Hundreds of people have raised more than £9,000 to house 28 homeless people over Christmas after their charity booking was revoked by a leading hotel chain.

Donations flooded in after the Britannia Royal hotel in Hull cancelled without explanation a reservation for rough sleepers on Christmas Eve and Christmas Day. The decision prompted a wave of anger directed at the hotel – which deleted its social media pages – while thousands more people offered to help.

Hours after the controversy emerged, a rival hotel offered to step in and provide accommodation to the group on a complimentary basis.

Carl Simpson, 50, the founder of the Raise the Roof homeless project, said they would be accepting the offer from Doubletree Hilton to put the 28 homeless people up on 24 and 25 December with breakfast and Christmas dinner provided. He said a number of other businesses had also offered services and help, adding: “Who says miracles don’t happen?”

The Britannia hotel chain, which made a £19m pre-tax profit last year, has not explained its decision, which homelessness volunteers said highlighted a “fear of the homeless” in parts of British society.

Research released last week revealed that more than 24,000 people in Britain will spend the festive period sleeping rough or in cars, trains, buses or tents – suggesting the problem is far greater than official figures portray.

The former footballer turned boxer Curtis Woodhouse said he had received more than 15,000 messages after he promised to open his gym to homeless people at Christmas.

Woodhouse, 38, said the messages included inquiries from people who needed accommodation, but also scores of offers to help. He said the response had “restored my faith in humanity” and that he would offer a roof to homeless people and put on a Christmas meal for them at his gym in Driffield, east Yorkshire. He also offered to help the 28 homeless people whose hotel booking was cancelled.

Simpson had paid £1,092 for the rough sleepers to stay in 14 twin rooms at the Royal hotel on Christmas Eve and Christmas Day. The cafe owner, who raised the money through donations, said he told the hotel when he made the booking that it was a goodwill gesture for homeless people.

He said he was “absolutely gutted and very angry” when he received a call from a hotel manager informing him that the booking had been cancelled. No reason was given, Simpson said.

“I asked for a reason and was told there wasn’t one,” Simpson wrote in a Facebook post that has been shared more than 1,000 times. “In my eyes, this is nothing more than discrimination, especially after we was so open about what it was for.”

The hotel said no one was able to comment when contacted by the Guardian.

24,000 sleeping rough or on public transport in UK, charity says Read more

The decision prompted outrage online. Some users called for a boycott of the Grade II-listed Victorian hotel, while others said they were disgusted and appalled. The hotel closed down its social media pages on Monday after it was inundated with criticism.

Emma Hardy, the Labour MP for Hull West and Hessle, said she would write to the hotel and “appeal to them to reconsider”.

The Britannia group owns 53 hotels – and more than 10,000 bedrooms – across the UK and was named in an online survey last month as the country’s worst hotel chain for the sixth year running. In the year to March 2017, the hotel group made a £19m pre-tax profit after an 11% increase in turnover to £93.4m, according to its latest Companies House filings.

Simpson said he was yet to receive a refund for the original booking.

A homelessness worker, who was not authorised to speak publicly about the hotel’s decision, said the move was typical of the misunderstandings about homelessness and a “fear that they are drunk ex-servicemen on drugs, rather than being on short-term contracts or suffering problems with welfare”.