Five engines were in attendance.
Fire crews were called to the Channel View Hotel in Sandown this afternoon (Wednesday).
Five engines from Shanklin, Newport, Ventnor and Ryde attended the scene, on Royal Street, off Beachfield Road.
Ambulance and police crews were also in attendence.
Hampshire and Isle of Wight Fire and Rescue service said the fire started in the hotel's laundry room.
Hotel guests have been waiting outside since 3.45pm, with no estimate on when they can go back inside.
Smoke has observed coming from the back of the building, however smoke can no longer be seen.
A spokesperson for the service said the fire is now out.
Royal Street is currently closed to traffic.
Read more: Fire breaks out at Sandown hotel
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