Woo hoo! They WILL refund after all. Phoned them back, sob story and lots of humble pie admitting all guilt. Really good of them because they don't have to. I'll lose £15 admin charge only if I rebook through their website or a night's stay otherwise (so £108). Either way, much much better than I thought. Phew!!!
Attila - the hotel was in the industrial part of LIC about a mile from the nearest subway. It really didn't look safe at all!!