“To dig,” of course, basically means “to excavate or make a hole in the ground or something else,” but “dig” has long spawned figurative and slang meanings, from the 18th century “dig” meaning “to study hard” (which led eventually to the 1930s “dig” meaning “to understand”) to the 1940s “dig” meaning “to pay” (from digging deep in one’s pockets). “Diggings” as a colloquial term for “lodgings” or “residence” does indeed seem to be derived from a humorous sense of “a glorified burrow,” perhaps with overtones of a place where a student might spend hours “digging” in the “studying” sense.

In any case, “diggings” first appeared in early 19th century Britain, and was used by popular writers, including Dickens, to lend color to their characters (“She won’t be taken with a cold chill when she realises what is being done in these diggings?” — Martin Chuzzlewit, 1844). “Digs,” a jaunty abbreviation of “diggings,” had appeared by the end of the 19th century.

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“digs” for a hotel room, in turn, is just an extension of “digs” for any living quarters. Hope that helped.

1. Refers to digging in. i.e. digging a foxhole, trench or pit in which to live temporarily.

2. Refers to where someone digs or works.

Personally, I prefer the reference to a pit, as most digs seemed to be like that when I was young!