This simple sermon from Ben Witherington is well worth a read.
In other words, all this silliness about ‘no room at the Holiday Inn’ for the Holy family, is not at all what Luke is talking about. This is not a story about ‘no room in the inn’ or about the world’s giving Jesus the cold shoulder. It’s a story about no inn in the room! It’s a story about a family making do when more relatives than expected suddenly show up on the doorstep. It’s a story most of us can relate to in one way or another. Jesus was born in his relative’s home, in the place where they kept the most precious of their animals. One can well imagine the smell in that room, and probably the shock of the Magi when they saw where the King was born.
But this story is not meant to meet our expectations or desires about what a Christmas story must be like. Jesus did not come to meet our expectations or desires—he came to meet our needs. George MacDonald puts it this way—‘We were all looking for a king to slay our foes and lift us high, but thou camst a little baby thing, that made a mother cry.” Jesus came as he did to make clear that no one and no place however humble was beneath his dignity, and every age and stage of life he would hallow, and save and sanctify.