The blaze erupted at the Hilton Hotel in Surfers Paradise on the Gold Coast just before 2am.
Witnesses heard a loud explosion and saw the H in the Hilton sign on fire.
Vision captured of the fire shows burning debris falling from the top of the hotel, which landed on every ledge of the bottom eight storeys of the tower.
There were fears among guests the whole building would go up in flames.
“I went out on the verandah, I could smell smoke,” one guest said.
“I went out in the hallway, I could smell smoke then I said ‘no, we’ve got to go’.”
Another hotel guest told Today the fire erupted and “stuff started falling”.
Emergency services rushed to the scene and dozens of firefighters spent an hour extinguishing the blaze.
Guests were seen walking out of the hotel and waiting out the front.
Firefighters assisted one woman with mobility issues down the stairs but crews called for extra assistance on the 25th floor.
No one was reported injured during the fire.
The sirens from emergency services vehicles woke up residents in the vicinity of the hotel.
Residents have since been allowed to return to the area and the cause of the fire is under investigation.
