A flag hangar was a private hangar on Imperial Star Destroyers, where a commanding admiral of the Imperial Fleet would stay when visiting a ship. In addition to the hangar, the admiral would also have private quarters near the hangar.
Booster Terrik kept the Flag Hangar on the Errant Venture as his own, and met with Han, Leia, Lando, Corran, Mirax, Iella, Wedge, and Myri after they escaped Corellia.