A floor in the hotel, located in the Moselle town of Kröv in Rhineland-Palatinate, collapsed for unknown reasons around 11 pm on Tuesday, police said in a statement.
Of the 14 people inside at the time, five managed to get out.
LATEST UPDATE: What we know so far about fatal hotel collapse in western Germany
Of the seven who were trapped "some were seriously injured", with firefighters originally struggling to establish contact with some of them, police said. On Wednesday morning, rescue services were trying to pull those trapped to safety - bringing in structural engineers to help.
As of 5 pm on Wednesday, six were reported to have been rescued, leaving one still trapped. Emergency services managed to rescue the last person on Wednesday evening.
Around 250 helpers, including from the fire and rescue service and the Federal Agency for Technical Relief (THW), are on site - including special forces and a rescue dog squadron.
Around 31 residents in nearby homes were evacuated.
Pictures taken at the scene of the incident during the night show that parts of the multi-storey timber-framed building had collapsed, with concrete rubble on the ground.
"Due to the extent of the damage, this is an extremely demanding operation, as the building can only be entered by the emergency services with the utmost caution," police said.
It was initially unclear how parts of the building suddenly collapsed. According to police, residents called the emergency services late on Tuesday. Local media reported that eyewitnesses heard a bang and a large cloud of dust.
The Moselle river region is a popular tourist destination in Germany, known for its vineyards and castles.Â
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