Just say 'Friend, I'd love to have you visit and stay over, but in all honesty, I'm embarrassed by the state of the place. Tell her what's wrong, and then end by saying, I'll totally understand if you'd rather stay in a hotel and meet up there, but if you'd like to come, at least you know what to expect now'. A good friend will do their absolute best to put you at ease, she might say 'don't worry, it's fine, I understand and would still like to come', or she might say, 'No problem, happy to stay in a hotel, and we can get together there if you prefer'.
I used to live in an old house, which as a single woman I was struggling to afford all the work that needed doing, but gradually by learning how to DIY, I began to get some of the rooms done. Then, one day my boss came over to drop something off unexpectedly, we had a great relationship, so he quite naturally said 'Stick the kettle on, and let's have a cuppa before I head back to the office'. He was one of the head honcho's of the business, and earned mega bucks, while I was just a lowly secretary. I was really embarrassed, as to get to the kitchen, you had to walk through the worst room of the house, so of course I waffled on about the plans I had, but said that it would have to wait until I could afford it. To my surprise he said 'I really envy you, you know'. I said 'why on earth would you say that, when you've got everything your heart could desire?' To which he responded, 'but I was so much happier while I was having to work hard to get things, now it's all too easy, and doesn't mean nearly as much when you can just go out and buy anything you want, or need, whereas I can see that you're working hard to make this place into a home, and I would love to be in your shoes again.' Since then, I've stopped worrying about what people think of me or my home, as the chances are ,that even if they have nicer things than I do, they might not be nearly as happy.