Small area with a capital hotel (6)
I believe the answer is:
parish
'small area' is the definition.
'parish' can be an answer for 'area' (I have seen 'Ecclesiastical area' mean 'parish' so perhaps 'area' could also mean 'parish'). I'm not sure about the 'small' bit.
'with a capital hotel' is the wordplay.
'with' is a charade indicator (letters next to each other).
'a capital' becomes 'paris' (Paris is an example**).
'hotel' becomes 'h' (phonetic alphabet: alpha, bravo, charlie etc.).
'paris' put next to 'h' is 'PARISH'.
Can you help me to learn more?
(Other definitions for parish that I've seen before include "Local church community" , "In Louisiana a county" , "District with own church and clergyman" , "administrative district" , "Diocesan subdivision" .)