Ottawa police are on the hunt for an arsonist after an investigation into a fire at a downtown hotel led them to an incendiary device and gas can.

The second floor of the Radisson hotel at 402 Queen St. was engulfed in smoke when fire crews arrived shortly after 8 a.m. Thursday.

The fire caused about $1 million in damages and sent two people to hospital with serious burns. Some guests broke windows to get out of the building.

"It's the first new year I've ever had like this," said Karen Holton, a British tourist who was forced to evacuate the hotel in her bare feet.

Thirty people were treated for smoke inhalation, and two remain in hospital in serious condition.  Paramedics say a 30-year-old woman suffered second-degree burns to 15 per cent of her body. A 26-year-old man suffered both first- and second-degree burns.

"When it involves the face and throat, that can be very serious, we won't know for at least another week or so how they well come out of that," said J.P. Trottier of the Ottawa Paramedic Service. 

Three hockey teams involved in Ottawa's Bell Capital Cup tournament were staying at the hotel at the time of the blaze, according to tournament spokesperson Aaron Robinson.

Parents and children from two Chinese teams and the parents of some German team members were evacuated safely and suffered no injuries, he told on Thursday.

Members of one of the Chinese teams even played in a semi-final game after they were evacuated on Thursday morning -- although the start time of the game was pushed back by one hour.

Restoration specialists are assessing the damage. Arrangements have been made for affected guests to stay elsewhere.

"(It's) a serious situation when anyone would light a fire in a public place that could put many people's lives at risk," said Const. J.P. Vincelette of the Ottawa police.

With a report from CTV Ottawa's Vanessa Lee