Host asks to cancel so they can raise the price: what are my options?

I’m traveling around Bali with a couple of friends and found a great deal on a villa in Gili Trawangan. The price was significantly cheaper than nearby options, so I booked two nights for £48.52 per night.

Soon after, the hosts reached out with this message:
“We apologize for the inconvenience. It appears that there was an error in the pricing calculation for your reservation. The regular price at our location is around IDR 4,150,000 per night in July. Therefore, we kindly request you temporarily cancel your reservation while we fix the error. We deeply apologize for the inconvenience caused.”

Legally and ethically, it seems the right thing would be to cancel, but are there circumstances in which I can keep the booking at the advertised price? I booked in good faith at the price shown, so I would expect the hosts to honor the agreement.

What should I do?

Note: 4,150,000 IDR is roughly £220, which means the property was discounted by about 80%.