Classification of Hotels

  • Post last modified:2 October 2021
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Grouping hotels based on various criteria is known as classification.

This system is one of the most commonly understood, accepted and recognized systems in India. This is also an official system of classification. In this system, hotels are classified based on facilities, which the hotels have, and services, which the hotels provide to the guests. Based on the number of services and facilities and their qualities and standards, which may vary from a basic bedroom to a luxury room with modern fittings and equipment, the hotels are awarded stars ranging from one to five stars deluxe.

The classification of new and functioning hotels is done by the ministry of tourism. The department forms a committee called as hotels and restaurants approval and classification committee (HRACC hotel association of India) which is headed by the ministry of tourism and comprises of members from the hotel industry, the travel agents association of India, and the principal of the regional institute of hotel management, catering technology and applied nutrition etc.

This is a permanent committee to classify hotels into five categories that are, from 1 to 5 star and into five-star deluxe categories. The committee inspects once in three years the existing hotels that have been classified to confirm that the hotels are sticking to the standards.

Classification of Hotels

  1. Hotel Classification by Star System
  2. Hotel Classification by Locations
  3. Hotel Classification by Number Of Rooms
  4. Hotel Classification by Type of Plan
  5. Hotel Classification by Type of Clientele
  6. Hotel Classification by Length of Guest Stay
  7. Hotel Classification by Ownership

Hotel Classification by Star System

A hotel’s star rating is an indicator of the quality of services rendered by the particular hotel and is dependent on the data provided by the hotel. As star ratings do not necessarily show all the amenities& facilities or services that might be available at a hotel, and some amenities and features may not be available in every room or at every property with a particular star rating even though the hotel gets a star rating.

One Star Hotels

One star hotels offer clean, no-frills accommodation with minimal on-site facilities for the budget traveller for whom cost is the primary concern. On-site dining is usually not available.

Guestrooms generally are small, functionally decorated, and may not have a private bathroom, in-room telephone, or amenities. Public access and guest reception may not be available at all hours.

Two Star Hotels

Two star hotels offer limited–service establishments are expected to offer clean, basic accommodation. These properties may offer some business services but generally lack meeting rooms, baggage assistance, and full fitness and recreation facilities. On-site dining is usually limited to coffee or continental breakfast service.

Guestrooms generally offer private bathrooms, telephones, TV and limited amenities.

Three Star Hotel

Three-star establishments place a greater emphasis on style, comfort, and personalised service. They generally feature on-site dining room service, a pool and/or gymnasium, a beauty parlour, a gift shop, and may provide baggage assistance. Meetings rooms and extended services for business travellers are usually offered.

Guestrooms offer more extensive amenities and more careful attention to decor and comfort.

Four Star Hotels

Four-star hotels offer a fine–dining restaurant (with multiple cuisines), lounge and room service with extended hours. Service features usually include baggage assistance, concierge service and valet parking. A conference centre with up–to–date technology and full business services are usually offered. Public spaces and guestrooms are thoughtfully designed and constructed with high–quality materials.

Guestrooms generally offer stylish furnishings, high–quality bedding and bath products, and a wide array of amenities. Recreation facilities as well shopping kiosks are available.

Five Star Hotels

A five–star hotel is the finest hotel in the world which s is characterised by luxury appointments, superlative service and the highest standards of comfort. Five–star hotels offer originality in architecture and interior design, high–grade materials in construction and décor, and such special touches as fresh flowers and plants in abundance. These properties also maintain a high staff–to–guest ratio, gourmet dining, and 24–hour room service.

Guestrooms offer ample space, the finest furnishings and decor, premium bedding, and luxury bath products. Room amenities generally include high–speed internet access and CD and/or DVD players. Five–star resorts may offer additional recreation facilities such as tennis courts and golf–course access. On-site SPA services, a top-notch fitness centre and a pool are generally available, as well.

Hotel Classification by Locations

Downtown Hotel

It is located in the heart of the city, generally within a walking distance of the business centre, shopping areas, multiplexes, theatres, public buildings, shopping malls, etc. Rates in these hotels are normally high due to their proximity of area and because the investment made of the property is comparatively very high, computed on these capital–intensive hotels are substantially high. Normally business clientele prefers such hotels.

Suburban Hotel

Located in the suburbs of the main city, it has the advantage of quieter surroundings though it does not have the advantage of location. Rates quoted are moderate to low. Such hotels are ideal for budget travellers and organizations who find the quiet setting ideal for conferences, workshops, training sessions, seminars, educational programmes, etc.

