A Google Web Search Help thread has an update on the search service from Googler, Jacqueline, who said:
Good news! We've expanded the Hotel Finder experiment to include hotels around the world. It's still in English only with hotel prices in US dollars, but I know a few of you will be glad to hear this news :)
So now, you can search for hotels in London and get listings. But you must keep in mind that the hotel listings are in US dollars and are still in English only. But if you are an American traveler, this can come in handy.
Forum discussion at Google Web Search Help.