Classification of Hotels

Table of contents

Depend on the purpose of classifying hotels, there are 5 mainstream ways to label hotels. On the opposite, as almost every hotel is unique, the categories list could be as long as someone wants. And any hotel can always be fitted into more than one, two or three categories.

 classification of hotels

Classified by size

Running a hotel with 100 rooms and running a hotel with 1,000 rooms are 2 concepts. Not to mention the 10,000 rooms Abraj Kudai—the world's biggest. Meanwhile small, medium, big or giant are definitely relative concept.

In UK, the industry standard is:

  • Small hotel:   25 rooms or fewer
  • Medium hotel:  26 to 100 rooms
  • Large hotel: 101 to 300 rooms
  • Very large hotels or mega hotel:  301 or more

In other places, it’s usually defined as:

  • Small: 150 rooms or fewer
  • Medium: 151 to 299 rooms
  • Large: 300 to 600 rooms
  • Mega hotels: 600 rooms or more

So 150-room is a small hotel, 151-room is a medium hotel, right?  Yes, a little bit absurd, but that’s sometimes how management or economic concept looks like.

Categorized by location

Airport hotel / Transit hotel

It’s close to airport or busy railway station. Airport hotel usually offers free shuttle bus to airport, that further reduces the concern of catching plane

Resort hotel

Typically located at vacation destinations, Almost all resort hotels feature spas and pools. To make it more attractive, extra activities and facilities like skiing, surfing, dance party, golf or volleyball are at most times provided. 

Downtown hotel / City center hotel

The target customers of downtown hotels are normally business travel guests.

Suburban hotel / Country hotel

Hotels in this category, if are not resort hotels, are usually conference hotels. Groups of seminars, exhibitions, shows, training are their main business.

Floating hotel

Cruise ships are representative floating hotels.

Categorized by ownership

  • Independent hotel
  • Chain hotel 
    • Parent company owned hotel

    • Management contract hotel 

    • Franchised hotel

    • Independent chain, Referral Groups, and Branded Distribution Company

Categorized by level of service

This is the most popular method to classify hotels in practice. In big hotel companies, different brands usually suggest diverse level of service—software, amenities and hardware. Classifying hotels by service level, like segmenting hotels by brands, is a convenient and useful approach.

Economy / Budget hotel: Motel 6, Best Western,
Mid-market hotel: Four Points by Sheraton, Residence Inn by Marriott, Holiday Inn…
Luxury hotel: Four Seasons Hotels, Ritz-Carlton Hotels, InterContinental Hotels…

Categorized by target markets

The needs of business travelers and sight-seeing travelers are mainly different. The basic demand of travelers from hotels are similar, so in early days there are no so many segments. But as competition is getting tense, hotels evolved into many brands and becoming niche oriented.

Business Hotel

Keeps company guests top of mind, it’s usually located in downtown or business districts, closing to office buildings, equipped with business center and limousine.

Airport Hotel

Mainly of their business from overnight travel layovers, cancelled flights guests and airline crews. Closing to airport is its key competitive advantage.

Suite Hotel

Many business hotels have suite rooms, but suite hotel usually has only suite rooms.

Extended Stay Hotel

This type of hotels is for long-staying guests. To satisfy them better, extended stay hotels usually design their rooms carefully with kitchens and other special space.

Serviced Apartment

It normally offers very limited of service to reduce operation costs, that makes it enable to offer competitive price for mid-term, long-term staying guest. Beside their limited service are usually outsourced.

Resort Hotel

Intended primarily for vacationers, is usually located near special attractions, where guests can easily access to beaches, seashores, scenic, historic areas, or skiing. Some resorts operate on a seasonal basis, most of them operate all year-round, but the rate of peak times is usually much more expensive.

Bed and Breakfast / Homestays

Usually some small motels, the breakfast is very simple. Now many luxury or mid-market hotels include the breakfast charge in their room rate, but they are not in this category. This category is specially for economic hotels.

Timeshare / Vacation Rentals

You can put most Airbnb accommodation into this category, basically. Timeshare hotel owner owns or purchases of a period of ownership of a house or room. They stay in the room or rent it out online or hire management company to do it.

Casino Hotels

To offer accommodation for gamblers and tourists. Customers receive the benefits of both gambling facilities and lodging. Since the casino and hotel are located on the same premises, all the gambler's necessities can be provided in one location.

Conference and Convention Center

Equipped with at least one auditorium and concert halls, lecture halls, meeting rooms, and conference rooms, is designed to hold meeting and conferences and offer food and beverage and accommodation to the attendees.


Guralnik, David B. (1974). Webster’s new world dictionary (Second College Edition). p. 263. Cleveland New York: The World Publishing Company.

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