The DoubleTree Hilton in the English town of Hull stepped in to host the event after the nearby Britannia Royal hotel canceled the reservation.
Britannia Hotels said on Monday that it had canceled the booking, which Simpson had paid 1,092 for, because it had heard reports of bad behavior before.
According to Sky News, the hotel claimed to have heard of disruption at an Ibis Hotel the previous year, which Simpson also organized.
Simpson denied the claim, and said that the 24 people he paid the hotel to stay in 2017 were "so grateful."
Business Insider called the Britannia Royal, where staff refused to comment.
Simpson said that last year "some left staff gifts using the very little money they had, and one asked if he could vacuum the rooms to show his appreciation."
"This means the world to homeless people. Last year we had tears of joy from someone who stood on the edge of the Humber Bridge the night before."
A Britannia Hotels spokeswoman said that the company had received a call from a woman claiming to be part of the project who said rooms and property had been damaged the previous year, Sky News reported.
Simpson said on Facebook that Ibis said there had been no problems, and queried the identity of the woman, on the grounds that he has no staff.
Hundreds of people raised more than 9,000 in support of the project, and Simpson said they would have meetings in the new year to decide how to use the money to help the homeless. He also said that anyone who wished to have their donation returned after the Hilton offered the free rooms could have it back.
Simpson confirmed on Monday that the Hilton Hotel was offering the rooms free of charge: "We can confirm that the DoubleTree Hilton have offered to put up 28 people for two nights with breakfast and Xmas dinner provided and they are doing this complimentary."
Britannia Hotels said in its statement that it was "willing to take the booking with conditions." Simpson said that the Britannia Royal "offered to reinstate our booking with conditions which we will be declining."
Research released last week found that more than 24,000 in Britain will spend the Christmas period sleeping rough or on public transport.