The alert was raised around 06:00 local time (05:00 GMT) and about 60 firefighters and 15 fire engines were sent to the scene.
No injuries are currently reported and a fire service spokesman said the priority was to “stop the fire spreading”.
Fire captain Yvon Bot said the fire was unusually difficult to access and control.
Paris police tweeted that there was a “major fire”, and advised motorists to avoid the Place Vendome area.
The area was blocked off at the height of the morning rush hour, while firefighters on cranes sprayed the flames.
The hotel is currently closed for renovations and there are no guests staying there.
It was due to re-open later this year after a three-year closure for renovations.
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