Crossword Genius

Hotel situated in pleasant bay (5)

Ross

I believe the answer is:

niche

'bay' is the definition.
(thesaurus)

'hotel situated in pleasant' is the wordplay.
'hotel' becomes 'h' (phonetic alphabet: alpha, bravo, charlie etc.).
'situated in' means one lot of letters goes inside another.
'pleasant' becomes 'nice' (similar in meaning).
'h' inserted into 'nice' is 'NICHE'.

(Other definitions for niche that I've seen before include "Nook, cranny" , "ideal position" , "comfortable situation" , "Chine (anag) - suitable place in life" , "good spot!" .)

I've seen this clue in The Times.
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