Unpopular opinion but YTA, I'm not going to throw a party for 500 people at my house because there's no room. Similarly I'm not going to invite my 80+yo mother to stay when I have no room in the house. All kids have is their items and private space, it seems like he is being a brat but in reality it's one of the most important things you're wanting to take away. You can't hold some agreement you made with a ten year old to them for years. If it's not a big deal why don't you and your husband sleep on the lounge? Better yet why don't you guys go and visit the grandmother?

And what's in this kids room, if you's aren't going away on a holiday is there like an Xbox/PC something in old mates room that he won't have access too aswell? If that's the case maybe you can find a compromise instead of going on a parental power trip.