Complete nonsense, Old not bold!
The requirements for hotel accommodation for both flight and cabin crew were clearly laid down and a little different. In both cases there had to be 24hr room service, quiet rooms and blackout curtains.
The Captain got a better room (quite right too) but not necessarily a suite. If a suite was available at a reasonable price it would be put in the contract. If it was not in the contract but one was available on the day hotels would often consider it commercially justifiable to give it to the Captain (BOAC had large numbers of Management Captains out on the routes and hotels valued their airline contracts).
The First Officers did not get a better room than the Flight Engineer.
The flight crew did not get better hotels than the cabin crew. More often than not there was only one hotel that fitted the criteria and both crews would stay together. Where there was a choice the cabin crew representatives often stated a preference for, say, a beach hotel if available whereas the flight crew representatives invariably preferred a city centre location. It happened that in those days city centre hotels were usually of better quality, but not always (It did however have a positive effect on flight crew meal allowances). The big luxury beach resorts had yet to appear in most places.
Flight crew did not generally pilfer from rooms. It wasn't worth losing their (then) well-paid jobs for. Your story is ... just that. Cabin crew had relatively low basic pay rates in those days and they were more tempted. However this only became a significant problem when the Gulf region began building new 5-star hotels and fitting them out with crystal. The Alain Palace at AUH was one of these and you may have been thinking of that.
BOAC did not turn a blind eye to pilfering, which was a serious offence if reported to them. Hotels themselves however did occasionally turn a blind eye as their contracts were very lucrative and in those days passengers would often be attracted to the hotels where the crews stayed. Where crew were caught red-handed the hotel would usually make an "offer" (for that person to replace the item, or pay for repairs) which crew members invariably accepted to prevent the Company becoming involved.
On the separate subject of VC10 delayed gear retraction, with no brake temp gauges fitted there were brake cooling charts to be consulted instead. On a very short turn-round under some conditions they could require the gear to be left down after takeoff. I certainly remember operating Dacca-Calcutta with the gear down all the (not very long) way. I doubt the charts by themselves required such a long extension though.