The Commander made the correct decision. Check your rules & regs. It is about time that all crew hotels are made to understand & brief all staff as to the requirements. Hotel management are the folks responsible for this situation. Crew (both Flt Deck & Cabin) should have been placed as far away as poss from the external/internal disturbance. BA Country Manager/VIDP Station Manager are the ON SITE folks who should take the can. When acting as overseas SM it was my task/responsibility to ensure that crew rest hotac rules were applied, I had to check & clear for use, the allocated rooms.
Good on ya Captain