Industry standard (at least in the U.S.) in a "walk" situation is for the hotel to pay for the first night. Guests pay nothing. They return to the original hotel for successive nights and are upgraded and given an apology letter from the GM with room service amenities.

Four Seasons is a U.S. chain, so they should follow a similar procedure. I suspect they didn't want to go through the hassle of refunding the money, partly because it was a package and they're not supposed to reveal the rate.

HOWEVER--they could easily have offered you the equivalent in points of a free night at the Four Seasons for each of your room. They should have given you that PLUS the free meals.

Definitely raise a stink with corporate and anyone else who will listen.