Tourism and hospitality have received an immense attention from scholars, policy holders, decision makers and other important stakeholders in Belgrade, a main tourist destination of Serbia. The aim of this paper is to determine the main drivers of profit margins in the hotel sector in Belgrade. A particular aim is to explore the effects of variables - size, market concentration, and market share and customer satisfaction - on hotel profit margins. The study analyzed the secondary reliable sources. The data were analyzed with correlations and regressions. The results indicate that customer perception is a paramount factor driving the financial performance of hotels. These findings could be useful to scholars and practitioners interested in business performances of Belgrade hotels.