I think the hotel thing was the very last gasp of the hangover from the era of 'distressed gentlefolk', when it was expected that elderly people of a certain class and upbringing didnβt live by themselves and - horrors - do their own cooking and housework. One had 'people' to do that sort of thing, or had done so in one's former life.
There's a great book by Mollie Panter-Downes called One Fine Day (which would be a good candidate for the RDBC!) that pins down exactly the phenomenon of women just post-war, having to grapple with not having servants any more. The main character has to pitch in and do the cooking and washing-up, and can see that this is the future, but her husband is baffled and outraged by it - theyβve spent their whole lives assuming someone else does those things, and itβs a massive shift to get their heads round.
A hotel that was cheap enough to allow you to live on the meagre interest from your capital seemed a solution that would enable elderly people of that class to retain their perceived dignity and status - except of course it didnβt; they knew it and everyone else knew it. But - βkeeping up appearances' was all.
Plus, the idea of living with or near your adult children was also less of a thing than now. Mrs Palfrey's awful daughter had zero interest in her, but as readytostartagain says, sheβd almost certainly have been sent back home to school as a fairly young child so they probably didnβt have much of a functioning mother-daughter relationship.
The novel was published in 1971 and Iβd guess those hotels with their βfavourable terms' were very much on their last legs around then. Corporate chains would surely have been the final hammer-blow for them.
Sorry for the essay!