Blemished hotel covered by awful red stain (9)
I believe the answer is:
tarnished
'blemished' is the definition.
('tarnished' can be similar in meaning to 'blemished')
'hotel covered by awful red stain' is the wordplay.
'hotel' becomes 'h' (phonetic alphabet: alpha, bravo, charlie etc.).
'covered by' is an insertion indicator.
'awful' indicates anagramming the letters.
'red'+'stain'='redstain'
'redstain' is an anagram of 'tarnised'.
'h' inserted inside 'tarnised' is 'TARNISHED'.
(Other definitions for tarnished that I've seen before include "Sullied" , "Stained" , "Having lost lustre" , "Dulled, discoloured" , "Blemished" .)