RAW FOOTAGE: Fire crews are battling to contain a blaze at the historic Lansdowne Hotel at Broadway.

Hotel on fire at Broadway in Sydney

POLICE say a fire that gutted two rooms at Sydney's iconic Lansdowne Hotel this morning is being treated as suspicious.

Thick black smoke was seen billowing from the hotel's third floor about 7.45am. About six fire trucks from five surrounding stations arrived on scene to extinguish the blaze.

NSW Fire and Rescue Superintendent Tom Cooper said the fire started on the balcony, but the cause is unknown.

He said firefighters reached the blaze through the fire escape, and searched every room in the building but found no bodies.

About four of the estimated 12 residents living in the budget apartments were home at the time, but were not injured.

Resident Sabrina Valice said she was the first to see the fire about 7.45am on the balcony shared by five apartments.

She alleges a small piece of cardboard had been deliberately set alight.

She said the fire was initially small but when she returned with water to extinguish the flames, the fire had spread to outdoor furniture.

Ms Valice said she threw water on the fire and notified the other residents.

"We got the fire extinguisher but by that time the fire was at my window," she said.

Lansdowne Hotel manager and resident Michelle Gonzalez said while her room was unaffected, she would have to find temporary accommodation for the residents.

The cause of the fire is being investigated.

Do you know more? Email us at news@dailytelegraph.com.au