Position hotel in French city (5)
I believe the answer is:
niche
'position' is the definition.
(niche is a kind of position)
'hotel in french city' is the wordplay.
'hotel' becomes 'h' (phonetic alphabet).
'in' indicates putting letters inside.
'french city' becomes 'nice' (Nice is a French city).
'h' placed within 'nice' is 'NICHE'.
(Other definitions for niche that I've seen before include "Cosy spot" , "Position well suited to the occupier" , "market area for specialists" , "Well-suited position" , "Recess - suitable position" .)