What if you call the hotel and talk to them and ask if you can send them a check? Or if the ornament was special, offer to send it back? But the check would be less expensive and then Davina will own it, and it might be a reminder every Christmas of how much she's grown up and away from that day.
Once Kirby came home from playing with the neighbor, and he had a twenty-dollar bill in his hand. He was five or six, I think. He was looking at it oddly, and he said "Look what I found in the street."
Wow, I said. Was there anyone out there who might've dropped it? No, he said, but he seemed dazed, rather than excited as I thought he would have been if he found twenty dollars.
In a while the neighbor's mom called and said there had been a twenty dollar bill and did I think Kirby might have gotten it. I said yes, and we'd come over, so he gave it back to her and said sorry and she was nice about it. We talked a bit and I said I guess once he had it he couldn't figure out how to return it, and we all agreed it was very awkward, but at least he wasn't sneaky about it.
Once money was missing from the karate dojo, when Kirby was ten or eleven and the sensei called me to ask whether Kirby might have gotten it, since he had been in the dressing room. One of the guys had left cash in his shoe. It had been over a day since it had happened, and Kirby had neither acted funny, nor had he gone and bought any thing. I figured if he had cash he would have bought Pokemon cards or whatever the equivalent thing was in those days (I think it was Pokemon days). But I admitted that he had once taken that other money from a neighbor and returned it.
The teacher was stressed, and he liked Kirby, but he said they couldn't have a thief at the dojo. Kirby said he didn't get it, and I believed him but the teacher was doubtful and worried. They found the money another day or two later, though. It had fallen behind the shelf or some such, so Kirby was cleared and the other guy had the money, and as the years passed, there, Kirby became the most trusted student and used to housesit (the sensei lived in the building the dojo and the store were in).
I think treating it was an awkward and and unfortunate situation that needs to be resolved, without condemning the child is the way to go.