A Herald reporter said Wellesley St from Nelson St to Hobson St was blocked off while guests waited outside.
John, who was visiting from Sydney, was on the sixth floor when he received notice to evacuate and left the room with his wife, son and daughter.
Fire services were already outside by the time they got outside, he told the Herald.
Another woman said she was dining in the restaurant when the alarm was raised.
She emerged to see a mass of fire trucks outside.
“Best holiday ever,” she joked.
Staff at the neighbouring Femme Fatale said they were alerted to the emergency after water poured into their premises.
“Just a big fat water burst came through the back wall and roof to our smoko area,” said Summer Breeze.
“No one was injured, just a bit of shock.
“I’m just glad their building didn’t fall on our building, that would have been crazy.”
“The fire department are amazing,” added Krystal.
“They’re wet-vacing, and clearing as much water as they can.”
Guests have since been given the all-clear to return to the building, a Herald reporter at the scene was told.