100+ guests were safely evacuated, but with winds gusting from fifty to eighty miles per hour, the fire spread quickly and burnt the hotel to the ground within three hours. Flying debris even set fire to Stearns Wharf and to the tall palms that line the boulevard along West Beach. Only few chimneys were left of what had been one of the finest hotels on the West Coast.
Faulty wiring was found to be the cause, although many historians suspect it was arson caused. Several attempts were purportedly made to burn down the hotel which had been heavily insured and was steadily losing money, and the fire department reportedly believed that all the fires they extinguished has been deliberately set. Although Arson was suspected, it was never confirmed.