From the Hotel Babylon pages of the BBC web site:
"It was always going to be impossible to film in a real five-star hotel. Because of the length of time we would be filming and the amount of disruption we would inevitably cause, we needed to purpose build our hotel from scratch," explains Neame. "This allowed us to conceive a hotel entirely to our own specifications, while making sure that the whole budget was going on the screen and not being wasted on incidentals that the audience will never benefit from, such as travel and transport."
http://www.bbc.co.uk/drama/hotelbabylon/making _of2.shtml