Summary: Lime build up is an issue for tankless water heaters in residential installations. In a hotel, this should not be an issue if a water softener is installed.
Mullinax Solutions posted an interesting article on the differences between tank-type and tankless water heaters. In the article they noted that lime build up in a tankless water heater from hard water is a significant problem compared to a tank type water heater. This is counter to manufacturer claims, but the research cited pointed out what most engineers, including myself, would intuitively expect. The Mullinax article explained that the elevated temperatures and the slower flow rates through a tankless water heater contribute to lime build up.
But does this concern for residential installations translate to hotels? I believe not. Hotels located where hard water is an issue generally have water softeners for the hot water system. As noted in the research, a water softener mitigates this concern about tankless water heaters. Therefore, this disadvantage of tankless water heaters should not be a problem in a hotel.
Of course, the challenge in a hotel is to identify any application for a tankless water heater. But applications in hotels do exist. My two favorite applications are for the hot water recirc lines in water zones separated by pressure reducing valves, and for spot water loads such as remote kitchens. But the fact remains that the high demand of a hotel is best served by a system with large storage capacity.