Pilgrim Coffee, a popular Hobart cafe and bar, has been gutted by a short but fierce fire overnight.

Loading

Staff at the cafe's adjoining Standard Drinks bar in Liverpool had just closed for the night at 10:00pm when staff noticed smoke and then flames and called the fire brigade.

The fire was quickly brought under control but not before apparently gutting the interior of the cafe.

Visitors at a budget hotel upstairs from the cafe were evacuated before walking across the road in their pyjamas to be checked at the Royal Hobart Hospital.

Isobel Thomson, who works at the Royal Hobart Hospital, witnessed the fire as she finished her shift.

"The smell of smoke was very strong and I could smell it even in the halls of the hospital," she said.

"There was just a lot of commotion, a lot of patients standing around outside looking at the fire and lots of police officers and firefighters attending the scene."

Firefighters said the fire was not suspicious and caused by a mechanical or electrical fault in an under-bench fridge.

Smoke billows out of Pilgrim Coffee. ( Facebook: Isobel Thomson )

Award-winning barista and Pilgrim Coffee owner Will Priestly was devastated when he arrived at the scene, and said he was worried about the future of his staff.

"I have 15 employees who rely on the cafe for their livelihoods," he said.

"I opened the cafe just one day short of seven years ago."

A staff member of the adjoining bar said it appeared the fire started in the ceiling.

In 2010,Mr Priestly, who is also a co-owner of The Standard and Aloft restaurants, won the Australian Latte Art Championship and came second in the world championship in London.

Two years later he won the inaugural Tasmanian Barista Champions and went on to compete in the Australasian titles.

Pilgrim has been rated number one for coffee in Hobart by TripAdvisor.

In early 2017, Mr Priestly suffered a cardiac arrest while playing hockey and had two open-heart surgeries.

Unknown to him, he had a blocked artery in his heart that had gone undetected when he consulted a cardiologist three years earlier after experiencing chest pains.

Customers have expressed dismay over the loss of the cafe. ( ABC News: Scott Ross )

'Sad day for Hobart coffee lovers'

Pilgrim Coffee customers expressed their dismay at the news.

"Sad day for the coffee lovers of Hobart," Ray Yaxley posted on Facebook.

"Such terrible news Will, feeling heartbroken for you & your staff," wrote Lisa Souter.

"NOO! That's awful news! And yes, the patients & staff at the hospital will be lost without Pilgrims!" wrote Ria Gilham.

"Such bad news for a hard working crew!" posted Sean Delaney.