Emergency services have been at the Londesborough Hotel since around 1.30pm after a major fire broke out.
Six fire engines and two aerial platforms are at the scene in West Street. Humberside Fire and Rescue Service are being helped by Red Watch from Scarborough
There are around 30 firefighters at the scene as well as several police officers. They have asked the public to cooperate with their instructions and keep behind the cordon.
Gas and electricity supplies have been turned off for safety, surrounding roads are cordoned off and will be for some hours. The building is said to be unstable.
People living in and around West Street have been told to keep doors and windows closed. "Smoke in the area may cause discomfort to some," the fire brigade Tweeted.
Neighbouring businesses have been evacuated. People working nearby have spoken about how they raised the alarm.
People have said they have heard the floors collapse and the roof fall in. So far, there are no reports of any injuries.