I had a close friend who would always, always do this. I think she couldn't say no to anyone and had vague boundaries.
She once turned up to a close family event I'd arranged with someone else's children in tow as she'd decided to mind them last minute. The children ran riot 
. It wasn't even an emergency.
Eventually I grew some courage and would call her about an hour before we were due to meet to confirm it was just her coming. Almost always there was another she had asked along. I'd say 'You have a lovely time but I won't meet up on this occasion, let's arrange another time'.
Finally, after many attempts the penny dropped. I think it was a theatre trip and she'd paid for tickets, I was paying her back and I still did. But to have the empty seats next to her made her realise I meant business.
She now arranges things with other friends and invites me as part of the group and I'm absolutely fine with that.
I just think, having made arrangements to do something it is rude to spring changes on the other person with out asking first.
I was and am always fine if there is a family emergency and changes have to be accommodated. It's when it was every single time I got cross.
OP, I would have pulled out too. There's no guarantee you'd get along, you've never met. It's a lot to assume, that you'd share a holiday without being consulted.
Really it is basic manners to ask before you invite an extra person.
She's now put you in this position and it makes you look like the bad guy when you are definitely not. She should have run it by you before inviting an extra person along.
I'd politely text and say that you wish her and her friend a lovely holiday but you don't feel comfortable spending your holiday with someone who you don't know.
You might be able to transfer the deposit to her friend so you won't lose out financially.
I think your friend, like mine, lacks boundaries.