Hotel of more than average height in capital (7)
I believe the answer is:
tallinn
'capital' is the definition.
(capital of Estonia)
'hotel of more than average height' is the wordplay.
I cannot quite understand how this works, but
'hotel' could be 'inn' (inn is a kind of hotel) and 'inn' is present in the answer.
'of more than average height' could be 'tall' (I've seen this before) and 'tall' is located in the answer.
No letters remain.
This explanation may well be incorrect...
'in' acts as a link.
Can you help me to learn more?
(Other definitions for tallinn that I've seen before include "Estonian city" , "Capital of Estonia" , "Capital on the Gulf of Finland" , "European capital" .)