Crossword Genius

Stay in a hotel here or relax outside (6)

Ross

I believe the answer is:

resort

'stay in a hotel here' is the definition.
(holiday resort)

'or relax outside' is the wordplay.
'relax' becomes 'rest' (to relax is to have a rest).
'outside' is an insertion indicator.
'or' put inside 'rest' is 'RESORT'.

(Other definitions for resort that I've seen before include "Place many go to" , "Place much frequented" , "Place to visit" , "Here we play" , "Holiday town" .)

I've seen this clue in The Telegraph.
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