Can an owner of a wedding venue cancel the contract and give money back?

Assuming that there is no provision in the contract giving the venue the right to cancel, you are right in theory (except that it is unlikely that the contract is with the owners rather than the business that your daughter contracted with, which is likely a corporation or llc; except in rare instances, the owners would not personally be obligated).  However, as a practical matter, while your daughter might be entitled to money damages for the breach (i.e. the extra amount it would cost her to book a comparable place), it is  unlikely that she could get a court to compel the venue to perform the contract (as opposed to compensating her for the money damages she would suffer from the breach), especially in the short time before the event.  More practically, you don't want to have the wedding in a place which doesn't want to hold it, and doesn't care about any repeat business.  There are likey to be problems which ruin the wedding, either through the venue's not caring, or even deliberately.  You don't want to be in a situation on your daughter's wedding where not enough servers have showed up, or there is no liquor at the bar, or there's no place for the band to set up, etc etc.