About 30 percent of the three-story structure collapsed around 3 a.m. Monday, Lake County Fire Rescue Battalion Chief Tony Cuellar said. The villa at the Summer Bay Resort had already been evacuated and no injuries were reported.
Cuellar said authorities were also concerned about another section of the villa, which was sinking.
The sinkhole, which is in the middle of the villa, is about 40 to 50 feet in diameter, Cuellar said. He said authorities think it was getting deeper but couldn't tell early Monday if it was growing outward.
The villa houses 24 units and about 20 people were staying in it at the time, Cuellar said.
Authorities were called to the scene, about 10 miles west of Disney World, late Sunday where they found that the building was making popping sounds and windows were breaking.
A nearby villa was also evacuated as a precaution, Cuellar said.
Krystal French, from Lacy Township, New Jersey, was at the hotel with her fiance and 10-month-old baby. She spoke via phone with Eyewitness News Monday morning.
"There was a lot of popping and cracking," she said. "We were locked in our room. We called the front desk to come unlock our room. They never came...my fiance had to break open the window with a chair, and the floors were buckling and there were cracks in the ceiling."
French said she and her party arrived at the hotel around 4 p.m. Sunday and were planning on staying for a week. Now, she says, she doesn't know what they are going to do. The hotel put them up in a different room across the street for the time being.
"I was holding my baby for dear life, I thought I was going to be crumbled and crushed," she said. "We don't know what's going on. They didn't even have bottled water for us...I have nothing, I don't even have ID, cell phone, cash, credit card, nothing. I just ran."
(The Associated Press contributed to this report.)