The blast, which occurred at 1:30 a.m., brought down the three-story building, scattering fragments of glass and metal objects in a radius of at least 80 meters (262 feet).
Video footage from the scene shown on state-run broadcaster ERT on Thursday morning showed smoke billowing from a pile of rubble.
Firefighters from Kastoria have been dispatched to the scene while police officers have cordoned off the area and blocked traffic on the main highway leading to the city, which passes near the hotel.
Iconic hotel next to the lake
The regional directorate of Western Macedonia’s Fire Service and Kastoria Police said the owner of the hotel told them that the business had been closed for the past year and that there was no one inside the building.
The fire service and local police did not provide any clues as to the cause of the blast but said they were investigating the incident.
The 3-star Tsamis Hotel is located at the 4th km of the Kastoria-Athens -Thessaloniki national highway, next to the lake of Kastoria.
It was built in the early 1970s and was completely renovated in 2010, offering 75 rooms and five suites, according to its website.
The Deputy Regional Governor of Kastoria, Dimitris Savvopoulos, told APE-MPE, that the hotel was not only a reference point for the visitors of the city but also an iconic place for the people of Kastoria as all kinds of social or cultural events took place in its public spaces for decades.