The hotel held a grand opening on December 20, 1886, and was featured in a special edition of the "Austin Daily Statesman". On January 1, 1887, Governor Sul Ross held his inaugural ball in its ballroom, beginning a tradition for every Texas governor since. In May 1887, less than a year after it opened, Driskill was forced to close the hotel, as he could no longer afford to operate the hotel following a harsh winter and drought that killed his cattle inventory. In addition, S.E. McIlhenny, the hotel's general manager, and half of the staff were hired by the Beach Hotel in Galveston, which expedited the closure. Driskill sold the hotel in 1888 to his brother-in-law, Jim "Doc" Day, who reopened the hotel in January 1888.