"And she brought forth her firstborn son, and wrapped him in swaddling clothes, and laid him in a manger; because there was no room for them in the inn." (Luke 2:7)
In "Word Focus" William Sillings writes:

When Jesus was born, there was no room in the inn (kataluma — literally, lodging, inn, or guest house). The inn was likely an eastern khan which is like a series of open-ended rooms or stalls opening into a common courtyard where the animals were kept. There was no room in the khan, so it was in the common courtyard where Jesus was born. There was no privacy even at this event for this weary, wayworn family. The fact that there was no room in the inn is typical of what was to happen to Jesus all through His life. The room reserved for Him, says Barclay, was on a cross. “He sought an entry to the overcrowded hearts of men; He could not find it; and still His search — and His rejection — go on.”

Source: Miracles of Jesus: Adult Teacher's Insights, page 16.