The Hotel & Restaurant Division is responsible for processing online applications and granting project level approval to hotels under construction. The Hotel & Restaurant Division also classifies operational hotels under the star rating system. Under this system, hotels are given a rating, from One Star to Three Star, Four and Five Star with or without alcohol, Five Star Deluxe, Heritage (Basic), Heritage (Classic), Heritage (Grand), Legacy
Vintage (Basic), Legacy Vintage (Classic) and Legacy Vintage (Grand). Classification is done on the basis of inspection of hotels which is undertaken by the Hotel and Restaurant Approval and Classification Committee (HRACC), set up by this Ministry. The Division also approves properties in other categories viz, tented accommodation, apartment hotels, motels, Guest Houses, standalone restaurants, convention centres, Time Share Resorts, Bed & Breakfast establishments, air catering units and restaurants and Online Travel Aggregators. Issues plaguing the hotel industry which is brought to the notice of the Ministry of Tourism are
taken up from time to time with concerned ministries like the M/o Finance, NITI Aayog.