A Rotorua woman was driving down Fenton St from the south end towards the city when she saw the thick black smoke billowing from the motel, which is next to Oppies Fish and Chips and Chinese Takeaway shop.
"Police were starting to block off the road and we had to turn left down Malfroy Rd. I looked back and just saw thick black clouds. It looked bad."
She said it was worrying considering there had only recently been a fire at the Four Canoes Hotel, a motel contracted by the Government and used as transitional housing.
A staff member at Oppies said police were blocking off parts of Fenton St and there were fire trucks and ambulances on the scene.
"There's a big fire … there [is] quite a lot of people around the scene. There was a lot of smoke earlier [and] the smoke was covering a lot of the street and you couldn't see much."
Oppies had to block off their front entrance, but people could still access the back entrance.
A reporter at the scene said police had blocked the road and were diverting people away from the scene.
They had blocked Fenton St about 400m from the fire and were diverting people through Central Mall carpark. Fenton St heading south has since been opened.
She said the plume of smoke was huge.
Rotovegas Motel owner Bryce Smart, whose motel is also on Fenton St and under a Government contract for social housing, said it was a shame to hear the Golden Glow Motel could be extensively damaged as everyone needed a place to sleep.