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Beds for 59 asylum seekers were provided at a Kent hotel last night as an "emergency measure".
The accommodation for the large party was booked by the Home Office at 3-star The Grand Burstin Hotel in Folkestone.
The district council says the arrangement was put in place due to 'extenuating circumstances', although details of these have yet to revealed.
A witness, who did not want to be named, said: "There were illegal immigrants staying at the Burstin last night, and they're due to stay tonight too.
"The staff down there don't like it, and the guests don't like it either."
Folkestone and Hythe District Council said it was informed of the situation yesterday.
They added all the beds have now been vacated and this was a 'one off' situation, with no rooms being booked by the Home Office for tonight.
Cllr Jenny Hollingsbee, cabinet member for communities and deputy leader of FHDC, said: "The Home Office provided accommodation for 59 asylum seekers at the Grand Burstin Hotel, Folkestone, last night.
"This was a temporary arrangement put in place by the Home Office due to extenuating circumstances.
"We were informed of the situation, and all relevant partners were kept updated to ensure any required support could be provided.
"This was a one-off emergency measure, and all of the beds have since been vacated.”
A Home Office spokesman said: “We have made clear to our providers that the use of hotels is only ever acceptable as a short-term contingency measure.
"We are working closely with the provider to ensure that this situation is resolved as quickly as possible.”
This is not the first time asylum seekers have been put up at the Grand Burstin, run by Britannia Hotels.
In 2014, the Home Office transferred 130 asylum seekers into the harbour front hotel amid claims of overcrowding at a London site.
While 30 were moved on after one night, 100 people remained at the hotel for two weeks.
The Home Office at the time said they were not people who had entered the country illegally.
The news comes the same week that far right activists from Britain First started patrolling beaches on the lookout for migrants.