This paper explores the role of village tourism in promoting sustainable practices and enhancing destination branding, using the case study of Montegridolfo and Palazzo Viviani, a luxury hotel in Italy's Riviera Romagnola. Through ethnographic research, we investigate the motivations behind establishing a high-end hotel in a small,rich village far from mainstream tourist routes. The study examines how luxury tourism can foster sustainable development, support unique destination branding, and balance tourism growth with the preservation of cultural heritage and local identity. The case of Palazzo Viviani demonstrates the integration of eco-sustainable strategies within the luxury sector, highlighting the interplay between environmental responsibility, economic growth, and cultural revitalization. Our findings suggest that luxury tourism when properly managed, can provide ethical and economically sound development opportunities for rural destinations. The paper concludes by offering strategic insights for developing sustainable luxury tourism models in similar small village settings