Sandra,
I apologize for not getting back to you sooner. Been MIA for a few days...busy busy!
But this is what I think...
Those "upgrades" they are offering you are actually downgrades.
I'd cancel...for sure! They did not deliver what they promised to deliver...a room at the Barcelo! You were booked, you paid and you are supposed to get what you paid for. If you want, tell them that you'll keep the airfare but cancel the hotel portion. It's usually the air that comes with all the cancelation penalties. I can book you hotel only and even though it's all but sold out, I
think I know where I can get the Barcelo from.
Worth a try, see what they say.