Thousands of international students could be blocked from starting their courses in autumn owing to a lack of quarantine capacity, prompting universities in England to fear a loss of vital revenue.

Students coming from “red-list” countries in September will be required to self-isolate for 10 days but a shortage of suitable accommodation means arrivals could “significantly exceed” spaces, warned business and education leaders.

The Russell Group, representing 24 universities and other organisations, last week wrote to the government urging it to expand “quarantine hotel facilities” and relax visa restrictions for students so arrivals can be staggered for the next academic year.

Now is a “critical point” for university recruitment and international students’ decision-making, they said, adding that it was “vital” pupils could be confident of accessing their courses.

According to data from the Higher Education Statistics Agency, 556,625 international students studied in the UK over the 2019-20 academic year, around 107,000 from red-list countries. UCAS data and reports from university recruiters suggest this year’s intake may be at a similar level or higher.

The government said it has “thousands” of rooms in managed quarantine facilities with “ample additional capacity” for anticipated demand, but did not offer a precise figure. One senior leader in the travel sector said there were around 40,000 rooms available in total.

But university leaders and MPs said they understood current capacity to be lower and even the highest estimates fell well short of demand, particularly when combined with the needs of other international travellers. Uncertainty had left overseas undergraduates in limbo, they added.

The warning comes as higher education institutions struggle to assess the impact Covid travel restrictions will have on admissions of overseas graduates which many rely on for income.

Students from red-list countries at the highest risk from coronavirus, and from which travel to England is not permitted except for British and Irish nationals and those with residency status, face the greatest uncertainty.

Lord Karan Bilimoria, president of the UK Council for International Student Affairs, said that if the number of incoming students from red-list countries was similar to the 2019-20 academic year it “would significantly exceed” available managed quarantine capacity.

“Leading university representatives are clear about the urgent need for ministers to come together to plan how to enable international students from red-list countries to take up their places for the coming academic year, when it is safe to do so,” he said.

Under current visa requirements students must arrive for face-to-face teaching by September 27 in order to qualify for a graduate visa that allows them to remain in the UK after study.

Paul Blomfield, Labour chair of the all party parliamentary group for students, said the government should act immediately to make visa requirements more flexible to allow students to arrive over an extended period without losing their right to stay.

“Ministers must make this change now to allow students to plan effectively, without incurring additional expense with needless flight and accommodation changes,” he said.

Universities UK International, which represents the sector, said it was “hopeful” that further concessions would be made to ease the process. “Throughout the pandemic the government has acted swiftly to support international students,” it said.

The Department of Education said hotel quarantine was a “necessary measure” for stopping the spread of Covid variants. “Specific graduate route visa concessions will ensure students benefit from our post-study work offer, even if their arrival is delayed,” it said.

According to NHS data, since facilities opened in February the number of people staying in hotel quarantine in England rose significantly to 9,751 in early June, while the total of those starting quarantine at home has fallen.