Fourteen people were in the hotel in the winemaking town of Kroev when one storey of the building collapsed late on Tuesday.
Five were able to get out of the building unhurt because they were not in the part that collapsed, police said, but others were trapped.
An operation is ongoing to try to save them.
But reaching them is proving to be difficult because the collapse of one storey left two ceilings lying on top of each other, according to Joerg Teusch, fire and disaster protection inspector for the Bernkastel-Wittlich district.
He said at a news conference that two people had died.
The cause of the structural collapse had not been determined, he said.
Regional public broadcaster SWR said witnesses reported hearing a bang and seeing a large cloud of dust at the time of the collapse.
"There was no option (to use) stairs, house entrances, doors or windows, because they were simply no longer there," Teusch said.
"We have to proceed with caution because the entire building structure is like a house of cards.
"If we pull on the wrong card, this building is sure to collapse."
About 250 emergency workers, including drone specialists, and rescue dogs were at the scene.
Kroev is on a picturesque section of the river Moselle near the larger resort town of Traben-Trarbach, and has about 2200 inhabitants.
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