Caraiman is the third hotel built in 1881 at the initiative of the Civil Hospitals Administration in Sinaia according to the plan of the architect Jean Pompilian.
The first hotel manager was the Austrian Josej Ungarth, who was employed by Prince Dimitrie Ghica. In 1903, the hotel was expanded with another floor and an attic, resulting in a change of the facade in the classic Romanian architectural style according to the plan of the architect Petre Antonescu.
During both world wars it served as a hospital for the wounded.