More convenient hotel, above a run-down diner (7)
I believe the answer is:
handier
'more convenient' is the definition.
('handy' can be similar in meaning to 'convenient')
'hotel above a run-down diner' is the wordplay.
'hotel' becomes 'h' (phonetic alphabet: alpha, bravo, charlie etc.).
'above' means one lot of letters go next to another.
'run-down' is an anagram indicator (a run-down or ruined version of the letters).
'diner' with letters rearranged gives 'ndier'.
'h'+'a'+'ndier'='HANDIER'
(Another definition for handier that I've seen is " More convenient".)