Carl Simpson, founder of the Raise the Roof Hull Project, crowdfunded more than £1,000 ($1,260) so that 28 homeless people could stay at the Royal Hotel in Hull, northern England, for two nights over the festive period.
But Simpson says the hotel canceled the booking over the weekend without giving any explanation, throwing the project into disarray.
In a Facebook post, Simpson said he was "absolutely gutted and very angry" at the sudden cancellation of 14 twin rooms on Christmas Eve and Christmas Day. "I asked for a reason and was told there isn't one," Simpson wrote in the post.
"Our Xmas hotel campaign is now in serious doubt being so close to Xmas we need a miracle," he added.
Hayley Harrington, director of Raise the Roof, told CNN the hotel was made fully aware the booking was for a homeless project.
"They said it was fantastic but on Saturday we received a phone call from the hotel saying the room was canceled. They didn't give us any reasons," Harrington said.
"We checked online and there were still rooms available. This is just discrimination."
Last year, the homeless charity booked Hull's Ibis hotel for the same project. "It was fantastic and everyone enjoyed it but they didn't have enough twin rooms available to keep everyone together his year," Harrington said.
CNN contacted Royal Hotel, which is part of the Britannia group, on Monday but was told nobody was able to comment. The hotel has also deleted its Facebook page.
Hundreds of people commented on the original post, describing the hotel's behavior as "disgusting" and "disgraceful" and calling for a boycott of Britannia hotels.
Local Labour Party MP Emma Hardy said in the comments that she would email the hotel and "appeal to them to reconsider."
Others called to donate more on the original GoFundme so that the homeless people would get another place to stay for Christmas.
At the time of writing, the crowdfunding page had almost £8,000 in donations, nearly four times the original £2,000 goal.
Harrington hopes that will be enough to find a new place for December 25.
"We've got a few possibilities in line. We need to weigh the costs and the organization," she said. "There are a lot of generous people out there."
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