Originally Posted by
turtlemichael
The rules talk about a space available upgrade to a preferred room, not a one category upgrade. A two category upgrade would be within the rules. Go argue it when faced with the response the OP got.
From the terms and conditions:
◾At Waldorf Astoria® Hotels & Resorts, Conrad® Hotels & Resorts, Hilton Hotels & Resorts, Curio - A Collection by Hilton, and DoubleTree by Hilton™ properties, Diamond HHonors guests will receive upgrades to preferred rooms, based on availability at the time of check-in (excludes Napua Tower at Grand Wailea and Imperial Floor at Rome Cavalieri). Upgrades for Diamond HHonors guests may include the next-best available room from the room type booked. Upgrades may also be rooms with desirable views, corner rooms, rooms on high floors, rooms with special amenities, rooms on Executive Floors, or suites, as identified by each property. Upgrades exclude executive suites, villas and specialty accommodations (which may include, but not limited to, "Vista" and "Villa" accommodation types), subject to the discretion of the hotel.
The t and c has enough room in it that this hotel (or any other) can deny the upgrade at any time. For example, they could limit upgrades only to certain view rooms; doesn't matter if the next category room is available for booking or not.
As stated by Kacee above, choose another Hilton property at that destination when this occurs and also note this when filling out the survey.