Oh the emotional baggage of Christmas. I can see why your parents might feel "pushed out" but it can work both ways. Looking back, my parents always chose to stay in a upmarket hotel in Central London expecting DH to pick them up and take them home on Christmas and Boxing Days. At the time it irritated me as it meant he couldn't drink and I felt they must have thought our conditions were too primitive haphazard for them.
However, with the benefit of hindsight,it meant they weren't woken at silly o clock by overexcited toddlers, they had a better bed and an en suite bathroom, in fact it was probably Mum's "treat" to enjoy a few days of luxury.
In your case, I would have hoped the DDs would offer a room for their elderly grandparents so that they could have early night or lie down (especially if in pain). If the B&B is a 5* one it might be different!
But do as you would be done by, perhaps in the future, with tinies in the house a B&B might be preferable.
Never mind and , bottom line, don't let it spoil Christmas
Estranged Son and Future Granddaughter
To think that London, or anywhere else for that matter, does not belong to any one demographic