This paper examined the financial ratios derived from the financial reports of the Korean hotel industry over 1987-2000. The ratios measuring liquidity, capital structure, efficiency, and growth were reviewed in this study. Especially, the growth rate of fixed tangible asset was unstable, implying volatile investment behavior of the Korean hotel industry. It also analyzed the effect of financial factors on its investment decision Among the variables expected to affect the investment decision, cash flow, debt ratio, and sales growth rate were not statistically significantly affecting the investment of the hotel industry. Only dividend payout ratio was negatively binding its investment decision. It implies that the less dividend payout, the more investment in the Korean hotel industry.