I don’t think you have much of a choice other than to accept what they have offered you.
In the future, I’d suggest that you negotiate all this at the point it happens. The frustrating part for you is that they stayed and then negotiated after the fact.
I had something very similar happen to me last autumn. What I had done was to offer them the opportunity to cancel (with a full refund after the first day) and find an alternative location. They declined because they liked the place they were staying and were comfortable with the temporary remedy.
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