What is a 5 star hotel?

A five star hotel is better explained in the long form explanation below.

There is a standard star rating system used in the lodging industry however this star rating system varies in comparison when using booking engines such as Hotels.com, Expedia and Hotwire and even AAA. Star ratings are not to be confused with AAA ratings as AAA uses its own guidelines in grading hotels to fit their standards.

In the lodging industry the following star ratings describe the typical accommodations a consumer may expect:

One star = and economy rating, a motel setting. Nothing more than a bed and a shower and TV. These are needs driven accommodations more than wants. Designed for the budget traveler these are simple, clean and basic rooms.

Two stars = a motel setting which is outside access to the room, basic TV, a pool, small amenities such as soap and lotion in the room and parking included. Some business needs and a partial fitness area. Also designed for the budget traveler and may include a few extra amenities such as a continental breakfast.

Three stars= spacious rooms in a hotel setting, which means interior corridor rooms, with quality amenities, good dining service, a fitness center, well designed lobby, room service and at least one meeting facility. These accommodations tend to lean towards the want of a traveler and begin to appeal to the families with small children and business travelers.

Four stars= very upscale accommodations offering fine dining, bars, lounges, meeting and banquet facilities, and personalized service. Expect to find on-site concierge, contemporary rooms, fitness center and spas. Exceptional in room amenities including in room business needs, WiFI and such, flat screen TVs, granite counter tops in bathrooms etc.. These hotels tend to attract the vacationing families, special events and the upscale traveler.

Five stars= are the best in luxury and convenience. They achieve excellence in every facet of hospitality and are known for their superb craftsmanship in architecture, landscaping, interior design, and exquisite taste. This elegant ambiance carries throughout the rooms, lobbies, facilities, and outer grounds. The highest quality linens, bedding, flooring, and amenities are used. Expect high-speed internet access, CD/DVD sound systems (mostly but not always), and 24-hour room service, along with gourmet dining, butler service in some hotels, and original wall art, flowers, and elegant room décor. Designed for the discerning traveler.

In some cases, these star ratings mean more to the hotel than the consumer. They determine the consumer market segments the hotel will appeal to which allows the sales staff to market and sell to that particular group of people
It's really a science, even hotels are designed to fit each consumer much like packaging on a product.