Excellent posts from Mr Punky there
It won't be the Co-Op saying this Mark, they're just the agent for the operator. Seems to me that the tour op is probably being fair in offering an alternative hotel of a similar standard (presumably - if not, then there's a case to be had) in the same resort, given that the Foreign Office has not advised against travel to Egypt. I personally would not expect to get a more expensive holiday in Spain and
not make up the difference - must be a decent holiday if it's more expensive than Egypt surely?!
BTW I have a few Gazeteer's here (the big books agents keep under their desks) - give me the name of the replacement hotel and I'll see how they compare (PM if you want).