first of all, anyone who says this wasn't a contract has no idea what a contract is. the hotel, through its website offered a 4 night spa package for $700/night (i'll get to the arithmetic later), the OP accepted that offer, and paid the deposit. that's the easy part. the hotel breached the contract by refusing to comply with its terms. also easy.

the real question is, what are the remedies for the hotel's breach? the hotel has three* legal options. one, it can refund your deposit in full (this is the customer's strongest right). two, it can honor the contracted rate (unlikely, based on what the OP said). three, it can try to negotiate a new contract in which the OP agrees to pay a higher rate in exchange for something else of value (e.g., discount on something else like dining, extra points, etc.). be wary if the hotel tries this ploy. if hotel does make an offer like this, OP may freely decline and demand the full refund. if it helps, the original offer and acceptance for $700/night was the original contract, which the hotel has now breached. any new offer would be for an entirely new, different contract (the terms of which include an agreement by the customer to give up their rights under the original contract).

i am very unsympathetic to so-called "mistakes" made by the travel industry. most of the time these are not honest mistakes, but the result of needlessly complicated fare rules or room rates and targeted promotional offers, coupled with the unwillingness to invest in proper quality control or IT to ensure that their promos work out the way they intended.

re the arithmetic: did the hotel offer $700/night, which totals $2800 over 4 nights, or did it offer $1100 the first two and $25 the second two, which totals $2250?

*i'm assuming that the OP has not booked a comparable stay at another hotel at a higher price, which would technically allow them to demand the difference from the original hotel. easy in theory, not so much in practice.