Oh no 
I need to write an English letter until tomorrow !
I will do my best, and if you find any wrong, impolite or clumsy expressions,
please let me know !
" Dear ○○○（name）
I am awfully sorry for our distress decision , so are host families.
Under the circumstances in Japan, we must devise throughgoing measures to prevent the epidemic. In my opinion, that is because our national character (which is very careful of each other not to cause troubles) and the fact that a public takes first priority. I hope you will understand.
Also we thought that you could have received a full refund of your deposit when you cancel more than a month before , as it is possible in Japan. Please read the Mayor's letter about the details.
Again, we are sorry for all of this.
Most sincerely,
×××（name) "
So how do you think ?
The situation is this;
The deligation from abroad was going to come to Japan, but we had to make the decision to cancel because of the epidemic of Swine.
SeasideMan
Pro 
How about this:
" Dear ○○○（name）
I am awfully sorry for this difficult decision, and so are our host families.
Because of the circumstances in Japan, we must use measures to prevent the spread of the epidemic. Our national character in Japan is to take care of each other and not cause trouble and public safety takes first priority. I hope you will understand.
Also, we thought that you could receive a full refund of your deposit when you cancel more than a month in advance, as this is possible in Japan. Please read the Mayor's letter about the details.
Again, we are sorry for all of this.
Most sincerely,
×××（name) "