Canobolas RFS District Officer, Lachlan Allan, said RFS crews were notified of a structure fire at the hotel at approximately 10.44am on Monday.

"A crew from Woodstock Brigade were notified locally by residents and responded straight away," Mr Allan said.

"When they got onsite, they observed smoke issuing from the second storey of the hotel.

"They straight away got to work with hose lines to try and fight the fire externally as they didn't have breathing apparatus to go internally, that was the safest option until Fire and Rescue showed up from Cowra.

"They then got to work with Fire and Rescue and were able to contain the fire to three rooms within the second story of the hotel and they've been on site ever since."

Kangaroo Flat RFS, as well as Cowra Police also attended the scene.

Mr Allan said early indications suggest an electrical fault sparked the blaze, which has caused fire, smoke and water damage to at least three rooms on the second storey of the establishment.

"At the moment, investigation keeps going but it's been deemed as a suspected electrical fault in one of the rooms, resulting in the fire igniting," he said.

"No suspicious circumstances at this stage, although further investigation will most likely follow on.

"No occupants were in the building at the time."