A hotspot is any location where Wi-Fi network access (usually Internet access) is made publicly available. You can often find hotspots in airports, hotels, coffee shops, and other places where business people tend to congregate. Hotspots are considered a valuable productivity tool for business travelers and other frequent users of network services.
Technically speaking, hotspots consist of one or several wireless access points installed inside buildngs and/or adjoining outdoor areas. These APs are typically networked to printers and/or a shared high-speed Internet connection. Some hotspots require special application software be installed on the Wi-Fi client, primarily for billing and security purposes, but others require no configuration other than knowledge of the network name SSID.
Wireless service providers like T-Mobile generally own and maintain hotspots. Hobbyists sometimes setup hotspots as well, often for non-profit purposes. The majority of hotspots require payment of hourly, daily, monthly, or other subscription fees.
Hotspot providers strive to make connecting Wi-Fi clients as simple and secure as possible. However, being public, hotspots generally provide less secure Internet connections than do other wireless business networks.
source: about.com