Cost implications from financial distress play a significant role in a firm’s operation and profitability. Due to the significant importance of financial distress, understanding its determinants has had wide examination in the financial economics literature. This study examines three main determinants of the financial distress: leverage, capital intensity, and internationalization, for publicly traded U.S. lodging firms for the period 1990 to 2008. Findings suggest that leverage increases U.S. lodging firms’ financial distress while capital intensity and internationalization reduce distress.