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