I have to admit that this is pretty poor process, although it isn't that surprising. Perhaps at this point the hotel should just offer everyone on the list a choice of 1 free night, or the equivalent in Starpoints. I'm curious of how many people would be willing to take their pick of these options and just be done with it - no more complaining, etc.
It seems like the more they do anything, the worse it gets, but they apparently don't have whatever it takes to make it stop.