The fire service said it responded to a fire within the property’s accommodation block, which spread to the block’s entire roof space.
The fire was extinguished at around 05:30, with crews continuing to monitor the scene before leaving at 09:32.
“Not sure how we come back from this at all let alone in the near term future but we will strive to come back stronger,” the owners said in a Facebook post.
Sian Nichol, who visits Rhosilli regularly, said she could not believe the destruction following the fire.
“We used to come every summer. It’s absolutely shocking to see it like this,” she said.
Beverly and Gareth Parfitt, from Weston-super-Mare, were visiting friends in Rhosilli and said they were “devastated”.
“We’ve been coming here a few years, spent many a fantastic new year here, so to see it like this, I felt quite emotional when we turned the corner,” said Beverly.
“The vision I had today was to sit outside there with a nice meal and lager together,” Gareth added.