Fourteen people were in the hotel in Kroev when one storey of the building collapsed about 11pm on Tuesday. Police said five were able to get out of the building unhurt because they were not in the part that collapsed, but others were trapped.
Rescuers were able to contact some of them by mobile phone. But getting to them proved difficult because the collapse of one storey left two ceilings lying on top of each other, according to Joerg Teusch, fire and disaster protection inspector for the Bernkastel-Wittlich district.
"We have to proceed with caution because the entire building structure is like a house of cards. If we pull on the wrong card, this building is sure to collapse," he said as rescuers worked through the wreckage on Wednesday morning.
A woman who was among the seven trapped was the last to be rescued Wednesday night, police said.
Michael Ebling, the top security official in Rhineland-Palatinate state, where Kroev is located, said the fact that so many people could be rescued "stands out in view of this event, the damage and the dimensions one can see with the naked eye".
Among the first to be saved was a two-year-old child, who was pulled out unharmed, and the child's mother, who was rescued with minor injuries. The child's father was rescued later.
"We all had tears in our eyes and I still feel the same now. The whole story has a very emotional component, because when we arrived, when we looked at the building, it looked like we weren't taking anyone out," Teusch said at a news conference.
Teusch said the cause of the structural collapse is yet to be determined.
The original hotel building is believed to date back to the 17th century, but additional storeys were added around 1980, he said. He added that work was being done on the building on Tuesday, but it wasn't clear whether there was any link between that and the collapse.
Regional public broadcaster SWR said that witnesses reported hearing a bang and seeing a large cloud of dust at the time of the collapse.
The rescue operation involved 250 emergency workers, including drone specialists, as well as rescue dogs.
"There was no option (to use) stairs, house entrances, doors or windows, because they were simply no longer there," Teusch said.
Authorities also evacuated 21 people from three buildings immediately around the damaged hotel. The hotel guests at the time of the collapse were largely German, apart from a Dutch family.
Two Germans, a man and a woman, died. Rescuers were able to recover one of the bodies but police said they would have to remove a section of the building on Thursday to recover the other.
Kroev is located along a picturesque section of the Mosel near the larger resort town of Traben-Trarbach. It has about 2200 inhabitants.
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