To be fair, OP, some of the things I saw in the photos on the hotel website looked bad enough. In one, you can clearly see damp on the walls with the paint peeling off. You can see mould in the bath sealant. The radiator in one picture looks dirty. Many of the beds look like they have terrible mattresses - you can see the sagging through the duvets. In one of the photos of the cottages, the pots with conifers in outside the door look scruffy and there are weeds and grass where the building walls meet the path outside. It just seems unkempt really. Or as if the management just don't understand what attention to detail means. Even the creases in the bed linen tells you that it isn't a high end place. But I think I'd rather have a travelodge or premier Inn over that, then you know you're getting a clean & comfortable room, at least.
I'm guessing they have major cash flow problems. Running a place like that costs a hell of a lot of money, and if it was as tired as they claim when they took it on then perhaps they weren't in a position to invest in the refurbishment properly. Possibly the attitude problem has arisen as a result of the stress of knowing that they are out of their depth.
I had a terrible experience at a hotel on Mother's Day last year. My mum had been very ill so it was supposed to be a nice treat. When I complained, I got an email to ask if I was happy for the manager to call me, which I was. He apologised, said what had gone wrong shouldn't have gone wrong, said it wasn't their usual standard and they would welcome the chance to have us back free of charge to demonstrate their usual standard of service and food. I umm'd and aah'd for a minute to consider it as it had been a special function for Mother's Day so it wouldn't have been the same thing. He noticed my reticence and then said "Look, I am happy to refund you for the Mother's Day event too. We would just hate for you to go away with a bad impression of us. So do come for a free lunch as well so we can show you how we normally do things. Of course, this is on the understanding that you remove the poor review, as we do feel that it was a one off and doesn't reflect on our usual standard or give a true picture."
I was speaking on behalf of a group of us so felt a bit put on the spot. I agreed to remove the review, and have always regretted it. It was a fair reflection of what we'd experienced, so even though we were happy with the refund we should have let the review stand, with the edit about how they had resolved my complaint. On reflection, we all decided we didn't like the way they had kind of blackmailed us into removing the poor review so we decided against going back even for the free lunch. It's not my idea of transparent and honest customer service.
Good luck, OP. You're in the right.