My first affiliate commissions from the beginning of my online career came from running a city portal site and although I have since sold the site for a tidy profit, it continues to make money in much the same way.
For the longest time I was making money referring people to hotels, motels and hostels in my city and making referral commissions from TravelNow.com. I was able to brand my pages on TravelNow to look similar to my site but I found conversions to be higher when I didn’t.
At any rate, people that look online for accommodations have many more ways of locating deals that the SERPS aren’t always where they start looking. The site I ran used to get organic search engine traffic for phrases related to {city name} + hotels or {city name} + {hotel name}. With folks being more online savvy in general, a different approach was needed but is still effective.
Mostly now I see city portal sites asking people to use their hotel links to help support the site. The site best have some really good unique quality content for people to want to support them. Plus, the owner must be keeping track of the best deals from across the web (and being an affiliate at several booking sites) to offer the most value.