The most common and most likely answer to this crossword clue is the 5 letter word SERAI
I've seen this crossword clue in The Times
S
E
R
A
I
Buddy explains!
The straight part
We know that "that serves drinks in the east" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case that serves drinks in the east = serai.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does SERAI mean?
SERAI noun- (In Turkish or Muslim Asian contexts) A palace.
- A seraglio.
- A caravanserai; an inn.