Hotel on island backed capital out East (5)
I believe the answer is:
hanoi
'capital out east' is the definition.
(I've seen this before)
'hotel on island backed' is the wordplay.
'hotel' becomes 'h' (phonetic alphabet).
'on' says to put letters next to each other (in a down clue, letters appear on others).
'island' becomes 'iona' (Scottish island).
'backed' shows that the letters should be reversed in order.
'iona' back-to-front is 'anoi'.
'h'+'anoi'='HANOI'
(Other definitions for hanoi that I've seen before include "Asian capital on the Red River" , "capital out East" , "Asian city" , "Vietnamese city" , "Capital city of Vietnam" .)