I have a similar story. I booked a prrepaid stay on HotelPower in Dec 2018 (as routed by Trip Advisor) and got the exact same letter as OP received (but in the post) and I called the hotel on 23rd July (i got the letter the previous day). The hotel said that the reservation was fine and everything was good. I was relieved.
I travelled to my destination in Canada on 31st July and find that the reservation was cancelled. Apparently, these A$$holes at Hotel Power cancelled the reservation on 23rd July (which was the last day to cancel without penalty and must have cancelled during the day as it was active and fine in the morning when i called).
I have put a Charge back with Visa the next day and they were quite sympathetic and have provided a temp refund and promised a complete refund once investigation is completed.
The modus operandi seems to be to get prepaid amounts from Customers for a stay long in the future but actually booking refundable stays with the hotel. That way the Reservation can be cancelled in the future and HotelPower does not have to pay anything to the hotel.