Sounds like the hotel was overbooked and they attempted a version of "walking" the guest. Sometimes when guests are walked, the hotel finds them the alternate lodging and pays any difference. Sometimes hotels just turn people away saying they are full. The OP stood their ground and got a room, but someone that day was in the same boat and didn't get a room. It happens all the time in the hotel industry. Hotels will attempt to walk lower revenue guests first, or guests that booked through third parties instead of booking direct. It's no different than airlines bumping you from your flight - except that there aren't any rules or regulations that require a hotel to take care of you in an overbooking situation. I'm sorry it happened to the OP - it's not a pleasant position to be in.