They could have, but it also depends on when they expected to originally recover the flight at 07:00 then hotel might not be as desirable as OP claiming Duty Of Care makes out.

The airline's priority is to recover the schedule, not ensure OP sleeps. In fact I am skeptical whether a UK261 claim can be made had the plane been delayed on the other end (e.g. CX254 went down instead but the expected recovery time was 07:00).