotel and Hospitality Services

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 accommodation and five star being on the luxury end of the scale.

Star hotel classification list

Here’s a full list of hotel star classifications to consider:

One star hotel classification

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

Seven star hotel classification

There isn’t a universally recognised  7 star hotel rating, despite people thinking there is.  

It’s actually an unofficial term coined by a journalist for the Burj Al Arab in Dubai to emphasise its sense of luxury. So, nowadays some luxury hotels will use seven star terminology for marketing purposes.

However, officially, hotel ratings systems max out at five stars.

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

star hotel classification

What are the hotel classification guidelines?

Hotel classification guidelines generally involve specific quality standards around hotel rooms, amenities, and more. They can differ from country to country and depend on different governing bodies.

Though there is typically some common ground that makes it easier to identify how a hotel might be correctly classified. Key factors include:

  • Rooms: Hotels with bigger rooms and rooms that have more features are more likely to get a higher star rating than those with smaller rooms.
  • Amenities: More amenities and higher quality amenities will boost a hotel’s appeal and rating.
  • Food and beverage: Does the hotel have its own restaurant, room service, and additional bars or cafes?
  • Accessibility and convenience: The hotel may be rated higher if it’s in close proximity to major attractions and transport.
  • Staff: The level of professionalism and personalisation from staff plays an important role in classifying a hotel.

Other considerations such as the level of safety and security, cleanliness, and sustainability could come into play as well.

Other hotel classification definitions

Hotel star classifications may be the most common way of defining a property, but they are by no means the only criteria that can be applied.

There are a number of other classifications that give travellers the information they need and can be even more useful than a star rating in some cases.

Hotel classification by location 

Guests can also form expectations based on where a hotel is located too. Certain destinations typically include accommodations that have specific characteristics. Here are some of the most common examples.

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

Suburban Hotels

Situated in the outskirts of major cities, these hotels often cater to a mix of business and leisure travellers. They might offer lower rates compared to hotels in the city centre and might have amenities like pools or on-site restaurants. 

Rural Hotels

Found in countryside locations or near natural attractions, these hotels cater to leisure travellers seeking relaxation or outdoor activities. They might be smaller properties with a focus on nature and include amenities like spas or eco-friendly practices. 

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 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.


Typically all-inclusive experiences, resorts are often located in beautiful and/or remote locations such as coastal landscapes, tropical forests, or in adventure destinations such as snow fields.


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.

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 are most often located in regional or rural areas that are rich in natural resources.

Roadside hotels

Roadside hotels are just that – accommodations situated next to major roads and highways. Generally positioned to provide the ultimate convenience for travellers who are roadtripping for work or leisure, they provide simple comfort and the essential amenities.

Hotel classification by size 

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 style 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.

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 traveller segments will require different guest rooms in a hotel. Even luxury travellers can require a different kind of suite 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.

Length of stay hotel classification

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.

Classification of hotels on the basis of ownership or management

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

There are 3 main 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 kind 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 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 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.

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.

By Dean Elphick

Dean is the Senior Content Marketing Specialist of SiteMinder, the leading technology provider delivering hoteliers unbeatable revenue results. Dean has made writing and creating content his passion for the entirety of his professional life, which includes more than six years at SiteMinder. Through content, Dean aims to provide education, inspiration, assistance and value for accommodation businesses looking to improve the way they run their operations achieve their goals.

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