Does my cousin need to book a hotel?

[ashimz91]

My mum is sponsoring my aunt from India.
we have a 3 bedroom house, with 3 people living here already (mum,myself and sister).
mum is sponsoring my aunt,uncle and her 2 daughters one is married.
can my cousin and her husband book a hotel even though we are sponsoring as the UKBA could say there is not enough room in the house.
would we need to show hotel bookings?
what should the letter include?and what documents need to be enclosed.many thanks