Cool northern watering hole (3)
I believe the answer is:
inn
'watering hole' is the definition.
(both can mean a drinking establishment)
'cool northern' is the wordplay.
'cool' becomes 'in' ('in' can mean fashionable or cool).
'northern' becomes 'n' (abbreviation e.g. N. Ireland).
'in'+'n'='INN'
(Other definitions for inn that I've seen before include "European river" , "Pub providing food and accommodation" , "watering-hole" , "Small hotel or country pub" , "Country pub, often with accommodation" .)