The Semiramis Intercontinental in central Cairo came under attack overnight when masked assailants forced their way inside, ransacked and looted the lobby even as anti government protesters were clashing with security forces outside.
The hotel sent panic SOS calls on its Twitter account, seeking help, after which local civilians and groups of protesters came to its aid and held the trouble makers.
Reports in the local Al Ahram and Egyptian Independent said the incident prompted many visitors to check out of the hotel.
Prime Minister Qandil visited the Semiramis after the attack.
"EMERGENCY! WE ARE UNDER ATTACK! SEVERAL THUGS HAVE ENTERED THE SEMIRAMIS! SEND HELP," hotel employees pleaded via the official hotel account on Twitter.
"SOS If anyone knows anyone in #Military #Police #Government, please send help! Thugs in Lobby," they said.
Local civilians and batches of anti-government protesters came to the aid of the panic-stricken staff and guests and held the assailants before handing them over to police.
The inside of the hotel reception was left gutted, broken glass and rocks were strewn across the floor and outside the main gates, said a report in Al Ahram.
An executive at the hotel was quoted as telling reporters that more than 45 clients insisted on leaving despite the hotel's offer to relocate them to higher floors.
He said guests at other neighbouring hotels also followed suit.
He also demanded compensation from the Ministry of Tourism for the losses sustained by hotels over the past few days, and warned that tourists would take home negative reports about the country.
Ever since Egypt observed the second anniversary of its uprising on January 25, clashes have been witnessed in Cairo and several other provinces. Unrest intensified after a court in Port Said sentenced 21 football fans to death for their role in a post match violence.
The demonstrations have turned into protests against President Mohamed Mursi and the ruling regime.