To be fair to the hotel, there don't seem to be any discounts (2-4-1, IDEX2 etc) available for 7-9 November, so they are only asking for the best rate they currently offer.
Offering you a £150 per night discount off your rate for those nights (on the basis that they don't have to offer you anything for not turning up for the first 2 nights) is not a bad deal.
And your travel insurance may allow you to double dip and reclaim the £300 for the first 2 nights anyway ...