Officials with Moxy Williamsburg said they had a quick and orderly evacuation of the hotel and no injuries were reported to guests or staff.
The hotel's outdoor dining space, part of the Bar Bedford restaurant, went up in flames at around 2:15 a.m.
Fire tore through tent covering the outdoor area and the entire dining space, sending up heavy flames and smoke.
Firefighters battled through thick smoke to put out the fire.
The hotel said the FDNY told them that the cause was an electrical fire that started in the garden.
All guests were able to return to the hotel within two hours. They closed their restaurant, Mesiba, for the day out of caution but the hotel was otherwise fully operational.
Residents of a nearby apartment building, alerted by the smoke, self-evacuated onto the street.
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