WATCH:Durban's landmark Blue Waters Hotel 'burning'

Thick black smoke was seen rising out of the landmark Blue Waters Hotel on Durban's Marine Parade early on Wednesday.

Martinus Baumbach was sitting on the balcony of Durban's landmark Blue Waters Hotel when he heard the fire siren go off. He quickly gathered his belongings.

Baumbach was among guests and staff who had to be evacuated on Wednesday morning as thick black smoke billowed from the 262-room beachfront hotel on Marine Parade.

"I looked over the balcony and saw staff members walking out the hotel. I woke my partner‚ grabbed our travel documents and ID and cellphones and made our way out the building. I did not see any smoke until we got out the building‚" he told TMG Digital.

According to a hotel employee‚ who requested not to be named‚ a transformer near the basement exploded at about 6.30am.

Staff immediately activated the fire drill and guests were led from the building. Two people were treated for smoke inhalation.

A resident‚ Penelope Larkin‚ who lives behind the hotel at Kirsten Grove‚ said she was drinking tea when her friend went on to the balcony at about 6.45am and saw smoke come from the hotel.

"I saw a huge cloud of black smoke‚" said Larkin.

The fire was extinguished at about 8.30am.