OMG
YANBU
The only relevant pieces of information in your first post are that
- you don't have space to accommodate them
- you have plans that make it impossible to accommodate them
and the most important of all
3. you didn't invite them to stay and were (presumably) polite in your refusal of their request
If they choose not to come to the party because they can't stay with you then it is they that are denying your father the pleasure of their company, not you.
And how dare they complain to people that you're tight! You are hosting a large party for your family. That's a very generous thing to do.