I don’t think one night refund is too much to ask. I recently had a similar issue …
In October, I had a couple checkin on Thursday for a 5 night stay. When I checked with them on Friday morning, they advised that there was no hot water. I checked the water heater to discover that the controller (under warranty) had failed. A replacement wouldn’t arrive until Monday. After visiting several plumbing supply locations, and not able to find an in stock replacement, I informed the guests that it couldn’t get fixed until Monday. I gave them the following options:
A) a full refund, should they want to find an alternative place to stay.
B) use of a private guest room with en-suite bathroom in my adjacent house.
C) use of the en-suite bathroom of the guest room for showering while continuing to stay in the guest house
The opted for ‘C’. They said they liked the guest house too much to want to move. Since there is an external entrance (sliding door) to the guest room, they didn’t even need to come through my house, so we all maintained privacy.
Water heater part arrived on Monday, and was fixed by noon Monday.
They were very gracious, much more than I would have been. They were enjoying their vacation so much they wanted to stay an extra day and asked what the charge would be. I told them that there would be no charge for the extra day. When they discovered that the cost to change airfare would be prohibitive, they chose to leave as scheduled.
Before they checked out, I did provide them an unsolicited refund of one night for their inconvenience. They told me it was completely unnecessary, because they really enjoyed their stay, said that they plan to come back in the spring and have advised their friends and family of this guest house to stay at. They also provided a glowing 5 star review with no mention of the problem.
My point is, sometimes it’s more than the $, if you’re looking at the broader business picture.