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Most search in that area has a city modifier for US cities. I haven't researched Europe, but my guess is it would be the same. Searches for prime cities are extremely competitive... even with location and hotel-type modifiers within the cities, some cities are competitive enough that they would take city-specific sites.
Other cities are a piece of cake, but then they don't offer that much traffic. I'd do a lot of research on Overture and on Google, and definitely look for niche areas where there are searches and not too much competition.
Bottom-line, though... I don't think one site is going to do it for you in the competitive areas. You may get traffic by other means, but don't depend on search to get you traffic for "paris hotels" unless you really know what you're doing and put in a lot of time and effort.
Also, when you say "keywords," if you're thinking of the meta keywords, these are really next to useless. There have been some good recent threads on these... use the site search here to find them.