Area with a capital hotel (6)
I believe the answer is:
parish
'area' is the definition.
(I have seen 'Ecclesiastical area' mean 'parish' so perhaps 'area' could also mean 'parish')
'with a capital hotel' is the wordplay.
'with' is a charade indicator (letters next to each other).
'a capital' becomes 'Paris' (capital of France).
'hotel' becomes 'h' (phonetic alphabet).
'paris'+'h' is 'PARISH'.
(Other definitions for parish that I've seen before include "Ecclesiastical district" , "Area within diocese with own church" , "Diocesan subdivision" , "quarter" , "Local church community" .)