“I have worked in that industry. You either provide the service or you return the money, unless there is a cancellation fee.”
Their cancellation fee is clearly stated.
It’s a lot more complicated than that. They resold the service; they apparently had no fraud prevention in place; and, they took payment via credit card which subjects both sides of the transactions to the terms and conditions of the credit card company. Like I said, they don’t have a loss because they resold the fraudulently cancelled rooms, a fraud against which apparently they had no protection.
Legally there is also the argument about frustration of purpose, which a fraudulent cancellation is clearly an example of.