The most common and most likely answer to this crossword clue is the 8 plus 4 letter word STANDING ROOM
I've seen this crossword clue in Financial Times
S
T
A
N
D
I
N
G
R
O
O
M
Buddy explains!
The straight part
We know that "where there are no seats" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case where there are no seats = standing room.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.