Surfers Paradise resident Ralph Kogler was woken by a loud bang at 2am on Friday and ran to the window to see the roof of the nearby Hilton Hotel on the Gold Coast glitter strip alight.
Emergency services rushed to the scene where the roof was fully alight and parts of the building had turned to fireballs, falling to lower levels and starting more blazes.
"Exploding fragments landed on at least 10 different ledges down the building, making the first impression quite unbelievable, it looked like the whole side of the building was alight," Mr Kogler told AAP.
He said burning debris landed on a restaurant on the lower levels of the hotel, coffee shop tables and even an umbrella caught on fire.
"At the peak, the glow from all levels of fire was huge, making us fear our own evacuation," he said.
More than 400 people were evacuated from the hotel but the blaze was extinguished within 30 minutes.
Nobody required medical treatment and all guests were able to return to their rooms after the fire was extinguished.
Police believe the fire was not suspicious but further investigations are under way.
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