Officers on patrol in the town centre spotted a large amount of smoke pouring out of the front and rear of the hotel.
Firefighters were alerted to the scene where they were able to control and distinguish the large fire.
They conducted an investigation which pointed to suspected arson.
As part of the ongoing police investigation, we are appealing people to come forward about any suspicious activity at the location and particularly on the evening of Tuesday 7 March.
If you can help, please email firstname.lastname@example.org or call 101, select option 2, and ask for Ellie Paul.
If you wish to remain anonymous, you can pass information to Crimestoppers on 0800 555 111.
Please quote the North Yorkshire Police reference number 12230042171 when providing details.