To assess the impact of the recession on the financial performances of the lodging industry, this study examines sample firms’ financial ratios in 2006, the year immediately prior to the recession, to those in 2008, the year during which the recession was in full swing. The findings of this study indicate that both non-gaming hotels and casino hotels experienced deterioration in all five aspects of their financials, namely liquidity, leverage, solvency, efficiency and profitability. To overcome the recession impact and better cope with future recessions, hotel firms should strive to use existing assets to maximize sales revenue and avoid excessive expansions. In addition, both regular hotel firms and casino hotel firms need to move away from heavy debt financing. A prudent and conservative assets growth policy is necessary for them to curb the leverage and increase solvency.