Upvote:2
Difficult to be specific without knowning the specific country, but think through the purpose of an invitation. It is twofold or threefold.
Even with an invitation letter promising to cover all expenses in country, the authorities will still want to see the financial details of the applicant. They want to gauge the economic situation at home and if there is a good job to return to. They also check if the cost of the trip is in proportion to the income and savings. (Few reasonable persons will spend several years of disposable income on a night in the opera. Spending that much to migrate and overstay is more rational.)
So if it is reasonable under the conditions for your relatives to visit and to stay in a hotel, then you should write a letter confirming the reason for the visit and that they plan to stay in a hotel. To that, add the hotel reservation. The visa officials will take the invitation into account for the premise of the trip, and look at the finances of your guests for the funding. If the finances of your relatives don't look good, you should spell out what you will cover (e.g. meals but not housing) to reduce their daily cost of subsistence while they are in the Schengen area. But it would be easier if they have enough money to cover that as well.