At least 200 guests were evacuated when fire broke out at Leopard Beach Resort in Diani on Sunday night.
The fire spread to two cottages, destroying property valued at millions of shillings.
Devolution Cabinet Secretary Eugene Wamalwa was among the guests at the resort.
Kwale County Police chief Tom Odero said the guests were taken to nearby hotels. He added that the blaze started around 10pm.
Authorities suspect the inferno was started by sparks from fireworks during a wedding, he said.
"While we admit there were fireworks, investigations into the incident have been launched," Mr Odero said, adding that police officers were collecting samples from the scene.
He said a help desk has been established at the hotel.
"It is a tragic incident but there were no injuries," the police boss said, adding that the fire spread fast due to strong winds.
The neighbouring Warandale and The Governor cottages were destroyed by the blaze.
Firefighters from the county government, security companies and the navy brought the inferno under control after several hours.
The fate of the hotel workers remains unknown.
The Governor cottages caretaker Karisa Katana Ngala said three houses and a store were destroyed.
"We heard an explosion at the hotel followed by a fire that quickly spread to our premises," he said, adding that he could not estimate the losses.
Mr Ngala said workers and the management are waiting for communication from the owner of the cottage, probably today.
Mr Wamalwa told the Nation he was evacuated from Leopard Beach Hotel immediately the fire began.
"I was there. We were alerted of the blaze in good time. The management transferred us to other hotels and mobilised firefighters professionally," the Cabinet Secretary said by phone.
The minister thanked the hotel management, security personnel and Kwale Governor Salim Mvurya "for moving with speed to ensure the fire was brought under control".
"We were alerted in good time and guided out. We thank God no one was injured," he said.
In 2018, Leopard Beach was feted as Africa's leading family resort for the second year running.
It was also named Africa's leading resort and the continent's top spa resort for the third year in a row.
Leopard Beach general manager Kioko Musyoki said the fire affected 120 rooms. All the guests were safely relocated, he said.
Mr Musyoki said the CS "was at the hotel in his private capacity".
There were many other high profile foreign and local visitors, who joined employees in mobilising emergency support.
Mr Musyoki said: "The adjacent villas were slightly affected by the smoke and heat, but the fire was finally contained." The losses were huge, he added.
He thanked the neighbouring tourist establishments, police, emergency services and the Diami community for their support.
Mr Musyoki said investigations have been launched into the cause of the fire.
Additional reporting by Lucas Barasa and Kitavi Mutua