What should their action have been? Piss off people who are both rich enough to stay at the Ritz and unafraid of voicing such racist preferences and deprive an acceptably-colored employee of those tips, or send a black guy into a roomful of racists who have no qualms about expressing their dislike?

Why should the hotel deprive themselves of their money just because the people are jerks? It's not like they were asking for attractive female waitresses they could grope, or made the staff humiliate themselves to fulfil outrageous demands, or demanded a hotel where all the staff was white. The substance of the request was simply that a certain distance be maintained between black people and racists. In the hotel's position, I would have been grateful for this insight into their issues, both to protect my employees and to avoid problems or clashes involving my guests. Knowing where the racists are can also help them protect any black guests who might be staying there, such as when seating people in the restaurant and so on.

If we only did business with people we approved of, this would be a much less pleasant world, and complaining about the hotel's entirely correct behavior (at least to the extent it is described in the article) only gives support to people who refused services or transactions with people of whom they disapproved. Historically, when such policies are put into widespread use, the people who truly are hurt are seldom if ever the sort who stay at the Ritz, and more often people of the colors and speech patterns of which the limey bastards in the article disapprove.