For 20 years, I worked at a hotel chain. We had deeply discounted staff rates (Free when I started), but when confirmed, they were always honored. This hotel should be honoring it's commitment. The acceptance of the rate only proves their poor forcasting, which you should not be penalized for.
On an employee rate, I was always treated with distain. But the price still made it worth it.
I'd look for alternate rooms, and enjoy the trip dispite their poor handling of the situation.
