The Raise The Roof Hull Homeless Project had raised over £1,000 in order to book 14 twin rooms at the Royal Hotel, in Hull, for Christmas Eve and Christmas Day.
But the organisation was left in limbo when the reservation was unexpectedly cancelled, just nine days before it was due to be fulfilled.
The situation left organisers in a "mad panic", but there was widespread relief when the local DoubleTree by Hilton stepped in to offer them rooms on the same nights, giving the rough sleepers a roof over their head for Christmas.
The group checked-in to their rooms yesterday afternoon and a complimentary turkey dinner is being served today to mark the occasion.
Raise The Roof's founder, Carl Simpson, told how he was "devastated" when the initial booking was cancelled, fearing that the homeless people he had supported might not be given the Christmas they had been promised.
He said: "These people, when we told them that they would have a roof over their head at Christmas and that they'd be getting dinner, their faces just lit up.
"The thought of then having to tell them that the hotel had been cancelled was horrible, so it left us in a mad panic to get the situation sorted.
"Then we were contacted by the DoubleTree, and I just couldn't believe what they were offering. The generosity they showed in stepping in to help at the eleventh hour is incredible, it restores faith in humanity."
A spokesman for the Royal Hotel's owners, Britannia Hotels, explained that the cancellation followed reports of bad behaviour at another hotel where Raise The Roof had booked rooms for the homeless last Christmas.
But Mr Simpson, a cafe owner, denied those suggestions, and told how the guests had even cleaned up after themselves and left presents for staff.
He added that the Royal Hotel did offer a refund after the cancellation.
Discussing the challenges that the homeless face over the festive season, Mr Simpson added: "Christmas Day on the streets is the worst thing that you can imagine.
"Being sat there, lonely and cold, just makes people reflect on what they've lost, the family that they could have been with, the home they could have been living in.
"It's for those reasons that the suicide rate among the homeless is so high at this time of year, it's one of the hardest times for them.
"To know that these guys won't be facing that this year is wonderful, and it's what Christmas is all about."
The organisation has helped a further 20 homeless people in Hull to find accommodation over Christmas.