What can you do when Marriott cancels an impending reservation?

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I got a question the other day from reader Eugene, who writes in to say

I booked a 7 night stay at the Sheraton Rio De Janeiro, using the air + hotel voucher. I chose the location due to it being a category 4 and the location. It was booked under my daughters name(she is a minor). I get an email today informing me that reservations are being canceled due to hotel maintenance. The reservation was for March 3-10.This is the same time as the carnival so there is a shortage of rooms in the area. If there are any rooms they are cash only rooms, with prices starting for the needed nights around $400. Does the hotel have any obligation to accommodate me or provide some form of compensation? There are 4 hotels there, one is…

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