A huge backlog of cases and slow processing is exacerbating the issue, according to the charity.
The backlog is a result of people being unable to leave the processing system, according to a Refugee Council representative.
It said it had received reports of children living at the hotels being raped.
The charity warned they are at risk of human trafficking, and urged the Government to improved safeguarding measures.
Kama Petruczenko, a senior policy analyst, told Express.co.uk: “Some politicians are saying that [people who are claiming asylum] are a threat, but actually the opposite is happening – people seeking asylum in hotels have sadly become targets for far-right terrorist attacks and we know that people face other safeguarding risks – for example, we had issues of children being raped in hotels and many instances of harassment.
“There are also issues with people being trafficked from hotels because the safeguards are so poor. But these problems are preventable, and we need to protect people who experienced so much and need safety in the UK.”
READ MORE: Suella Braverman admits UK has ‘failed to control borders’