Can I pray in a room with a toilet?

It depends on the room. Praying inside the toilet or bathroom itself is disliked by most scholars (and invalid in the Hanbali school). But a bedroom or hotel room with an en-suite toilet behind a door is fine: just pray on a clean spot in the main room.

The whole earth is a place of prayer

Islam makes prayer easy. The Prophet ﷺ said that the earth has been made a mosque and a means of purification for him, so wherever the time of prayer comes, a person may pray there (Sahih al-Bukhari 335). You don't need a mosque or a special room.

There are a few exceptions, though. The Prophet ﷺ said the whole earth is a place of prayer except graveyards and the bathhouse (Sunan Abi Dawud 492). Scholars applied this, even more strongly, to toilets, since they are places of impurity where we don't even mention Allah's name aloud.

What the schools say

Hanafi, Maliki and Shafi'i: praying inside a toilet or bathroom is makruh (disliked). If the spot you prayed on was clean, the prayer still counts.
Hanbali: a prayer performed inside a toilet is not valid and should be repeated.
All agree: the exact place where you pray must be free of urine and other najasah.

Bedrooms, hotel rooms and studio flats

A room is not a "toilet" just because a bathroom opens off it. An en-suite bedroom, a hotel room or a small student studio is a normal living space, and praying there is perfectly fine. A few simple habits help:

Close the bathroom door before you start.
Pray on a clean part of the floor or on a mat, not on a bathroom rug.
If you can, avoid facing straight into an open toilet.

See How do I pray in a hotel room? and Do I need a prayer mat to pray?

Wudu is different

Making wudu at a bathroom sink is completely normal in Europe and the USA. Scholars only advise against saying dhikr out loud inside the toilet, so say "Bismillah" quietly in your heart or before you go in. See Can I make wudu in the bathroom?

إِنَّ ٱللَّهَ يُحِبُّ ٱلتَّوَّٰبِينَ وَيُحِبُّ ٱلْمُتَطَهِّرِينَ "Indeed, Allah loves those who are constantly repentant and loves those who purify themselves." Quran 2:222

What if there's truly nowhere else?

If you are somewhere where the only private space is a large, clean bathroom (for example on a long train ride or at some workplaces), most scholars would still say to pray rather than miss the time, ideally on a clean spot away from the toilet. Then look for a better space for next time, such as a quiet corner, a fitting room or an empty office.

Key points

Praying inside a toilet is disliked; the Hanbali school says it's invalid.
An en-suite bedroom or hotel room is fine to pray in.
Close the bathroom door and pray on a clean spot.
Wudu at a bathroom sink is perfectly normal.

Tip: In a new hotel room or flat, pick your prayer spot as soon as you arrive: check the qibla, choose a clean corner away from the bathroom door, and leave your mat folded there.