A pilot has died after their helicopter crashed into the roof of a hotel in the northern Queensland city of Cairns.

The aircraft hit the DoubleTree by Hilton hotel at around 01:50 am local time on Monday (16:50B Sunday), sparking a fire and forcing the evacuation of hundreds of guests.

Authorities say the only occupant of the helicopter died at the scene, and two hotel guests - a man in his 80s and a woman in her 70s – were taken to hospital in stable condition.

Queensland Police and the aviation safety watchdog are investigating the circumstances of the crash, with the company that charters the helicopter saying it was on an "unauthorised" flight.

Amanda Kay, who was staying in the hotel on the main esplanade in Cairns, described seeing a helicopter flying "extra low", without lights in rainy weather.

"[It] has turned round and hit the building," she said, adding that the aircraft "blew up".

Another bystander said she saw the helicopter fly past the hotel twice in the moments before the collision.

"Boy that was going fast, that helicopter. Unbelievable," a woman said, in a video showing the fiery aftermath of the crash.

"It was just going out of control, that thing was."

Two of the helicopter's rotor blades came off on impact, landing on the esplanade and in the hotel pool, according to Queensland Ambulance Service (QAS).

"There’s been reports it sounded like a bomb, and [that after] seeing smoke and fire from that, a lot of the occupants of the hotel were very unsure about the situation," spokeswoman Caitlin Dennings told media.

Another tourist staying at the hotel, Alastair Salmon, described it to the ABC as "a colossal ear-deafening bang".

Mr Salmon, from London, was among about 400 people who were evacuated from the hotel.

He described seeing the helicopter's rotor blade on the ground nearby, and mistaking it for a lamppost.

"Then we looked up there and you could see this massive hole in the window of the building," he told the ABC.

The Australian Transport Safety Bureau said it is sending investigators to the scene.

In a statement, Nautilus Aviation said it would work closely with all authorities in Queensland as they examined the "unauthorised use of one of our helicopters in the early hours of this morning".

Streets around the hotel have been cordoned off and an emergency situation was declared by police.

Located in northern Queensland, the city of Cairns is a popular tourist destination due to its proximity to the Great Barrier Reef.