I just had this same problem. First, I made sure to have a couple pleasant/fun exchanges with them so they knew I liked them, then I said "I feel awkard but I need to talk to you about the mothballs. I thought I would get used to the smell, but I haven't, and a friend who visited today commented on the odour. So I researched mothballs and learned they are a pesticide and even breathing the smell of it means you are being affected. Sorry, but because of that, and because of my house rules about scents, I have to ask you to put them outside in my shed until you leave." They did so right away. Even so, I am now cleaning the room and using vinegar only in the first wash as several websites recommended, and the odour is still in bedding and towels. I have read that you should not use detergent until the vinegar has eliminated the smell, so I am not sure what to do. I have blocked off the next 2 nights (thankfully I was unbooked) so I can air out the room and get the curtains, towels, floor mats, sheets etc to a professional cleaner.
There's nothing these guests could do to help it. They are just moving here from India, and mothballs are routinely used there due to pest issues. I'm happy they didn't bring infested luggage into my room! However this is going to be a huge hassle for clean up and I might need to give my next guests a partial refund.
I just amended my house rules saying that if any odours remain in bedding after their check out that I will retain the entire damage deposit. …..