The thing is the customer didn't want to "back out", they simply wanted to redirect business within the company due to unforeseen circumstances -- or just plain bad planning, but either way it deosn't really matter.
I think that having a night "manager" who is not authorized to make decisions is a problem with the property management. That alone to me is enough to hit them with the 100% Satisfaction Guarantee.
Yes, they are not obligated to honor a cancellation. But I think in this case it should have been done as a customer courtesy. Since is wasn't done the way I think it should be done, it therefore fails to meet my standards of 100% satisfaction, plain and simple.
If they change the guarantee to Mostly Satisfied, then I maybe I'd let is slide.