When I worked in the hotel industry, I would regularly check our tripadvisor reviews, and would email both the good and the bad to the appropriate parties, so they could respond accordingly, whether it be offer compensation to an inconvenienced guest, fix something drastically wrong with a room/facility, correct/praise employees responsible for the review, etc.

But threatening legal action?!!? That is beyond absurd and as a former hotel marketing manager see nothing but negativity and shortsidedness from the ownership.