Steve Lumley said a small fire broke out in the kitchen of the hotel, which is known as The Stump, shortly before midnight.

"We've very thankful to those guys - they're magic, they're lifesavers," Mr Lumley said.

He said no assets had been lost in the blaze, which was quickly extinguished by firefighters.

However, the hotel bar and kitchen are closed while staff clean up inside.

"There's some minor damage but it could have been a lot worse," Mr Lumley said.

"We'll be very close to having the bar back open tomorrow but the kitchen will probably be closed for the next day and a half to two days."

Warrnambool Fire Brigade senior station officer David Black said crews responded to a call for assistance at the hotel shortly before midnight on Sunday night.

He said Warrnambool officers and Port Fairy CFA officers worked together to extinguish the blaze.

"It was a small fire in the kitchen area that was extinguished in a matter of minutes," Mr Black said.

"Crew members assisted the owners to remove smoke from the building using our ventilation fans."

Have you signed up to The Standard's daily newsletter and breaking news emails? You can register below and make sure you are up to date with everything that's happening in the south-west.