No injuries or deaths were reported at the Eastgate Backpackers' Hostel, The Scotsman reported. Fire officials said 51 people were staying at the hostel and three staff members were on the premises at the time.
The blaze was reported shortly after 5 a.m. Rene Carrie from Bavaria in Germany said she was lucky because her bag was packed and she was able to grab it on her way out.
"I was asleep when I woke up with a fire alarm," she said. "At first I thought it was a bad joke. Then I saw the fire and it was not a joke, it was real. Of course, I am lucky to be alive."
Nigel Stafford of the Red Cross said the Highland Council opened an emergency shelter for the hostel guests, most of them in their late teens and 20s and from outside Britain. He said clothing and other items were also being provided until fire officials can determine whether their belongings can be salvaged.
"They are tired, disorientated but seem to be in reasonable spirits," he said.
The fire sent smoke over the center of Inverness. The cause was being investigated Wednesday but Chief Inspector Graeme Murdoch, the police area commander, said there were no signs the blaze was deliberately set.