Extremely pretty hotel protected by lone method of checking callers (7)
I believe the answer is:
spyhole
'method of checking callers' is the definition.
(a spyhole lets you look out at visitors)
'extremely pretty hotel protected by lone' is the wordplay.
'extremely' suggests removing the centre (only the extremes of the word are used).
'hotel' becomes 'h' (phonetic alphabet: alpha, bravo, charlie etc.).
'protected by' is an insertion indicator.
'lone' becomes 'sole' (synonyms).
'pretty' with its centre taken out is 'py'.
'py'+'h'='pyh'
'pyh' placed inside 'sole' is 'SPYHOLE'.
(Other definitions for spyhole that I've seen before include "feature of door?" , "Viewing device" , "Viewer (e.g. in door)" , "Small viewing port" .)