Resort Hotel

This type of hotel is located in the hills or at beaches. It is mainly patronized by vacationers. Basic facilities are provided and the rates offered are often on American plan, i.e. Room and all meals included.


These types of hotels float on the water. A very common example is a cruise liner. In India, houseboats (a peculiarity of Kashmir/Kerala) fall under this category.

Airport Hotel

As the name suggests, these hotels are situated near the airport and are ideal for transit guests who are in the city for only a few hours. It is not possible for them to stay in a downtown hotel. Rates are on the European plan, i.e. Charges for room only.


This term is derived from the phrase, “motor hotels”, which are located principally on highways. They provide modest board and lodging to highway travellers. The length of stay is usually overnight, thus rates quoted are on the European plan, i.e. Room only.

Hotel Classification by Number Of Rooms

The capacity of a hotel in terms of the number of rooms is a yardstick for the categorization of the hotel by “size”.

Small Hotel

Hotels with 25 rooms and less may be termed “small” in India but in western countries hotels which have less than 100 rooms are considered small.

Medium Hotel

Those with 25 to 100 may be called “medium” in India but in the western countries hotels that have less than 300 rooms are considered as a medium. Those with 101 to 300 are called “large” in India but in the western countries, hotels, which have less than 600 rooms, are considered as large.

Large Hotel

Hotels with over 300 rooms which are very common these days, maybe termed “very” large & in India but in western countries hotels which have rooms in the range of 600 to1000 are considered as very large.

Hotel Classification by Type of Plan

Hotels are categorized according to the type of plan, they offer. We thus have hotels on

European plan (Room Only)

It is a plan where only the lodging that is a bed is offered. Thus the charges are made for lodging facilities only.

Continental plan (Room + Continental Breakfast)

In the case of the continental plan, bed and breakfast are included in the tariff charges. Thus bed is offered along with breakfast and the guest is, however, free to take his meal and tea as he likes.

American Plan (Room Rate + breakfast + Lunch+ Dinner)

The hotel where American plan is prevalent, boarding, and lodging is provided in the charge. The tariff fixed includes board and lodging. It is an all-inclusive full board tariff.

Hotel Classification by Type of Clientele

We often hear in hotel parlance, terms such a group hotel, commercial or business hotel, family hotel, etc. This categorization is based on the type of patronage.

Group Hotels

Group hotels cater to groups and thus their rates would be on American plan (where the rate includes tariff, breakfast, lunch & dinner).

Commercial Hotels

Commercial hotels cater to mostly businesspersons and are on European plan (where the rate is for the accommodation only) or continental plan (where the rate includes accommodation & the charges for breakfast).

Family Hotel

A family hotel would be on American plan. Where all three meals (breakfast, lunch, dinner) are included in the room rate. Such hotels are normally situated in resort cities.

Convention Hotel

The convention is a formal assembly of members for the acceptance of certain practices. A conference is a meeting of common interest participants. Such hotels need to be at least large as generally the outstation participants are accommodated in the same hotel. Such hotels should have all the facilities like overhead projector, DVD player, television etc as well should have banqueting facility to cater the participants.

Hotel Classification by Length of Guest Stay

This categorization of hotels can be further divided into three subgroups:

Transient Hotels

Transient hotels where a guest can stay for a day or even for few hours (airport hotels could be termed thus);

Residential Hotels

Residential hotels where guests stay for a minimum period of one month the hotel signs a detailed lease with me customer;

Semi Residential Hotels

Semi–residential hotels, which incorporate the features of both transient and residential hotels.

Hotel Classification by Ownership

Proprietary ownership

small properties are owned by one person & operated by his family members whereas large properties are owned by international hotel chains like Hyatt, J.W. Marriot etc . As well as national chains like Cambay, Choice hotels etc.


where the buyers can occupy the properties (of the company) for stipulated days, every year for which they make onetime payment. E.g., club Mahindra holiday, country club etc.

Management contract

there are entrepreneurs who have finance but do not have the expertise to manage a hotel make a contract with the companies, which have such expertise. E.g. Hilton, Starwood hotels etc.


the franchisor (who owns the trademark, product) allows the franchisee (who gets the right to do the business under the franchisor’s name) to do the business which is mutually beneficial to both .e.g. Ramada Inn, Best Western etc.

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