Up to 400 were evacuated from the DoubleTree by Hilton on Cairns Esplanade after the crash, which set the top of the building alight, shortly before 2am today, police said.
Two of the helicopter's rotor blades came off and landed on the esplanade and in the hotel pool. There were no injuries on the ground.
Charter company Nautilus Aviation said the use of the helicopter was "unauthorised".
"Nautilus Aviation are working closely with Queensland Police, the Australian Transport Safety Bureau and other authorities as they investigate the unauthorised use of one of our helicopters in the early hours of this morning.
"As we continue to fully support the ongoing investigation, we will not be making further comments at this time."
Two hotel guests — a man in his 80s and a woman in her 70s — were taken to Cairns Hospital in a stable condition and have since been discharged.
Queensland Police Service Acting Chief Superintendent Shane Holmes said investigations with the Australian Transport Safety Bureau (ATSB) were continuing, and a report would be prepared for the coroner.
"There is no further threat to the community, and we believe this is an isolated incident," he said.
He was unable to comment on the speed of the helicopter, or whether the pilot had a license.
"The aircraft was moved from a general aviation hangar early this morning, and it was an unauthorised flight," he said.
He confirmed it was a small helicopter, which seats up to four .
The Australian Transport Safety Bureau's chief commissioner Angus Mitchell said they were still trying to confirm the pilot's identity.
"Once we do have an identity of the person involved then we'll start to looking a little bit more closely on all the things that may have contributed to what unfolded last night, but it's only very early days," he said.
"We know that visibility was down at the time. We want to understand what the helicopter was equipped with, but also potentially what the helicopter was doing at the time and any nature of the flight, and that's going to be the focus of our investigation."
He said they were still unsure of the helicopter's flight plan.
"We understand it wasn't an extensive time in the air, but exactly where that helicopter went, is something that we will look to ascertain," he said.
"The sequence of events ... when a helicopter crashes into a building, there's a lot of forces involved.
"You've also got the post impact fire, which was extensive … as well as the firefighting effort. So it is quite a job for my team to now decipher from what's left in the wreckage there to try and understand exactly what was in place at the time."
Veronica Knight was outside on the phone to a friend in the US when she saw the helicopter flying past like planes "in war movies" and tried to film it.
"It meant . I got the idea that it was the sort of thing that could crash, it was going so fast," she said.
Ms Knight said the helicopter disappeared for 10 minutes before she saw it flying back to shore.
It was too dark to see the crash, but she heard it and filmed the flames on the roof from just metres away.
"I was pretty worried because you could see parts of the whole apartments — I was wondering, 'how did it land'?"
Hotel guest Alastair Salmon woke up to "a colossal ear-deafening bang". He and roommate Harry Holberton were on the third floor.
Mr Holberton said the crash felt like a bomb going off, with flames "rising up the side of the building".
"Suddenly all the alarms start going off and then [] start evacuating with police yelling 'get out, get out, get out'."
Mr Salmon, who had travelled from London, said he first mistook the helicopter's rotor blade for a lamppost.
"Then we looked up there and you could see this massive hole in the window of the building," he said.
The pair were let into the hotel to get their belongings.
"All over the hotel there was debris, parts of a windscreen," Mr Holberton said.
Mr Salmon said he could see "small fragments of what looked like a helicopter" in the hotel's courtyard.
Wayne Leonard, who lives 100 metres from the hotel, said he woke up to a bang.
"It was very loud — I thought it might have been a tower on top of the building exploding, it was that sort of a sound," he said.
"When I went and looked out the window I could see huge big flames on the top of the building."
Queensland Premier Steven Miles described it as a "terrifying event".
"I'm advised our emergency services put in place all appropriate processes to keep everybody safe," he said.
"The good news is that the police commissioner advises me they have no reason to believe that there's an ongoing threat to community safety."
Head of aviation at CQ University, Professor Doug Drury, said for a crash to happen in the CBD at that hour was "very, very unusual".
A mechanical failure was "possible", but landing it on the top of a hotel was the "last thing" you would do, he said.
"The esplanade itself has lots of areas that can be considered a safer landing zone with the helipad on the point there, as well as parkland," he said.
"If the aircraft was trying to make it back to land, and the aircraft sounded sick ... it still should not have landed on top of the building."
Professor Drury said the CBD was a no-fly zone for all low-flying aircraft, except for the authorised rescue chopper.
"We don't see these major occurrences on a regular basis, if ever," he said.
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Asked if it would be possible to fly a helicopter without experience, ATSB chief commissioner Angus Mitchell says it'd be very hard.
"It's certainly very difficult to fly a helicopter if you're not a pilot or you're not experienced.
"We don't know until the identity of the individual is confirmed, we don't know the experience level, but it is certainly a very difficult thing to do if you haven't got experience of flying a helicopter."
What time the helicopter took off and the speed it flew at is not yet known, he says.
That ends our live coverage for today, thanks for following.
We've heard from the helicopter owner that it was flown without authority.
Asked what an unauthorised flight is, chief commissioner Angus Mitchell says:
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