[Telemachos] saw Athene and went straight to the forecourt, the heart within him scandalized that a guest should still be standing at the doors. He stood beside her and took her by the right hand, and relieved her of the bronze spear, and spoke to her and addressed her in winged words: 'Welcome, stranger. You shall be entertained as a guest among us. Afterward, when you have tasted dinner, you shall tell us what your need is.' […] [A]nd he led her and seated her in a chair, with a cloth to sit on, the chair splendid and elaborate. For her feet there was a footstool. For himself, he drew a painted bench next her, apart from the others, the suitors, for fear the guest, made uneasy by the uproar, might lose his appetite there among overbearing people […]. (1.118-124, 130-134)
Telemachus knows how to treat a guest right: he welcomes her graciously, gives her a chair away from the suitors, and even brings her a stool for her feet. No wonder Athene decides to help him. (We have to say, knowing that your guest might at any point be a god is pretty good motivation to treat people well.)
(Menelaos:) 'Surely we two have eaten much hospitality from other men before we came back here. May Zeus only make an end of such misery hereafter. Unharness the strangers' horses then, and bring the men here to be feasted.' (4.33-36)
Menelaos gives us some insight into why the rules of hospitality are in place: he treats his guests well, because hosts once treated him well. Gee, it's nice when things work like they're supposed to.
(Nausikaa:) 'But now, since it is our land and our city that you have come to, you shall not lack for clothing nor anything else, of those gifts which should befall the unhappy suppliant on his arrival.' (6.191-193)
The Phaiakians treat Odysseus right, not just because they're generally nice people, but because it makes them look good. If you have enough food and clothing to give away, then you and your people must be doing pretty well for yourselves. See? Everyone wins.
(Alkinoös:) 'Now, having feasted, go home and take your rest, and tomorrow at dawn we shall call the elders in, in greater numbers, and entertain the guest in our halls, and to the immortals accomplish fine sacrifices, and after that we shall think of conveyance, and how our guest without annoyance or hardship may come again, convoyed by us, to his own country, in happiness and speed, even though it lies very far off […].' (7.188-194)
We have to assume that the Phaiakians didn't get guests too often, because throwing a feast every time a stranger walked up would get pretty exhausting. (It's probably true that most people didn't travel very much in Ancient Greece.)
(Odysseus:) 'Let any of the rest, whose heart and spirit are urgent for it, come up and try me, since you have irritated me so, either at boxing or wrestling or in a foot race, I begrudge nothing; any of the Phaiakians, that is, except Laodamas himself, for he is my host; who would fight with his friend? Surely any man can be called insensate and good for nothing who in an alien community offers to challenge his friend and host in the games. He damages what it is.' (8.204-211)
Guest rule #121: don't beat your host in an arm-wrestling match. It's just not nice.
(Polyphemos, in Odysseus' tale:) '"Give me still more, freely, and tell me your name straightway now, so I can give you a guest present to make you happy."' (9.355-356)
We didn't have a good feeling about this cave anyway, but the minute Polyphemos starts talking about hospitality, we know it's not going to end well. Not only is he going to perform the host's duty of feeding his guests, he's actually going to eat them. That's pretty much the exact opposite of gracious.
(Odysseus:) "So she spoke to them, and the rest gave voice, and called her and at once she opened the shining doors, and came out, and invited them in, and all in their innocence entered; only Eurylochos waited outside, for he suspected treachery. She brought them inside and seated them on chairs and benches, and mixed them a potion, with barley and cheese and pale honey added to Pramneian wine, but put into the mixture malignant drugs, to make them forgetful of their own country. When she had given them this and they had drunk it down, next thing she struck them with her wand and drove them into her pig pens, and they took on the look of pigs, with the heads and voices and bristles of pigs, but the minds within them stayed as they had been before." (10.229-241)
Circe isn't eating her guests, but she's doing the next worse thing: serving them poisoned food. We're not sure if it's actually in the rule book, but turning your guests into pigs is probably not going to win you the gods' favor. Even if you are a sorceress.
(Eumaios:) "You too, old man of many sorrows, since the spirit brought you here to me, do not try to please me nor spell me with lying words. It is not for that I will entertain and befriend you, but for fear of Zeus, the god of guests, and for my own pity." (14.386-389)
Eumaios doesn't want to hear a bunch of sob stories about how Odysseus just needs $20 so he can buy a bus ticket to Memphis. He's going to give him the $20 because it's the right thing to do. (Warning: this is an analogy. Please think carefully before giving $20 to strangers on the street, even if they do need it for a bus ticket to Memphis.)
(Menelaos:) 'I would disapprove of another hospitable man who was excessive in friendship, as of one excessive in hate. In all things balance is better.' (15.69-71)
Menelaos says that you have to be moderate even in being hospitable, but we have to wonder: with Alkinoös throwing a feast and Nestor coating a cow's horns in gold before slaughtering it, what exactly counts as "moderate"?
(Penelope:) 'But come, handmaidens, give him a wash and spread a couch for him here, with bedding and coverlets and with shining blankets, so that he can keep warm as he waits for dawn of the golden throne, and early tomorrow you shall give him a bath, anoint him, so that he can sit in the hall beside Telemachos and expect to dine there; and it will be the worse for any of those men who inflicts heart-wasting annoyance on him; he will accomplish nothing here for all his terrible spite […].' (19.317-325)
Penelope is a gracious hostess—but we're so sure her maids like having to give baths to all the beggars who show up with stories about Odysseus.